[garybizzle]

The author also mentions "Although it may seem like the company is saving money — because you don’t have to provide temporary workers with medical coverage or paid vacation time."

I just want to point out that contractors actually cost the company MORE money than employees, on average around $30k/year per worker. I think the main reason contractors are used is because many full-time employees "settle" somewhat and don't have the same drive that contractors do (i.e., contractors feel they have more to prove and are thus more productive). Also, contractors can be fired without any consequences, which is not to be said about employees. But I don't think cost is the main driver here.

[potatolicious]

I used to work for Amazon, in a different department than the author, and I agree with this part. My old team employed two contractors "in perpetuity", to my protestations, and the reason wasn't monetary.

Not directly anyways.

At the time (circa 2009-10) upper management was freaking out about the economic downturn. Hiring caps were put in place, and every team was watched like a hawk for "unnecessary" headcount. Bringing in a full-timer was basically impossible, especially for a position that was "second class" (read: not a PM/TPM/SDE).

Turns out though, you can hire contractors just fine so long as you could prove need - and this conveniently let you hire someone without exposing yourself in upper-managerial whack-a-mole.

All in all, I learned a lot at Amazon, but it is a terribly managed company as a whole. There are good parts, there are bad parts, but much of the upper management is more interested in politics than the product/customer/company. This sort of systemic dysfunction was just one of many "quirks" of working there.

Funnily enough, that same hiring cap was what eventually got me to leave. During this whole time the team had a need for more software engineering hands, but we were always turned down by management since other teams had more acute needs and needed to fit under the hiring cap. We built up a massive tech debt in the meantime as our maintenance and workload increased at breakneck pace.

Eventually, a couple of years later, the hiring restrictions were relaxed and my team of 3 engineers opened up seven positions in the same month. I spent the next 3-4 months basically interviewing and sitting in meetings full-time. Then I decided I enjoyed coding more than interviewing people and explaining why interviewing people for 5 hours a day was causing nothing to get done.

[ryanobjc]

Another thing is don't forget that Amazon is a cult of personality. The cult of Bezos. Upper management needs to cater to that cult, and it creates a lot of noise that may or may not be making the product or the company better.

Some of Bezos's urges and reactions are good, some are bad. It's not too much unlike Microsoft.

As a species we can do a better job at running companies!

[ryanobjc]

It's hard to say if specifically someone did a cost/benefit/value analysis.

But when you work in a culture of doing things that are frugal, cheap, and those are rewarded, you will be rewarded for doing things that SEEM frugal and cheap.

So even if there is long term value reduction, no one realizes this, or has done the math, and thus it seems like Amazon is saving a butt-load. After all, the face value (in terms of salary) and flexibility of temp workers seems like a win-win, especially emotionally.

[ceol]

> you will be rewarded for doing things that SEEM frugal and cheap.

It's exactly this. Temps are used because they appear to be saving money when reported to The Boss (whoever that may be.) People seem to forget the majority of folks in these companies only care about what they need to do to keep their jobs, so if HR needs to appear to spend less money, they're going to utilize the easiest method for that to happen.

I think everyone has this image in their head that companies operate as efficiently as possible, and if they aren't doing something, there must be a good reason. Often times, this isn't the case; it's more like a freighter being held together with duct tape and shoestring, and through some miracle, it floats.

[ryanobjc]

And don't forget corporate accounting is rarely done in a 'total cost accounting' manner. Estimations and fast heuristics are everywhere.

For example, FTE cost more than contractors. This is a corporate "fact". The long term cost, which is often semi-monetary and the accounting systems don't have a process to calculate this.