There are never enough resources to complete our ambitious plans, so Microsoft is constantly hiring help—vendors and contingent staff (CSG). Full-time employees (FTEs) are hired too, but the relationship is different—at least it’s supposed to be.
Ever since the $97 million December 2000 settlement of the “permatemps” case, Microsoft has been very careful to treat vendors and CSG differently than FTEs. These days, processes and policies prevent permatemps. However, that hasn’t wiped out stupidity on this front. FTEs are still asked to do work with little growth potential that is far better assigned to vendors or CSG. Vendors and CSG are still asked to cover work that, if restructured, could yield far better results at a lower cost when accomplished by FTEs.
Why are FTEs doing vendor and CSG work? Why is work that is better accomplished by FTEs left to vendors and CSG? Two reasons: people are lazy and people are ignorant. Let’s expose the lazy and cure the ignorant.
FTE doesn’t actually stand for full time employee; it means full time equivalent. Go figure. CSG stands for contingent staff g-something (group?). CSG is used at Microsoft to refer to individual temporary employees (“give that to the CSG”) and all contingent staff, although officially vendors are a form of contingent staff.
First and foremost, the ignorant must learn the difference between FTEs, vendors, and CSG and understand which assignments they should be given.
Here’s a set of rules to help you assign work. Treat these rules as strong suggestions—every situation is unique.
There are many other policies and guidelines for hiring and using vendors and CSG, and those policies vary by region. This list above helps you decide what sort of people should be assigned to what work, particularly within the United States. Let’s consider some examples.
Within Microsoft, you can tell who are FTEs, vendors, or CSG by their email aliases—an alias starting with “a–” indicates a CSG, an alias starting with “v-” denotes a vendor, and an alias with no dashes signifies an FTE. There are other dash prefixes, but a’s and v’s are the most common.
In addition, the Microsoft badges people use to gain access to company buildings and resources are colored differently for different workers. FTE badges have a blue outline around the photo, while vendor and CSG badges have an orange outline. This has led to the FTE nickname “blue badge.”
The first two rules are basic—highly confidential, ambiguous, or open-ended roles are for FTEs. What about the third rule—jobs with limited growth potential? Receptionists, gardeners, and the janitorial staff play important roles at Microsoft, but they aren’t growth roles at the company. They are done by vendors.
What about folks who send the daily build mail, localizers, or event planners? Those jobs could be designed to be entry level roles that lead to careers in engineering or marketing, but if that’s not the plan, then FTEs shouldn’t do them.
If you as a manager can’t describe how a role is leading an FTE toward his or her career aspirations, then that role needs to transition to a vendor or CSG. The fourth rule often determines the selection. If the role is ongoing, it should be filled by a vendor; otherwise, a CSG could probably handle it (the exception being highly specialized vendor work).
A strong indicator of an ongoing dead end role that should be vended out is an uncommon, yet low-level role. An example is localization. Microsoft used to have localizers on staff. These were low-level jobs that served an ongoing need, yet didn’t have much of a growth path. Our localization leadership reexamined our business model and decided to use a combination of vendors and crowd sourcing for our localization needs, with FTEs continuing to guide the overall process.
Looking at the list of rules, most seem to point to FTEs or vendors. When are CSG folks the right choice? When it’s a temporary assignment for a specific purpose that requires oversight or must be filled quickly.
For example, let’s say you need to hire three people immediately to code and/or test a straightforward new feature to meet one of those random requirements that crops up from time to time. You could pull FTEs off their current assignments to handle this fire drill, but they are working on other critical work items. Hiring three temps to code and/or test the feature makes sense.
Let’s say an engineer on your team suddenly needs to leave for a few months to care for a family member. You can’t afford to scope back the engineer’s work, but you can hire a temp for a few months until your engineer returns. The temp probably won’t replace your engineer’s skill set precisely, but between the temp and the rest of your team, you can handle all the loose ends.
There are many other examples, but they all have the same basic structure—you’ve got a temporary assignment for a specific purpose that requires oversight or quick action. Otherwise, you’d use FTEs or vendors.
Your temp does a great job on the new feature or covering for an employee on leave. Now the feature is done or the employee returns. What’s next for this great CSG? Surely you don’t let her go—there’s plenty of other work to do! Wrong. You let her go.
Temporary employees are, well, temporary. They have a specific purpose. When that purpose is served, the CSG contract is over and the person leaves. Perhaps at a later date you’d hope to hire the CSG into another temporary assignment or even into an open FTE position. However, for now, temporary means temporary, and a contract is a contract.
What happens when you’ve got vendors or CSG doing work that does have Microsoft career growth? Work that is ongoing and requires frequent oversight? Perhaps the work started out specific and temporary, but grew in scope. This sounds like work better suited for FTEs, but you don’t have the headcount. What should you do? You should reexamine your business.
What are you trying to accomplish? How has it changed? How should you operate going forward? Business changes all the time, yet people don’t often reexamine the way they operate their business. Why not? Because they are lazy. Because they get caught up in the day-to-day work. Because the changes come slowly enough to go unnoticed.
For example, say you used to hire CSG to test your service at release time. You didn’t need as many testers during the long product cycle, but hired a bunch for the crunch at the end. Over time, competition and enlightenment moved you to a monthly or even weekly release cycle for your service. Now you’ve got CSG testers on staff all the time, rotating through (no permatemps). It doesn’t make sense anymore. What do you do?
You’ve got a few options:
Business changes are business opportunities. You can ignore them, or use them as a catalyst to remake your team to be more competitive. The opportunities do require you to embrace change, break old habits, and rethink your business.
Do you have the right people doing the right work? Has your business environment changed, yet you and your team haven’t? Get off your butt, and take a close look at how your business is run.
Have you got some folks in dead-end jobs? Fill those roles with vendors instead. Got a quick job to do right away, but you need extra staff to do it? If it can be done offsite, hire a vendor; otherwise, hire some CSG. Are you using CSG for work that has now become commonplace? Convert them to FTEs or adapt to a more competitive approach.
Don’t be lazy—be proactive. Don’t be ignorant—be informed. Use the right folks for the right jobs. Keep your team growing, competitive, and attuned to your business and customers. Make your staff your means to win.