Attributed to an anonymous Naybob of the Nattering nature.... and still prescient. Originally published Sunday 01/18/98 in the San Francisco Chronicle. Subsequently a similar oped was published in the San Jose Mercury
Silicon Valley’s Best Practices, The Net Result: Architects of Their Own Demise.
High tech corporations have rode the backs of the high tech workforce to haughty levels of wealth and influence. During the early lean years, workers were told to be patient, they would reap the rewards for their hard work in the years to come. Many a personal sacrifice was made and much uncompensated overtime was worked.
First the employers threw loyalty out the window by redefining the employer- employee relationship (at will employment). Then through bankrupt recruiting (raid the competition) and management practices in regard to hiring (impossible requirements, wage and age discrimination), training (no OTJ) and retention (reeducation, fair wages and overtime compensation), management has dug their own grave.
Now, management wants the high tech worker, to lie down in the grave for them, roll over and become a disposable workforce, whilst the corporations find a cheap source of imported replacement labor. Why else would T.J. Rodgers and the ITAA insist that anything less than "a complete removal of the H1B limitation" would be unacceptable. This is an affront to the American workforce and the education system.
This act of treachery is being carried out by hired high tech lobbyists known as the ITAA. In their effort, these computer braceros have conned our leadership using contrived bogus statistics, lobbying tactics and plenty of soft money contributions.
In the May 3, 1997; San Jose Mercury Business section article "Job recruitment becoming innovative feeding frenzy." Michael McNeal, human resources manager for Cisco made a poignant statement by revealing "One of the things I’m not interested in are the folks actively looking for work. They’re going to job fairs; they’re knocking on your doors already. It’s the people that aren’t. How do I get them to take a look at Cisco?" This statement is both revealing and representative of several problems which manifest themselves within Silicon Valley and Corporate America in general.
Much of this purported "cascading brain drain" is self-induced by the companies themselves. It is the valley’s greed that has created the current situation. Rather than actively developing talent through education, cross training and internal promotion or recruiting individuals who are disenfranchised, have a genuine need and are willing to add value, companies prefer to raid their competitor’s existing talent pool.
Oracle is a prime example of this "best practice". Gerald Corvino, senior vice president and chief information officer for Oracle admits as much in his comment "If you want to target a skill, you just go out and buy it, and throw stock options at it." One wonders where the Oracle 8 project would be without those engineers from Informix. Word on the street had it that much like Apple’s "Copeland" fiasco, Oracle 8 was behind schedule, over budget and could not be finished by the existing talent at Oracle. Product life cycles are shortening, management needs a ready supply of skilled labor to get the product out the door. Management does not want to waste any time or spend additional money with OTJ training.
These costs cut into profit margins and directly affect stock performance and management bonus incentive plans. The path of least resistance is raiding your competitor. It is no mystery why attrition rates are high and the time needed to fill vacancies are increasing. This mercenary behavior escalates the cost of doing business, as well as the cost of living in this already over inflated area. Instead of creating new opportunities, the same old opportunities are recycled (at an ever escalating cost) to members of an elitist club. The elitist club being, those who are employed.
Let’s get something straight, as a "best practice" employers prefer to dedicate scarce resources and time to lure those who do not need a job, nor have the motivation to actively seek a better opportunity. It would seem that these "types" of individuals have their head buried in the sand. This is a reflection of the "types" of people that are considered a "fit" within today’s corporate culture. Those lacking ambition and motivation only need apply, and can aspire to rise to the top.
These are the same "type" of people, who are climbing over one another in a frenzy to bid 10% above already ridiculous asking prices, paying all the sellers closing costs, taking the property "as is", submitting resumes, family and pet pictures. All in an effort to beg for the "privilege" of paying $500,000 or more for a small dilapidated property in Palo Alto.
Enough said for the purported intelligence of these "individuals". Much like the "sensitive and intelligent" members of Heaven’s Gate, these lemmings and corporate clones are the architects of their own demise.
Compounding this problem is the existence of a new paradigm in employer employee relationships. The new paradigm is that the employer is not responsible for the employee’s career, the employee is responsible. Translating this, it means that you come to work, you work and we pay you. When we think that the work can be done just as well and cheaper by someone else, we no longer have any obligation to you.
The problem is that the employee comes to a job with a capital investment in education that should be amortized over the career lifetime. There is at least one industry CEO that has stated that the half life of an engineer is 5 years. The employment of the individual should either produce added payment for the depreciation of the educational asset or should produce training to renew the asset value.
The old paradigm of career employment provided for payment later in ones career (loyalty). The new pro employer "at will" environment calls for payment from month to month. Present salary structures do not provide for after tax return of the educational investment. In order to provide for future supplies of talent, an educational depreciation credit should be allowed or should be covered by increased salaries. In this respect, personnel are not even treated
as well as a piece of machinery.
As if the new paradigm and the "recycling" of jobs were not bad enough, corporations are now attempting to leverage this strategy into a bigger payoff. All this whining about demand for skilled workers outstripping the supply by 10 - 15%. This is amusing at best. There are plenty of skilled fresh graduates, under or un-employed individuals, veteran, handicapped and senior citizens that could be trained and placed to fill the needs.
It is not too far fetched to imagine the following scenario: These corporate “Best practices" prevent hiring domestics in need. The perception that demand is outstripping supply is created. With the "manufactured" need for additional skilled labor, employers lobby congress and the president to relax immigration quotas under the guise of a "threat to competitiveness" crisis.
The loosening of quotas would make a fresh supply of foreign programmers available. The foreign workers are hired at 50 to 60% of the going rate. This is an abuse of the H1B visa program, but there is nothing that the Labor Department can do about it. These immigrants will be glad to take "less" because it’s more than they can get back at home.
The real benefit for them is an open door to America for themselves and all their family members. They will be glad to live 5 or 6 to a one bedroom apartment renting for $1200 per month. This is not a "lowered" standard of living for them, this is a step up. They will also be quiet about "sweatshop" hours, management abuses and are less likely to unionize. Who can blame them? Easily forgotten is the fact that immigrants are not the enemy, we or our ancestors all arrived in this country through immigration. Americans have nothing against someone who wants to improve their standard of living. That is not the issue here.
Once the "crisis" is past, then management decides to "retrench" and cutback in an effort to strengthen the bottom line. Worse yet, a real downturn occurs, causing a bigger glut in the number of unemployed high tech workers. The first to be laid off will be the now overpriced domestics. This creates a flood on the market of formerly expensive talent, which further depresses the compensation rates. The only objective of this scenario is to control the cost of labor to increase profits. Cheap foreign labor is brought in at the expense of American wages and jobs. This is greed, as the "Wall Street" character Gordon Gecko said, Greed is good.
In a recent ABC-TV news report, some major corporations were raving about a new source for a cheap, stable and compliant workforce. The new workforce was referred to as ideal. This wellspring includes one additional benefit, all of its members are incarcerated. Yes, the ideal workforce referred to consisted of prison inmates.
Corporations are allowed to exist by the public for several reasons. We have forgotten that one of the main reasons is to add value to society. One of the components of this value added service is the creation and maintenance of income producing employment opportunities for individuals of the public. The new paradigm of employee - employer relations does not work within the value added equation. Worse yet, a derivative of this new paradigm is that the workforce has become disposable.
The majority of employers are now looking almost strictly at "recent graduates" for their source of labor. Recent grads are initially cheaper on the wage scale as compared to older experienced workers. This source of labor can be rigorously worked for uncompensated overtime because of their general lack of family commitments as compared to older workers. Employers like to "turn em and burn em". Bring in fresh faces every few years, work them to death, burn them out, dispose of them.
Only during the 80’s, did corporate America’s morally bankrupt management and hiring practices display a more wanton disregard for society as a whole. Let the corporate spin-doctors say what they may, the fact remains that most employers are actively practicing discrimination against those who need the jobs and would benefit the most; the older mid career worker; the unemployed; and the disenfranchised worker attempting to transition to another career. These are the same spin-doctors that promulgate a corporate culture supposedly respecting "individuality" and "diversity" while draping itself in the ubiquitous "sensitivity to issues" and pervasive "political correctness" in the work environment.
Silicon Valley creates, perpetuates and plays to a "more value out of fewer people and less effort" mindset. Despite record profits, many companies are streamlining and laying people off. Remember the corporate dictum, executives are only as good as their quarterly results, and do not forget that their bonus is predicated upon it. Anyone old enough to have experienced the catastrophic 80’s first hand knows what is around the bend.
In the 80’s, we became experts on how to make money without producing any tangible products. Mergers, acquisition’s, leveraged buy-outs, junk bonds, service sector growth and escalating real estate costs all contributed to the "trickle down" voodoo economics.
All the harbingers for another collapse are on the horizon. Speculative investing in a stock market totally lacking in fundamental values, greedy, immature yuppies bidding up property prices, questionable hiring practices and corporate behavior, coupled with wholesale avoidance and ignorance of long term fundamental societal problems which beg to be addressed.
According to the new paradigm, the corporations are no longer responsible for the future fate of the workforce. Accordingly, the public should no longer encourage, nor subsidize this long running bacchanalian behavior. A levy should be put on the nameless and faceless. A levy equal to the average unemployment percentage rate of the surrounding counties where the corporation operates. If the average rate of unemployment is 3.5% then all corporations operating in the area must pay 3.5% of their net profits as a tax premium.
This would tie the corporations to true best practices regarding management, education, training, hiring, retention and loyalty (a word remiss in the corporate lexicon). They would have a vested interest in the creation and maintenance of actual new jobs, rather than the recycling of old jobs. This would stop the current discriminatory practices and end the spiraling costs and inflated property values that go along with this binge and purge mentality.
It would re-introduce something that has been sorely lacking in recent times; social and civic responsibility in the corporate and economic equation. In the old capitalism, Henry Ford’s dictum stated that the worker on the assembly line should be able to afford the product that they are producing. In today’s version of capitalism the motto is hooray for me and to hell with you. Jobs are moved to the cheapest labor source or the cheapest labor is moved to the jobs. There is no regard for children working for pennies per day in shoe factories in Asia. Capitalism has run amok.
Carpe diem, for the rich have already built their today’s upon our future, soon there will be no tomorrow’s left for our children, and we will truly be the architect’s of our own demise.
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