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Great story, but it can’t happen today. No janitor works for the company whose floors he’s mopping anymore, so janitors wouldn’t get that company-wide email.

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Are you implying that companies outsource all of the janitorial duties now? I'm in Arkansas, so crack all the jokes you want, but the big places that produce a lot of food (McKee comes to mind - Little Debbie) staff their own positions.

https://mckee.wd1.myworkdayjobs.com/mckee/jobs

So, in other words, yeah, you could be a janitor and potentially propose a new Little Debbie snack right now. That particular dream is still alive!

Yep - many, if not most, factories staff these positions themselves. It fits in with their existing maintenance, assembly, cleaning, warehouse type roles.

It's mainly white collar places that don't know how, or don't want to, hire anyone who does blue collar work.

Part of the reason white collar firms outsource is that benefits usually need to be uniform across all employees. If you are a white collar firm with generous benefit packages, it becomes comparatively expensive to hire blue collar workers yourself compared to outsourcing. Decent health insurance (~$20K/year) is more than the federal minimum wage ($14.5K/year). I'm not suggesting this is moral, but it is reality. At a factory, with many workers at similar pay levels, this won't be as much of an expense.

Unfortunately, a second reason you see outsourcing are job functions where many of the workers in a geographic area are undocumented. Companies can't hire undocumented workers directly, but will allow a middleman to do so on their behalf.

That's not true. You can offer better packages for your higher paid employees.

Outsourcing blue collar labor has to do with offering any benefits at all. Once your company has 50 employees or more, you must offer at least a bare minimum health insurance plan to all full time employees.

Outsourcing is cheaper, because you can deal with small companies that are more focused on taking advantage of employees by doing things like making sure no one works more than 30 hours a week.

> You can offer better packages for your higher paid employees.

Wouldn’t the company lose the tax benefits if they fail non discrimination testing because the highly compensated employees (HCEs) received disproportionate benefits?

Only if the factors you are descriminating with are considered protected. The ACA is still being implemented in this regard, so pay level or executive level may or may not become "protected" but as of now, I don't think it is.

SF's recently-passed 'overpaid executive tax' [1] pushes companies further in this direction.

https://www.nbcnews.com/business/business-news/san-francisco...

I see like the private jet and limo service, that is uniform across all employees and the CEO

I work in a place with one third white collar and two thirds blue collar workers. We have our own 'Facilities' folks that do all kinds of things. We hire a cleaning crew to come in after-hours and handle the janitorial part. Just sayin.

That particular dream, but parent is pointing to a bigger trend, of course. This is a snapshot of the death of upward mobility, the American promise and all that.

https://www.nytimes.com/2017/09/03/upshot/to-understand-risi...

Not all companies, obviously, but the proportion of staff outsourcing has grown in the past few decades.

There are not too many companies where you can start at the bottom and work your way up to the top. Very unlikely in 2021.

There are tons of companies where you start at the bottom, work your way into a basic management role and then after a few years of that start your own company.

You go from janitor to floor polisher to supervisor to manager to slightly more important manager to "I'm starting my own company".

I work for a decent sized company in AR as well. Janitorial and Security are both outsourced. I always assumed for both cost and liability.

I find this contractor mindset amusing from personal perspective.

I've consulted to a company for ~6 years which has gone through some pretty huge growth. Until recently I felt was one of the guys helping the business and just happened to have a finger across several companies in non competing industries.

Now the growth is on and 'corporate employees' are joining mid size success corp. As a consultant so many treat me as second tier as though signing that full time contract changes something. Is strange how that status changes peoples behaviour.

Also amazing how much meetings took over and people there for the sake of it are involved in everything. Changed incredibly in 18 months when the money was rolling in and headcount opened. A bunch for the better but also incredible how much bureaucracy came in so quickly.

It’s amazing that corporate America thinks it can’t hire a at all levels from the custodian to the CEO, but almost every school system and government can figure it out.

Governments (in the west) don't hire their leaders, though. Same is true of schools - principals and the like might be hired, but the school boards that chose them are elected.

And those boards usually select the superintendent and that superintendent certainly didn't start in the system as a janitor, nor did any of the principals under him.

By the West, do you just mean the US? Where else are small potatoes administrative positions like school board, etc. actually elected?

> It’s amazing that corporate America thinks it can’t hire a at all levels (...)

I don't believe that's the case at all.

It's not like they believe they can't hire someone. That's a silly assumption. There is however the idea that there are operational advantages in outsourcing non-core areas of their business. If they hire a specialized contractor to do maintenance tasks then you no longer have to bother with gaining expertise in that area, and you can even scale up and down your service to meet demands.

The rationale is like figuring out how we have lunch. Sure, we can cook it ourselves and it will certainly be cheaper. However, if we pay a third party to provide us with our lunch then we get food cooked by pros and we even have the freedom to pick fancy dishes from some other restaurant if we deem it necessary.

> There is however that there are operational advantages in outsourcing non-core areas of their business. If they hire a specialized contractor to do maintenance tasks then you no longer have to bother with gaining expertise in that area, and you can even scale up and down your service to meet demands.

From what I've seen in practice, it's always about the outside "specialized contractor" breaking various labor laws and generally screwing workers over in order to drive costs down. This way, even with the contractor markup, the company saves money and, at the same time, is not liable and does not take a reputation hit. It's a win-win for everybody but the workers. I guess they don't put that in the MBA textbooks though.

This is a correlation that you've observed that is actually caused by a third variable: these are often low-wage and low-leverage positions. Easily replaceable, low wage employees are common victims of labor law violations regardless of whether they're contractors or not. Employees that are in no position to fight back often get screwed.

The key operational advantage is that you avoid providing any worker protections and can better achieve a race to the bottom via competitive tendering to low-margin outsourcing providers hiring minimum wage employees on temporary contracts.

Or alternatively, they've "figured out" how not to hire people unrelated to their core business? What does Frito-Lay have to be gained from engaging in the janitorial business?

Not paying the person in between? I worked at PepsiCo for a little and most of their job responsibilities weren’t unique to the product offering or business model.

A job that supports the core business is definitely not the same thing as a job unique to the product offering or business model.

e.g. food safety is something that is important to PepsiCo's business, yet they are far from the only business that needs food safety expertise. In contrast, they may also need potholes filled in the parking lot, but they may choose to hire outside help for this, because they do not do it enough to be good or efficient at it. Paying a middleman is often cheaper than hiring labor directly. Labor is the largest single cost for most businesses.

I think the distinctions between supports and essential to value get pretty subjective. Since 2008 the number of contracting roles has increased quite a bit and there are disputes as to whether Uber drivers (or engineers) are employees. I’d claim there is an unnecessary and unhelpful bias towards outsourcing (not saying that it’s always wrong, just more prevalent than ideal...).

Well, Uber drivers definitely directly support Uber's primary business. So I'd say that's a different situation altogether. (and they're not really outsourced, Uber directly "contracts" each one of them) Many businesses fail when trying to outsource staff that directly support their primary product or service.

A more direct comparison to the issue of Frito-Lay's janitorial staff is something like: should Yellow Cab should hire their own car wash staff or make a deal with a local car wash?

Yes, the decisions could go either way depending on circumstances. I think for me this was a good example of needing to stay on topic. Original comment was that not paying a middleman is one potential benefit of keeping common services in house and that many if not most roles could be filled externally.

You can't get kickbacks from the middleman if there is no middleman.

Those gasoline rewards points at my grocery store is the only reason I don't buy my own cow.

Isn't this entire story the answer to that question? Hiring employees who care and feel a sense of ownership pays off.

The story is notable because it is not the norm.

Were starting to see the results of outsourcing everything but your core business and it's not looking like a great strategy.

The software industry hasn't quite figured it out, but specialization is a great strategy for the vast majority of the economy and it has worked extremely well.

See General Electric, Boeing, The TV industry, the chip making industry, and countless others. Well, OK two of those outsourced their core business... They probably didn't understand the concept.

They make food! Cleanliness is core to that business, at least at factories.

YMMV (I am in Austria), but there are advantages and disadvantages, it's not a clear decision. In my ex-company we decided to hire janitors, mainly because we didn't want to deal with different people all the time whom we'd have to teach how to treat computer displays and keyboards every time, with some perhaps slacking or even stealing. The main disadvantage was that as a small company, you're in trouble if all your janitors (or your only one!) are sick or on leave and you can't get a replacement at short notice. Our first hired one still works at that company after 18 years - not bad for an IT startup.

I'm not sure I follow.

The reason that large companies subcontract out these roles is that they're incentivized to do so, not that they "can't figure it out". I'm not sure I've really heard people pretending otherwise.

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