Tech contract workers live in quiet frustration
Skilled laborers fuel Google, but few receive benefits or other opportunities
Every day, tens of thousands of people stream into Google offices wearing red name badges. They eat in Google’s cafeterias, ride its commuter shuttles and work alongside its celebrated geeks. But they can’t access all of the company’s celebrated perks. They aren’t entitled to stock and can’t enter certain offices. Many don’t have health insurance.
Mountain View-based Google parent Alphabet employs hordes of these contract workers. They serve meals and clean offices. They write code, handle sales calls, recruit staff, screen YouTube videos, test self-driving cars and even manage entire teams — a sea of skilled laborers that fuel the $795 billion company but reap few of the benefits and opportunities available to direct employees. Earlier this year, those contractors outnumbered direct employees for the first time in the company’s 20-year history, according to a person who viewed the numbers on an internal company database. It’s unclear if that is still the case. Alphabet reported 89,058 direct employees at the end of the second quarter. The company declined to comment on the number of contract workers.
Some of the most cash-rich public companies rely on a steady influx of contractors. Investors watch employee headcount closely at these tech powerhouses, expecting that they keep posting impressive gains
“They feel so isolated, precarious and like second-class citizens. It’s a microcosm of what’s happening in the economy as a whole.” — Yana Calou, an organizer with advocacy group Coworker.org
by maintaining skinnier workforces than older corporate titans. Hiring contractors keeps the official headcount low and frees up millions of dollars to retain superstars in fields like artificial intelligence.
The result is an invisible workforce, off the company payrolls, that does the grunt work for the Silicon Valley giants with few of the rewards.
Contractors are on the rise at Google as the company spreads into new markets, such as devices and corporate services, which demand a larger salesforce. Conversations with more than 10 former contractors for Google and other Alphabet units paint a portrait of a permanent underclass. Google has a name for them: TVCs, or “temps, vendors and contractors.” They are employed by several outside agencies, including Adecco Group, Cognizant Technology Solutions and Randstad.
Yana Calou, an organizer with advocacy group Coworker.org who speaks with Google employees and contractors, said that both groups are concerned about the workers who aren’t full Google employees. “They feel isolated, precarious and like second-class citizens,” Calou said. “It’s a microcosm of what’s happening in the economy as a whole.”
In an emailed statement, a Google spokeswoman said the company hires TVCs for two primary purposes. One is when the company doesn’t have a particular expertise in-house, such as shuttle bus drivers, quality assurance testers and doctors. Another is for filling temporary positions to cover for parental leave or spikes in work.
Some contract workers
viewed Google as a generous workplace that boosted their careers. Still, despite their ubiquity there, many felt peripheral. Several noted the subtle slights apparent from their arrival. The first thing people eye at work, one former TVC recalled, is the color of someone’s badge. TVCs aren’t trusted with tasks outside their limited purview.
“People look down on you even though you’re doing the same work,” said one contractor who spent two years at Google managing multiple other employees. Said another ex-TVC: “You’re there, but you’re not there.”
Google’s initial flood of contractors came with its first “moonshot.” Dozens of temporary workers were hired, more than a decade ago, to photocopy dog-eared pages for the company’s free digital library, Google Books. Like the company itself, the number of temporary workers has grown wildly.
Like other firms, Google relies on outsourcing operations in Southeast Asia — rows of office workers in India and other countries that label mapping data and handle other relatively simple computing work. But Google also hires highly educated contractors in its backyard. Some TVCs arrive with advanced technical degrees and years of experience, working on niche efforts like renewable energy and sensor design.
The line between TVCs and full-timers is clear. One 2016 TVC employment contract from Zenith Talent, a recruiting agency, states that TVCs “will not be entitled to any compensation, options, stock, insurance or other rights or benefits accorded to employees of Google.” The terms hold even if a court later determines the worker was legally a Google employee. Zenith did not respond to requests for comment.
Several former contractors
noted that Google does offer benefits for contractors that other large companies don’t. TVCs can eat at cafeterias for free and use some company facilities like its bowling alleys and gyms. For many, a TVC position offers a foothold for a permanent role at Google or elsewhere. Some highlights, however, come with an asterisk. To ride Google shuttles, which ferry staff to campus for free, TVCs must pay for each ride. In an emailed statement, a Google spokeswoman said that it charges TVCs less than $2 per ride.
The largest burden for many contractors is health care. All the contractors Bloomberg News spoke with said the contracting agencies, which are responsible for health insurance, offered either inadequate plans or none. One former TVC, who worked for Adecco, said he paid roughly $600 out of pocket a month for coverage to treat diabetes.
Some TVCs are paid well. Contract software designers and other specialists were offered as much as $150 an hour before taxes, above rival giants, according to two people familiar with the plans. Vendors doing less technical work made less; one 2017 hiring contract in Europe, viewed by Bloomberg News, listed an annual salary of $32,767. Google’s sub-contracted janitors, who today number around 400, have been unionized since the year 2000. According to the Service Employees International Union, which represents them, they earn around $26.39 in total hourly compensation, including the cost of benefits as well as their income. In Google’s home county of Santa Clara, a family of four with an income of as much as $94,450 a year is considered by the Department of Housing and Urban Development to be “low income”; total annual compensation for a full-time Google janitor-including
benefits as well as wages- is a bit over half that amount.
Legal issues
Google distances itself from responsibility if contractors encounter problems. In both hiring contracts Bloomberg News viewed, the hiring agency is responsible for handling pay, benefits and any grievances contracted employees may have. However, Google asserts authority on key legal matters. Contractors must agree to assist Google in securing the company’s intellectual property, and if Google is unable to get the worker’s signature, the search giant becomes the worker’s de facto attorney. Contractors waive their rights to participate in class action lawsuits against Google.
“We have allowed businesses to really sever their responsibility for more and more for the people who create value,” said David Weil, dean of The Heller School at Brandeis University and a former Labor Department official under President Barack Obama.
Over the years, Google’s influx of contractors has changed with investment priorities. Google Fiber, its broadband unit, was once a major contractor hub, but has scaled back operations. However, other parts of the company that lean on contract work are ramping up. Google’s device sales and cloud-computing units both use call-center support staff to handle customer issues.
Artificial intelligence projects may do so as well. Duplex, Google’s eerily humansounding calling service, which debuts this summer, will turn to phone operators when the AI can’t carry on the conversation. Some of those operators will be contracted out, executives said recently.
Under Chief Financial Officer Ruth Porat, Alphabet has tightened its once freewheeling
spending. Yet the company hasn’t stopped its appetite for expensive engineers, who can easily fetch $1 million a year or more. That decision necessitates more contractors. Every company division must petition for a budget and staff headcount. Talented engineers are pricey and take bites out of the budget. To compensate, managers will then fill out staff with TVCs, according to José Benitez Cong, a former Google hiring manager who runs the human resources firm Plause. “Companies are scaling faster than ever,” he said. “A company like Google may want to rely on contractors to maintain such growth.”
Hiring
Google’s lengthy hiring process is also factor, Benitez Cong said. Google employees can take several months to recruit, whereas the company can tap TVCs within weeks or even days. They can also be dismissed just as quickly.
Last year, a trio of Adecco employees who worked for Google’s food delivery service filed two lawsuits at the Los Angeles County court against both companies. The contractors claim Adecco withheld wages and did not provide meals and rest periods required under California law. Through their lawyer, Paul Tashnizi, the employees declined to be interviewed. Some of the claims have been forced into arbitration, and the others are on hold in the meantime.
Adecco is a favorite contractor for the tech giant. The Swiss temp agency, which posted $26.73 billion in revenue in 2017, secures staff for Google’s maps, cloud and apps units, as well as for Waymo, Alphabet’s autonomous car unit. For multiple former Adecco hires, however, the company was virtually absent. Several people recalled seeing its staff when they joined Google and again when they left. According to two former Google managers, Adecco takes roughly 20 percent of the pay of Google’s contracted employees. Adecco did not answer questions about those claims, but spokeswoman Waddill said that “we continuously listen to our employees’ needs and work to provide them an outstanding experience,” including when it comes to the company’s “unique benefits packages.”
In recent years, Google has brought some contract positions in-house. Following criticism, in 2014 it announced that some security guards would become direct staff. Most contractors do not work longer than two year stints, according to multiple contract workers who spoke to Bloomberg News, but some serve multiple terms on the hopes of becoming direct employees. Google did not provide data on how many achieve that.
And for many white-collar TVCs, the second-class status at the first-rate tech behemoth pays off. TVCs are asked to list their status as contractors on LinkedIn accounts — but they can still mention Google. Chris Szymczak, a former TVC who worked on marketing for Google from Poland, said multiple full-time coworkers served as a reference for future work. “They were just immensely supportive even past our work relationship,” he said. “The gig was a real springboard for me.”
That ladder is not available for everyone. One former TVC recalls an uncomfortable lesson. A new executive came to the division, sat down with each staffer and asked about his or her “five-year plan,” a standard managerial tactic. The next day, the manager returned sheepishly, explaining that he didn’t realize his report was a contractor rather than full-time staff. He asked that they forget their conversation entirely.