Alphabet reportedly had more contractors than direct employees this year

Key Points
  • For the first time ever, Alphabet had more contractors than direct employees this year, a Bloomberg report says.
  • Hiring contractors versus direct employees saves the company money, but workers shoulder the costs and lack of job security.
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Earlier this year, Google parent company Alphabet had more contract workers than direct employees for the first time ever, a person who viewed the numbers on an internal database told Bloomberg.

That's no small number: Alphabet reported 85,050 employees in the first quarter. (That headcount number jumped to 89,058 in Q2, but it's not known whether the contractor number is higher than that.)

While contractors save the company money and can speed up hiring, those workers typically make less, shoulder higher benefit costs, and lack the job security of direct employees.

Alphabet mainly hires contractors for areas where it doesn't have expertise, or when it needs temporary support, like for covering parental leave or spikes in work, a spokesperson says. Contract workers perform a wide range of tasks, including custodial duties, sales jobs, and programming positions. While those employees, hired through staffing firms like Adecco and Cognizant, can use many of the same company perks as regular employees, including free food, their benefits typically come from the agencies. That trims significant costs from Alphabet's balance sheet, but can leave workers with burdensome costs.

One former Google contractor who worked through Adecco told Bloomberg that he had to pay roughly $600 per month for diabetes-related coverage.

Earlier this year, SurveyMonkey started providing its contractor workers with staff benefits like health insurance, time off, and transportation, in response to concerns from direct employees.

Besides lacking benefits, contract workers make less than direct employees. A 2016 report from Benner and Neering found that the average yearly pay for tech employees was $113,000, while white-collar contractors made $53,200 and blue-collar contract workers made $19,900.

Read the Bloomberg story here.

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