The agreement
There was as recent article in Slashdot about Nielsen outsourcing to TCS. Here is the actual agreement. In there was a short paragraph about overtime. The essence of the clause is that people will not get paid overtime but will be compensated through additional time off.
Here is the relevant paragraph.
Resources assigned to Nielsen’s account will be charged at forty (40) hours a week up to a maximum of two thousand eighty (2,080) hours per year. Any work performed outside of normal weekly or daily business hours by Resource is included in the Rates provided in Schedule C (i.e., there shall be no additional charge for overtime work). If a Resource actually works for more than forty (40) hours during a week with prior approval of the Nielsen Project Manager such additional work may be offset by compensatory time off
What is the problem with this? I believe in capitalism. Why shouldn't two companies make the best agreement between each other? I mean one is buying the other is selling and they agree on the price why should anyone else care?
I think the problem here is that both companies are trying to get something for free. We all know there is no such thing as free lunch. So who is paying and how?
Excees Capacity
Think of it this way. Lets say that you are a company that makes spoons. Currently you produce 100 cases a day. One day you get a large order and the customer wants it right away. Suddenly you need to produce 400 cases a day for a couple of weeks. How do you do this? You already have all your machines and people working at full capacity.
Pay for your lunch buddy
You will probably invest in excess capacity and pass the cost along to the new customer. What I mean is that you have to either buy more spoon making machines or rent more for a short period of time. The machine manufacturer will then decide at what price they will rent or sell the machine to you. You will have to decide is it worth investing in this excess capacity or is it better to let go of this opportunity because the costs exceed the benefits. Since the shareholders will be investing more, they will probably expect the new customer to take on some additional costs for making this sudden large order. Especially if this is one time deal since their investment will sit idle after the order is complete. If this continues to happen, then everyone benefits because the true cost of a large order is then passed on to the person making the large order and everyone is happy.
The free lunch
I think this agreement between TCS and Nielson seems to ignore the laws of free lunch. Not really ignore it but they want someone else to pay for it. Let me explain.
What happens with this no overtime agreement? Lets say you work for TCS in North America. Your manager comes to you and says, can you work this weekend? You can take off Monday and Tuesday next month. So you (being a good team player) say ok. Great. No one had to pay extra, and you got your time off. WRONG.
1) Your weekend, where the rest of your family is free is now taken away.
2) Monday and Tuesday a month from now was probably relatively quiet. So you traded relatively quiet time for a really busy time
3) Management gets free excess capacity without having to pay for it. So they get away with less investment in people and process and resource planning.
4) You had some labor guarantees that were taken away without your permission.
Multiply this times hundred thousand employees working for TCS, guess who paid of Nielsen's overtime cost savings?
A different sacrifice
Not buying the argument? Let's take a different approach. What if you said no? I will not work this weekend. That was not the deal we made when I was hired. I want to spend time with my family or enjoy my leisure in other ways. Of course this is your right and you will be allowed to exercise it (for now).
When you do, you will no longer be a team player. People like you won't get promoted. So the people who will do well under this culture will be people willing to sacrifice their quality of life for the good of the company. In a sense you are penalized for exercising your right.
The bad part of all this is that you never made an explicit agreement with anyone saying that you are willing to give up a better quality of life in exchange for more money. In a way capitalism is not the problem here. You and your employer made an agreement with each other based on free market conditions. You said to each other I am willing to sacrifice X in return for which I get Y from you. But then the equation changed and nobody renegotiated your contract. It changed because your company made an agreement with Nielsen and nobody asked your opinion.
So guess who paid for this agreement between Neilsen and TCS? You.
The cost to you is not time but your Freedom!
P.S. I am not against outsourcing. I think it is a good thing. It allows us to scale as a society and we all benefit from it. I am against giving things away for free or people taking things without consent or paying a price.
The agreement
There was as recent article in Slashdot about Nielsen outsourcing to TCS. Here is the actual agreement. In there was a short paragraph about overtime. The essence of the clause is that people will not get paid overtime but will be compensated through additional time off.
Here is the relevant paragraph.
What is the problem with this? I believe in capitalism. Why shouldn't two companies make the best agreement between each other? I mean one is buying the other is selling and they agree on the price why should anyone else care?
I think the problem here is that both companies are trying to get something for free. We all know there is no such thing as free lunch. So who is paying and how?
Excees Capacity
Think of it this way. Lets say that you are a company that makes spoons. Currently you produce 100 cases a day. One day you get a large order and the customer wants it right away. Suddenly you need to produce 400 cases a day for a couple of weeks. How do you do this? You already have all your machines and people working at full capacity.
Pay for your lunch buddy
You will probably invest in excess capacity and pass the cost along to the new customer. What I mean is that you have to either buy more spoon making machines or rent more for a short period of time. The machine manufacturer will then decide at what price they will rent or sell the machine to you. You will have to decide is it worth investing in this excess capacity or is it better to let go of this opportunity because the costs exceed the benefits. Since the shareholders will be investing more, they will probably expect the new customer to take on some additional costs for making this sudden large order. Especially if this is one time deal since their investment will sit idle after the order is complete. If this continues to happen, then everyone benefits because the true cost of a large order is then passed on to the person making the large order and everyone is happy.
The free lunch
I think this agreement between TCS and Nielson seems to ignore the laws of free lunch. Not really ignore it but they want someone else to pay for it. Let me explain.
What happens with this no overtime agreement? Lets say you work for TCS in North America. Your manager comes to you and says, can you work this weekend? You can take off Monday and Tuesday next month. So you (being a good team player) say ok. Great. No one had to pay extra, and you got your time off. WRONG.
1) Your weekend, where the rest of your family is free is now taken away.
2) Monday and Tuesday a month from now was probably relatively quiet. So you traded relatively quiet time for a really busy time
3) Management gets free excess capacity without having to pay for it. So they get away with less investment in people and process and resource planning.
4) You had some labor guarantees that were taken away without your permission.
Multiply this times hundred thousand employees working for TCS, guess who paid of Nielsen's overtime cost savings?
A different sacrifice
Not buying the argument? Let's take a different approach. What if you said no? I will not work this weekend. That was not the deal we made when I was hired. I want to spend time with my family or enjoy my leisure in other ways. Of course this is your right and you will be allowed to exercise it (for now).
When you do, you will no longer be a team player. People like you won't get promoted. So the people who will do well under this culture will be people willing to sacrifice their quality of life for the good of the company. In a sense you are penalized for exercising your right.
The bad part of all this is that you never made an explicit agreement with anyone saying that you are willing to give up a better quality of life in exchange for more money. In a way capitalism is not the problem here. You and your employer made an agreement with each other based on free market conditions. You said to each other I am willing to sacrifice X in return for which I get Y from you. But then the equation changed and nobody renegotiated your contract. It changed because your company made an agreement with Nielsen and nobody asked your opinion.
So guess who paid for this agreement between Neilsen and TCS? You.
The cost to you is not time but your Freedom!
P.S. I am not against outsourcing. I think it is a good thing. It allows us to scale as a society and we all benefit from it. I am against giving things away for free or people taking things without consent or paying a price.