I see a lot of the big companies like Google, Facebook, Apple etc hire hundreds of contractors that are employed long term, like a couple of years. They have to be contracted through "preferred vendors". They do similar job functions as regular employees, but don't get the same benefits, not even like sick time, vacation time etc. Why do these companies hire contractors? Why do the contractors have to go through "preferred vendors" only, even if that means adding multiple layers of employers in the middle? Why don't the hiring companies ensure that the "preferred vendors" offer comparable vacation time, sick time etc?
Our contractors do not do the same work (at least on my team) as FTEs. They are hired to do work FTEs don't want to do. some companies will allow contractors to do a 1099 (no middleman) but most won't and to make it worse they force them to go with a small subset of contracting firms. My guess is they already have a payroll system in place that they trust as well as proper logistics in place for temporary workers.
It's about saving money, specifically on benefits.
1. Flexibility when you need to get rid of people but don't want to do the layoff 2. Preferred vendors help to smooth operations for a customer: dealing with 5 vendors is easier than with 100 and also reduces the chances for money laundering with pocket vendors by managers. 3. Good question and I agree it is an issue. Another issue I see at Cisco is that a shitty worker is just being moved by vendor from one project to another. Interviews for contractors are easier or sometimes not even there, vendor is supposed to provide qualified resource but often they just don't care.
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I guess contractors are easy to get rid of once the job is done, but in software that mentality seems stupid