This is shocking because it shows the extent to which outsourcing is no longer a trend, but just a simple, fat reality. Fact. The days of Hershey, PA life-time employment are long-dead. Labor has become so specialized (read: Adam Smith talk) that there is a company willing to take that repetitive process off of your hands, and do it for you. Facilities maintenance, security guards, account payables, customer service, co-op advertising, legal services, almost anything.
The Wall Street Journal headline was provocative, “Some of the World’s Largest Employers No Longer Sell Things, They Rent Workers.” They say “rent” not “augment, or staff” to definitely give a dehumanized, objectified feel to the article (read: people are things). I don’t see it that way, but there are definitely challenges. Lots of implications on education, retirement saving, corporate culture, and business strategy.
Top 5 largest outsourcing companies by headcount.
- Randstad, 658K employees, staffing
- G4S, 570K employees, security
- Compass, 500K, restaurant
- Accenture, 435K, IT, consulting
- ISS AS, 429K, support services
I can personally think of many more outsourcing companies: Sodexo (420K employees), Tata Consulting Services (380K), Aramark (270K), ABM Industries (100K) etc. . .
This is unsurprising. For those who work and consult Fortune 1000, we see outsourced technicians, customer service reps, environmental services, facilities, security people all the time. I would not be surprised is 1/3 of any given IT department is outsourced too.
Of the top 20 global employers in 2017, five are outsourcing and “workforce solutions”
companies, according to an analysis by S&P Global Market Intelligence. . .
Outsourcing companies are vacuuming up the world’s workers as traditional employers are
handing over more of their tasks to non-employees, a shift that has transformed the way
corporations do business and had profound effects on workers’ prospects and pay.
Great, so what?
- Hone your craft. In this VACU world, the safest path is the hardest path. Refine your skills, and deliver so much value that they cannot ignore you
- Get on the core team. Figure out how your company, business delivers value to the client. Be on that team. Don’t be an auxiliary. The firm of the future will have some core (mission-critical, linchpin) people and lots of hired hands.
- Team-up well. Teams are how (interesting, tough, valuable) work gets done.
- Expect less company culture. Company culture matters – completely agree. However, companies will struggle to keep their founder’s mentality alive. If your company is a compilation of outsourced functions, it will feel homogenized and generic.
- Create your own culture. If your company lacks the culture you want, create your own mini-ecosystem. Be the one that people want to work with. Salesforce.com actively encourages people to switch teams, which puts the team leaders in the hot seats. If their team culture stinks, their best engineers will flee to better teams (love the free-market for labor at CRM).
- Expect outsiders. Increasingly, we will work with more people from outside our companies (suppliers, customers, government, investors, consultants). Get used to it.
- Streamline. Think like a process consultant. How can (any) company process be more thoughtful, streamlined, and lean? What outsourcing business could you start?
- Be cynical. Outsourcing gets you to an “okay” state. Repeatable, but not great. If everyone is doing it (outsourcing), then you should expect average results.
- Save, invest. If we are really a part of a gig-economy, that means we need to expect ups/downs and potential slow periods of less work. Wealth is on the balance sheet – so plow your savings into something that gets you a return.
- Keep learning. The mosaic internet browser (thank you Marc Andreessen) came out in 1994, one year after I graduated from college. Clearly, that’s something my undergraduate education did not prepare me for. When you stop learning, you are old.
What other implications come from the fact that OUTSOURCING IS REALITY?