Re:My Position On The Disney Layoffs
by jandrewrogers on Wednesday June 17, 2015 @01:21PM
(#9733600)
What you are missing is that they must be paid the prevailing wage for the occupation, not the prevailing wage for the company. This is an important distinction.
Many large and profitable companies find themselves in the position of systematically paying high wages for objectively mediocre employees, a situation that accreted over time. They may not have always been overpaid, just that over time their value and performance has become decoupled from their wages. If you've ever worked at old behemoth companies, they often have entire divisions full of employees that could be accurately described this way but the business is profitable enough overall to absorb paying large groups of people that do not produce much value. This is a management failure to the extent they allowed value and talent to become decoupled from wages over time.
So how does a company correct this so that pay more accurately reflects talent and value created? Asking employees to take a pay cut to reflect their market value is not feasible, particularly if the company is profitable. In these cases, paying the "prevailing wage" to H1b employees to do the same job on a wholesale basis is actually cheaper than the status quo and much easier than suddenly requiring existing employees to have pay that reflects their market value when the entire business unit is systematically overpaying for value.
Outsourcing of business units is often about clearing out deadwood divisions where few people have performed to their wage in ages. It is an unfortunate and real problem. It isn't just overseas either, I've seen this done entirely within the US many times. There is no easy way to re-couple wages and performance for a big organization when they have been allowed to drift apart for years so most companies opt for a complete reboot.
Many large and profitable companies find themselves in the position of systematically paying high wages for objectively mediocre employees, a situation that accreted over time. They may not have always been overpaid, just that over time their value and performance has become decoupled from their wages. If you've ever worked at old behemoth companies, they often have entire divisions full of employees that could be accurately described this way but the business is profitable enough overall to absorb paying large groups of people that do not produce much value. This is a management failure to the extent they allowed value and talent to become decoupled from wages over time.
So how does a company correct this so that pay more accurately reflects talent and value created? Asking employees to take a pay cut to reflect their market value is not feasible, particularly if the company is profitable. In these cases, paying the "prevailing wage" to H1b employees to do the same job on a wholesale basis is actually cheaper than the status quo and much easier than suddenly requiring existing employees to have pay that reflects their market value when the entire business unit is systematically overpaying for value.
Outsourcing of business units is often about clearing out deadwood divisions where few people have performed to their wage in ages. It is an unfortunate and real problem. It isn't just overseas either, I've seen this done entirely within the US many times. There is no easy way to re-couple wages and performance for a big organization when they have been allowed to drift apart for years so most companies opt for a complete reboot.