By Ryan Chaulk
Do you ever wonder why it can be so hard to find entry-level job offerings when beginning your career search? As us students are beginning the search, it may seem like there are limited opportunities posted on the web. Today, companies are hiring significantly less employees than ever before and creating less of these positions. Many large corporations are beginning to outsource their jobs to employees not on their payroll. They are handing this large chunk of work over to contractors who work for staffing agencies tasked with finding employees for a variety of jobs. With less people being hired into the workforce, finding a job and keeping a job may not be promised. This increasing lack of job security for millions of workers appears to be continuing on its current trajectory. Younger employees may experience even less job security, as many students here at Bryant may be fearful of. These entry level positions may diminish quickly if the company believes it can benefit from outsourcing them. Lower level employees may end up being laid off if the company doesn’t find use for them. Outsourcing will also influence how many of these jobs are available on the market. For these positions, a company may feel it is unnecessary to pay a full-time employee for a simple task a contractor can handle.
The main reason so many companies are beginning to outsource their jobs revolves around money. It is much cheaper to hire these contractors who don’t need to be added into the payroll. These workers will make less, as well as not receive the benefits full-time employees of the company get to enjoy. This encourages income inequality in the workforce as two employees doing the same job can receive drastically different pay. In the past, companies looked to outsourcing for manufacturing and call-centers in other countries because it was a fraction of the cost. Employees can be paid much cheaper, and for manufacturing companies, resources can be in an abundance. Today, almost any job in any industry could potentially be given to an outside worker.
Large companies can be seen outsourcing the majority of their non-customer facing jobs. According to the Wall Street Journal Article, The End of Employees, Virgin America statistically has the best revenue per employee rate by a long shot. This is because they outsource simpler jobs like baggage delivery, reservations, and heavy maintenance, allowing them to keep their core group of employees relatively small. Companies want to keep their staff lean because it allows for more flexibility and adaptability. As one can imagine, changes in an organization are achieved easier with 500 employees rather than 1,000. Alphabet, Inc., the parent to Google, has approximately equal employees to outsourced jobs. They outsource jobs like testing, reviewing products, managing campaigns and projects, research, and much more. These are all jobs that recent college graduates are pursuing and increasingly failing to find. This popularity has gone as far as some companies employing two outsourced workers for every one actual employee. Outsourcing can also damper the ability to grow within a company. It is more difficult than ever to be promoted as these types of jobs are often given to contractors, leaving little room for employees to rise.
As the popularity increases among outsourcing and hiring contractors, many companies are thinking about these methods before considering employees. The End of Employees states CEO’s are increasingly asking “‘Can I automate it? If not, can I outsource it? If not, can I give it to an independent contractor or freelancer?’” They are looking to hire their own employees as an absolute last resort, giving them less to actually manage. On average, companies spend $1 trillion a year on outside agencies to hire and manage workers, as well as perform jobs for them. With continuous improvement in technology as well, many companies are choosing computers and machines over physical employees.
As this trend of using contractors continues to increase, college graduates will continue to have potentially lower job security. When looking for a full-time position after graduation, keep in mind that a lot of larger corporations will attempt to outsource. It is extremely important to ensure that the company you are going to work for puts an emphasis on job security and growth throughout your career. The ability to be promoted and grow into a stronger employee should be a top priority for both you and the company. With this in mind, finding a company that actually needs your skill set will be much easier.