Comment by hn_throwaway_99 | Hacker News Reader

Comment by hn_throwaway_99 | Hacker News Reader

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hn_throwaway_99

> Why not hire contractors or contract-to-hire for those bursty work needs?

To start, it's not legal. If the people you are hiring are doing the same work as full time employees, with the same work structure, you're not supposed to hire them as contractors.

> Or spin up a separate company and buy services from them?

I mean, companies certainly do outsource to third parties for "bursty" needs, but if you think this is going to be an important core part of your business going forward, why would you go through the organizational complexity to spin up a new entity? How would you explain this to recruits? "Congrats, you've been hired by the slightly shittier version of us, and when layoffs come you'll be the first to get cut." I mean, companies do actually kinda do that, but it's very much a hierarchical system - anyone with the ability to get hired by "main company" is not going to take a position with "shitty clone".

> If the people you are hiring are doing the same work as full time employees, with the same work structure, you're not supposed to hire them as contractors.

This is not true at all. Many firms do “staff augmentation” for exactly what the parent described, bursty work for clients on a time and materials basis.

Right but the difference is that those contractors need to be W-2 employees of some other company. You can't hire them as 1099 independent contractors. That used to be common practice among tech companies but federal and state income tax authorities have cracked down hard on it.

Agreed.

But the point is there are “bursty” options if firms wish to to pursue it as an option.

Well yes and no. Those contracting firms don't keep a lot of bench resources. During slow periods they lay off employees just like every other employer. And during boom times they jack up their rates and still don't have many experiences contractors available on short notice. Using those staffing agencies works fine for small bursts but if you need thousands then you run into practical limits.

Citation?

Bench is a thing.

It wouldn’t need to be a shitty clone. Maybe it would pay 10% more but be known to have less job security in a downturn.

But also, I didn’t specifically mean 1099 independent contractors, just “contractors”. Meaning, people employed for a fixed contract length of 6 or 12 months and then possibly renewed if business is still good.

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