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Saturday, January 19, 2013

Why Can't An Employee Be An Employer?

One of the popular stories making the rounds in the past week is about a computer programmer at an unnamed American company.  It turns out that this programmer found a simpler way to get his work done than doing it himself:  he outsourced his work to other programmers in China.  And he managed it all well enough to get excellent annual reviews from his own employer.  If you missed it, you can read the story here.

So, the employee became an employer.  And the writer of the news story (and other versions of this story that I have read on other websites) refers to this as "a scam".  I am afraid I don't agree with that characterization.  And I am not alone in that.  Usually, stories on Yahoo attract a range of commenters, and most commenters do not agree with others.  But, in the case of this story, there is pretty much near-unanimity among the commenters:  none of them consider this employee a scammer, and in fact, most of them consider him clever and enterprising.

Now, what he did was probably not entirely legal according to whatever employment contract he signed with his employer.  And the way he outsourced the work could lead to a security breach (which is why his employer started investigating in the first place).  He could have set it up so that his "employees" could log into just his workstation, and he should have logged his workstation into the company network himself using the correct security measures instead of letting his "employees" log into the network directly with his credentials.  But, a security breach never did occur, the work he was responsible for doing got done, and that is all that should matter.

But, apparently, the employee is no longer employed because of doing what he did.  That got me thinking.  What exactly is illegal about what he did?  Why did he deserve to lose his job over this?

From an economically rational point of view, I don't see anything wrong with what he did.  He took part of his pay, gave it to someone else and had them do his job.  So, he traded in some of his money for more free time.  Seems like a perfectly rational thing to do.  Think about what a company does.  The owners of the company (the shareholders) don't think they want to or are capable of doing what a chief executive needs to do.  So, they take some of the company's money, give it to somebody and ask him to do the CEO's job.

The CEO does not run the company single-handedly either.  He trades in more of the company's money for employees (vice presidents, secretaries, etc.).  He then gives these people some more of the company's money and asks them to trade it in for more employees.  It doesn't exactly happen in the orderly sequence I have outlined above, but that is how companies are run:  money is traded in for employee time.

I am sure this computer programmer's manager did the exact same thing:  he was handed a chunk of the company's change and asked to trade it in for manpower so that everything the manager is tasked with doing would actually get done.  So, he traded some of that money in for this computer programmer.  Most computer programmers stop the chain at that point, and trade in their own work for that money.  The programmer who is the subject of this story went further, and traded in some of his money for somebody else to get the work done.  And we actually don't know whether the chain stopped there or the person who he was dealing with got somebody else to do the actual coding (which is quite possible!).

Think about the differences between his manager and him.  His manager outsourced some of his own work to this computer programmer using the company's money, not his own.  The programmer outsourced some of his own work to somebody in China using his own money, not the company's.  Ultimately, it did not cost the company any more money, the computer programmer got extra free time that he would not have gotten otherwise, and the programmer in China earned some money that he otherwise would not have.  To me, that sounds like a win-win-win.

The real problem may have been that the company fired the programmer for being made to look bad.  It is obvious that they were wasting a lot of money when they could have found programmers to do the same work for much less money.  This employee exposed them, and firing him was their revenge for that.  At least, even if he is not qualified to be a programmer, he seems more than qualified to oversee their outsourcing program (and believe me, I would be shocked if this company did not outsource any of its work to contractors, domestic or international).  And what the programmer did was not easy.  If you have dealt with outsourced resources in an IT environment, you know exactly what I mean.

But the story opens up another train of thought for me:  This programmer worked in an office, so he had to show up for work, look busy, etc. to earn his money.  For people who work from home, whose work is mostly unsupervised except for the couple of weekly meetings they are expected to phone in to, this kind of enterprising spirit can be very useful.  The employee can work at several different jobs with several different employers, and outsource all of the work to several different "employees" with small parts of his incomes.  The more he does it, the more his total income.  He would be limited only by the amount of work he can coordinate.  But not to worry, he can perhaps outsource that work to somebody else for a little money too!  Behold the birth of a body-shop contract programming outfit!!


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Randall Coleman said...

To me this guy fid nothing wrong. In America we are free. That means if we found a legal way to do our job and make it easier for us, that should be allowed. In my opinion he has a lawsuit. I will be following the outcome.

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