Microsoft is asking managers across the company to reevaluate the use of external workers on their teams — people who do work for the company via outside vendors — with one simple question in mind: Does that job really need to be done by someone from outside the company?
The question seems like common sense, but keeping tabs on everyone becomes significantly more complicated when you’re an industry giant like Microsoft that relies on tens of thousands of contract positions. These outside staffers often sit right alongside Microsoft workers on the company’s Redmond campus, distinguishable only by the color of their employee badges.
But Microsoft is on a mission to change the way it uses external employees, according to a memo the company posted online. The company wants everyone to be managed under a so-called “outsourced arrangements.” That’s where Microsoft assigns a specific project to a supplier. The supplier then hires staff to do the work and manages its own employees as they work on the project.
By comparison, the kind of arrangement Microsoft hopes to avoid is when a manager hires a contract worker and absorbs him or her onto an internal team, for an indefinite period of time, often reporting directly to a Microsoft manager.
Microsoft’s Chief Procurement Officer Michael Simms wrote in the memo, “Under outsourced arrangements, Microsoft manages projects under a statement of work that is outcome- or deliverable-based and includes a well-defined end-to-end process, consistent key performance indicators and service level agreements. The supplier manages the day-to-day work of their employees.”
“Beyond managing the work more effectively we think these [outsourced] arrangements also benefit the people doing the work,” he added. “In our experience this creates role clarity, and improves the experience for external staff by strengthening the long-term relationship between them and their employer.”
Microsoft started making the shift at the same time the company announced a major reorganization and sweeping layoffs last summer. Microsoft first told its suppliers about a new policy that said external workers wouldn’t be allowed to use Microsoft buildings for six months after every 18 months of continuous access.
Many saw this as the company’s way of weaning itself off its army of external workers, but now Microsoft says that’s not the case. Instead, the company says the new policy is a tool to encourage more of those “outsourced arrangements.”
Those working under the kind of management structure Microsoft is pushing for won’t be affected at all by the policy change. Meanwhile, those not under an outsourced arrangement will lose building access every 18 months — making it much harder for them to do their jobs beyond that point.
“This approach is intended to ensure that Microsoft managers are making thoughtful choices about how and when to use external staff,” Simms wrote.
Microsoft recognizes it will still need some short-term workers to fill in holes on teams under Microsoft managers — but the company wants those to be the exception to the rule.
“At the conclusion of this process, we expect that the significant majority of external staff will be engaged through outsourced arrangements, and will not therefore be subject to the break in building and network access after 18 months,” Simms wrote.
