Posts Tagged ‘profit’

Contract/temporary employee hiring models look good in the short term, but cost big in the long termMany organizations have adopted a rental model in filling professional positions that require extensive knowledge and experience, as well as in-depth training to get up to speed on the particular projects that these contract/temporary professionals will be working to complete.

The current model of employment looks more like an inventory model (just-in-time) than a well-thought-out business model. It is certainly not a quintessential leader model.

The pros look attractive to organizations from a short-sighted upfront monetary point of view.

Organizations don’t have to deal with the financial and physical overhead of a competitive salary, benefits, a permanent workspace and equipment, and payroll costs (most contract/temporary employees are either paid through a staffing agency that handles payroll or via a 1099 that makes the employee responsible for their own taxes at the end of the year) that a full-time employee incurs.

Profits are a short-term goal, but they won't stay if the infrastructure - including knowledgeable, high-performing employees - are in placeSo, in the short-term, organizations, at least on paper, look like they’re saving a lot of money using contract/temporary employees. Profits are higher. The board of directors is happy. The shareholders are happy. The executive officers are happy.

But the cons, which affect the long run, will eventually make everybody unhappy, and if this current trend lasts several decades, many of these organizations will not exist.


Whether an organization hires a permanent employee or a contract/temporary employee, the same upfront investments have to be made. Because they don’t get translated in monetary terms, they don’t get factored into the cost of having a predominantly constantly-changing contract/temporary workforce.

One of those upfront investments is training. For professional positions, the training can be quite extensive (or it should be – too often the training is haphazard and poor, with the contract/temporary employees thrown in and left to fend for themselves, which causes delays, errors, missed deadlines, and project failures).

Generally, organizations do the same kinds of projects over and over. The details change, but the scope and type of projects is the same.

Typically, contract/temporary employees are hired for a single project and then they are gone and all the knowledge and training they have goes with them.

This means a new batch of contract/temporary employees must be hired for the next project and the same investment in training made all over again.

Only to walk out the door when the project is over, meaning this cycle happens over and over and over again.

Quality is sacrificed with the professional contract/temporary employee model.This is an undocumented cost, but it is huge in the long run. Projects are affected dramatically in terms of productivity and milestone/deadline timeliness, as well as in terms of quality of service.

The net effect is the projects don’t get completed on time, they don’t have a consistent standard of quality, and customers end up unhappy because they don’t get what they paid for.

Customer satisfaction will be eroded by a revolving door of temporary/contract professional writers.This con is lost business both in existing customers who go elsewhere and new customers who don’t show up because they’ve heard quality and service is inconsistent at best and bad at worst.

The long-term con of hiring contract/temporary employees on a project basis instead of hiring full-time, permanent employees is that eventually there will be no customers and the organization will be forced to close.

The secondary long-term impact (con) of an organization closing is that everyone who is a full-time, permanent employee, from the corner offices to the cubes, will no longer have a job. Additionally, shareholders will lose their investments. And the board of directors won’t have anybody to direct.

Quintessential leaders understand that people – not money or things – are an organization’s most valuable resource. They can – and will – make or break an organization.

Therefore, quintessential leaders know people are the most important investment that an organization can make in the long run, so they invest in full-time permanent professional employees to ensure that a quality and lasting infrastructure is in place to provide consistent, quality, and constantly-increased value-added products and services to existing and new customers.

Money comes and goes. Things work and then they don’t. These can be easily and seamlessly addressed and replaced with very little impact on operations.

However, it doesn’t work that way with people.

People alone can increase the worth, the quality, the reputation of an organization. People have experience and knowledge and are able to add to those to bring even more worth to an organization.

When people are a revolving-door commodity, as in the case of most organizations now, increased experience and knowledge walk out with each project, and each next project is basically like starting all over again.

But this cycle gets repeated again and again with the contract/temporary professional employee hiring model.

It makes no sense to use an inventory model as a business model, especially when the cons (and actual costs) far outweigh the pros in the long run.

It is more evidence that there are very few quintessential leaders in decision-making positions in most organizations.

Because if there were, we would not see the contract/temporary professional employee model that most organizations are using, because they’d have the vision to realize what the long-term costs and outcomes would be.

What kind of professional employee model do you and your organization use?

Do you know the investment costs and the long-term costs of the model you use?

Is talent, knowledge, and experience walking out the door every time projects are completed?

It’s time to carefully consider these things.

How are we doing? 



Amazon Fulfillment Centers meet shipping demandsAmazon’s unquintessential leadership is not confined to their corporate office. It literally permeates the entire company including their fulfillment centers from which all shipping of purchases directly from Amazon are done.

Unfortunately, Amazon customers are unknowingly complicit in this aspect of unquintessential leadership, although their demand – and payment for, in the case of Amazon Prime – is why this aspect is in place. (more…)

In a follow-up to last week’s post on CPR and quintessential leadership regarding the action of a Brookdale Senior Living nurse refusing to do CPR on 87-year-old Lorraine Bayless, I saw this news article today where Brookdale Senior Living, which initially backed up the nurse’s refusal to do CPR as being consistent with company policy, has now reversed their position.

The statement says that the incident “resulted from a complete misunderstanding of our practice with regards to emergency medical care for our residents” and that the nurse had “misinterpreted the company’s guidelines.”

This further shows the unquintessential leadership in place at Brookdale Senior Living. First is the “reversal” of a policy that the company defended and stood by several days. Second is the subtle shifting of the blame to the nurse for the lack of medical attention. And the third is the minimalizing language Brookdale Senior Living uses in their reversal statement. To characterize this incident as “misunderstanding” or “misinterpretation” is to basically say it’s not a big deal, even though that misunderstanding and misinterpretation led to somebody’s death.

All of these show just how entrenched the unquintessential leadership is at Brookdale Senior Living. As I said before, it would be naive to believe this is the only senior living company where practices and policies like these are in place and unquintessential leadership is extant through the ranks within the corporation.

But it should serve as a warning and a caution to those of us entrusted with being quintessential leaders in helping our parents as they age to ensure that we’re providing the best and most care for them, as they did for us when we were babies, helpless, and completely dependent on them. These companies, despite their claims, really don’t have “our residents” as their priority. It is about money (greed) and the law (minimum legal liability).

These are driving forces that the unquintessential leadership in these companies come from, along with the lack of character, integrity, ethics, and moral responsibility that many of the individuals that are employed by these companies possess.