Why contractors are the future and the downsides of hiring a mercenary workforce

By David Hunt, PE

A friend of mine from when I worked at Ford Motor Company in Sandusky, Ohio and I talk about once a week. He, I, and a few others from the circle of friends I developed there stay in touch. A while ago, he and I simultaneously had an epiphany while chatting: this was the last place where we developed real friendships at work.

Do I stay in touch with a few people from subsequent employers? Yes, but they are few and far between, and – with one notable exception of a vendor representative – they are nowhere as close as these friendships.

I am reminded of my own youth, where my parents would often host dinner parties whose attendees were – almost exclusively – colleagues from my father’s or mother’s place of employment. People who attended celebrations were mostly people whom my parents or I had come to know through their workplaces. Their children were my friends. Looking back, I’d have to opine that the overwhelming majority of persons in my parents’ social circle were people from work.

In the last couple of decades, the workplace has become increasingly mercenary and the average tenure in a company has been shrinking (the average now, IIRC, is three years). In a recent article by Gary Swart on LinkedIn, The Future of Work and the follow-up piece The Future of Work Part II: 10 Tips For Professionals, he addresses the increased churn rate of the workplace today. Citing the fact that most people are now shifting jobs every few years, he claims this is driven by employees wanting to be freer and more mobile, among other reasons. Another essay, Half Of Us May Soon Be Freelancers: 6 Compelling Reasons Why, discusses the benefits of this trend, as does Why Everybody’s Going Freelance.

I would argue that this is reversing cause and effect. Since the 1980’s, companies have become freer and freer to downsize, fire, and otherwise shuffle people around. Driven in part by increased globalization, but also the spate of MBAs pursuing an extra fraction-of-a-percent profit margin, the idea of the old employment contract has been undermined, with employers – not employees – being the driving force. The disposable nature of people these days is forcing people to take a contractor’s mentality. More than a few networking contacts of mine foresaw this and became contractors ahead of the curve!

While I might be projecting here, my understanding of the ultimate end state of this trend is of a company with a skeletal core of people, reaching out to freelancers and contractors to form teams that swirl around a project or two like piranhas swarming a piece of juicy prey, then dispersing to the next location (i.e., company) where more prey is available.

The benefits, I do agree, are obvious. Lower head count, less benefits to fund, having specialists on board when a company needs them and not when they are not needed. But there is a price to such ephemeral groups…

Back at Ford Motor Company, one of the first projects I worked on was the launch of the 1996 Ford/Taurus headlight assembly line. Of the several projects I did on this line, one was looking at the allowable leak rate specification which was forcing the rejection of a substantial number of headlights. Where did this specification come from? Nobody at the plant knew. It was what it was, handed down from the hazy mists of long ago.

I quizzed our design group. The same story: nobody knew. Finally I found a grizzled veteran of the lighting design group. The leak rate specification was from sealed beam headlights from decades ago, passed down from lighting generation to lighting generation.

But our lights weren’t sealed anymore. Instead, they incorporated a filtered vent to allow the light to breathe – a totally different design philosophy. Given this insight we designed a series of experiments and widened the allowable leak rate substantially, reducing reject and scrap rates substantially without compromising field performance. If I had not had this insight of the origin of the specification, arguing for the testing I did would have been much more difficult. More importantly, without this insight and the subsequent testing, a step-change improvement in first-time-through and reduced scrap would not have been achieved.

Another project, while in climate control, involved cost-reducing a heat shield. Again, I had to dig and dig and dig to find out why the heat shield was there (beyond the obvious, first-order answer of protecting the plastic case underneath). And again, it was only a chance conversation with a longtime veteran in the design group that I found out why the heat shield was used: this heavy formed-fiberglass piece served solely as a carrier for the aluminum foil to reflect away the engine heat.

Armed with the actual function of the piece, I developed and successfully tested a concept that – had I not been laid off with almost 2,000 other people – I would have pushed through with the potential to save an estimated $750K per year.

What did these two things have in common? The value and knowledge of how things were developed, as contained in the memories of people who had longevity at the company – the company’s “tribal knowledge”.

More recently at Cabot Corporation, we had a retiree come in and work a couple of days a week. He had extensive and invaluable experience in the WHY of our systems. Often understanding why things are the way they are – something only truly available by having access to someone whose long-duration tenure gives them that knowledge – is critical before one starts making changes in more than a trial-and-error mode.

Sell-swords have their uses; many are indeed experts in their area of expertise and can be useful when a company is faced with a specific and extremely thorny problem. But a company consisting mostly of as-needed mercenaries is continually doing two things:

• Employing people who, while working, are worrying about where they’re going next when this gig ends – and having to spend time and mental energy searching for it instead of spending that mental energy on the project (or on other “trivial” things like their families). 
• Scrambling to find pieces of that “tribal knowledge” – the knowledge that vanished when the company dispersed their full-time staff slavering at the cost savings – and having to duplicate effort and rediscover all that information time and again. 

There is, possibly, a better term for this than sell-swords: pirates. Pirate crews swarmed to the leader who promised the most booty. Ultimately loyal only to themselves, they would often disperse the moment things got difficult; if they didn’t it was more from fear or inability to leave than any loyalty or inspiration.

When faced with official navies, usually pirates came out on the worse end. Why? Because formal militaries were organized, learned from experience, and had people who were dedicated and loyal to something more than the promise of, arrrr, treasure.

As companies descend into free-wheeling teams of self-focused, short-timer buccaneers, signing on for quick booty, what will they do when they face organized companies with long-term, loyal, committed employees inspired by something greater than their next paycheck or a fat bonus?

© 2013, David Hunt, PE

David Hunt is a Mechanical Design Engineer in southern New Hampshire looking for his "next opportunity" that allows him to design new products and shepherd them to stable production. His LinkedIn profile is: www.linkedin.com/in/davidhuntmecheng/; he blogs at davidhuntpe.wordpress.com and tweets at @davidhuntpe.