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Google has unveiled new minimum standards for temps, vendors and contractors (TVCs) in the United States, in response to demands from an employee coalition that included full-time Google staffers as well as temporary workers and contractors.
“Yesterday, we shared an update on some new initiatives to support our extended U.S. workforce — including comprehensive healthcare, 12 weeks parental leave, (US)$15 an hour minimum wage, and $5,000 a year in tuition reimbursement,” Google spokesperson Jenn Kaiser told TechNewsWorld on Wednesday.
Companies that employ U.S. vendors and temporary staff will need to provide the following in order to do business with Google:
- Comprehensive healthcare for employees and their dependents;
- At least eight days of paid sick leave;
- At least $15 an hour by year end. Where the minimum wage already is more, they have to meet the higher requirement;
- 12 weeks of parental leave — not only for birth parents, but also for non-birth parents or adoptive parents; and
- $5,000 per year in tuition reimbursement to learn new skills or take courses.
None of these provisions currently is mandated by U.S. law, Kaiser pointed out.
The minimum wage requirement will go into effect on Jan. 1, 2020; the other benefits will not be required until Jan. 1, 2022.
Google reportedly will identify and address areas of potential improvement outside of the U.S.
Google’s U.S. workforce includes the following:
- Google employees;
- Vendors who work for companies that are under contract with Google to provide specialized services in fields outside of Google’s core competencies;
- Independent contractors — that is, people who are self-employed; and
- Temporary staff who join Google’s workforce on a short-term basis — to sub for people taking parental or short-term leave, for example.
“Companies employ contractors for a variety of reasons,” noted Constellation Research Principal Analyst Holger Mueller, whose focus is the future of work.
“There are temporary needs, and not all contractors are good enough to become [full-time] employees, for instance,” he said.
“Even if you have plenty of money, you don’t need to give it away,” Mueller remarked. “You cannot go back and take away [employees’ and contractors’] salaries when the company does less well.”
Polishing the Image
“In general, this will increase [Google’s] costs, but it should also result in a better quality of worker, and should improve their image, which needs a lot of help at the moment,” observed Rob Enderle, principal analyst at the Enderle Group.
With relation to its workforce policies, Google’s image is somewhat battered.
The plight of Google’s shadow workforce — contractors who don’t get the same benefits as full-time employees — was the subject of a Bloomberg report last summer.
At least 20,000 full-time Google workers joined with contractors in 50 cities worldwide in a walkout last fall to protest the company’s handling of a number of workplace issues, including sexual harassment.
Google’s shadow workforce sent a letter to CEO Sunder Pichai in the aftermath of the walkout, detailing grievances and demanding changes, including the following:
- Better pay and access to benefits on par with full-time employees;
- A career path to full employment; and
- Access to company-wide information on the same terms as Google employees.
Things came to a head on earlier this year, when Google terminated the contracts of 34 of 43 members of the Personality Team, which develops the voice of the Google Assistant. Those dismissed were TVCs in various countries.
The layoffs were to be implemented April 5 in most cases, and July 31 in others.
Full-time employees were barred from offering support to those laid off, because that apparently would have opened Google to legal action.
“That’s when lawyers take over, employees go rogue, and enterprises pay the bill,” Constellation’s Mueller said. “Well, ultimately customers do.”
Google “knew [the layoffs] would not be popular, so they must have had a good reason,” he pointed out. “It’s employees on an AI product resisting letting go of contractors who are no longer needed, likely because of advances in AI.”
More than 900 full time employees signed a letter protesting Google’s termination of the contracts.
The letter demanded that Google take the following steps:
- Respect and uphold existing contracts;
- Pay those laid off whose contracts were shortened for the remaining length of their contracts;
- Respect the work of contractors; convert contract workers to full-time employees and give them the benefits and stability they deserve; and
- Allow FTE colleagues openly empathize with TVCs.
The layoffs were particularly galling because Google has been making money hand over fist. Revenue growth was up 23 percent year over year in 2018, to nearly $137 billion, and up 22 percent for Q4, to more than $39 billion, according to Alphabet and Google Chief Financial Officer Ruth Porat. She predicted “great opportunities ahead.”
“Google just doesn’t get corporate ethics, nor do they seem to understand strong command and control,” Enderle told TechNewsWorld. “Thus they constantly have problems where the employees successfully revolt. This is far from a best practice, though, as firms should be run from the top, not the bottom.”
Google “is a dot-com company that never experienced a true capitalist market before becoming successful,” remarked Michael Jude, program manager at Stratecast/Frost & Sullivan.
“It’s discovering labor relations all over again and finding that labor can exert quite a bit of leverage in the market,” he told TechNewsWorld. “We are in the early stages of creating a new kind of labor union.”
What we are seeing “might be only the first salvo in a continuing fight for higher wages, better benefits, etc.,” Jude noted. Google “ought to send their executive team to talk to GM or Ford.”
The changes may be a plus for employees in terms of day-to-day operations, but from an enterprise agility perspective they may not be such a good idea, observed Constellation’s Mueller.
Google is late to the party. Facebook raised its minimum wage to $15 an hour and offered benefits to U.S.-based contractors last spring, while Amazon raised its minimum wage to $15 an hour and introduced other benefits for all U.S. employees — including seasonal holiday employees and associates employed by temp agencies — last fall.
These changes might impact innovation, Mueller warned. “For seed companies or self-financed startups, $15 an hour is much harder to pay. A little bit of Silicon Valley will die.”
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