The Business Case for an Equity Strategy Part 4: Responsible Contracting

October 31, 2019

In the fourth part of our business case for an equity strategy, we’ll discuss responsible contracting. If you’d like to get caught up on the first three parts of the blog series, you can check those out here.

Tech companies are outsourcing work they consider to be outside the core competency of the organization. That means working with vendors to meet their needs for service jobs — like janitors, food service workers, shuttle drivers, and security officers — that keep tech campuses running. Tech companies that work with vendors of these services who support their workers with things like a livable wage and safe working conditions will help close the inequality gap, drive better long-term business outcomes, and build trust with the community.

The tech industry employs tens of thousands of subcontracted workers that help the industry thrive. This includes the service workers described above but also includes admin and office roles, and even coding and design work. Although subcontractors work side by side with directly-employed tech workers, they are often not afforded the same job security, workplace safety, and respect on the job.

Maria Trujillo, a custodial worker at a tech company, shared how she was sexually assaulted on the job during a panel conversation hosted by TechEquity and Silicon Valley Rising. In the face of health violations, wage theft, sexual harassment, and discrimination, subcontracted service workers too often find themselves with little recourse to address abuses. As an immigrant, Maria was scared to speak up for fear of losing her job. She also shared that none of the workers received training on sexual abuse or assault prior to starting.

Service workers aren’t the only ones facing unsafe working conditions. Last year more than 20,000 Google employees and white-collar contractors staged a walkout over sexual harassment policies. The walkout highlights common ground between all subcontractors and tech workers; a voice on the job is critical for a healthy and safe workplace no matter your employment status.

Facebook’s* California Director of Public Policy, Michael Matthews, shared his experience when the local Teamsters launched a successful campaign to unionize shuttle drivers during the TechEquity and Silicon Valley Rising panel. He shared that, despite not directly employing the shuttle drivers, Facebook supports the right of workers to unionize, adding that tech companies must hold their vendors to a high standard for contracted work (with or without a union). This example points to a clear path for tech companies and directly-employed staff to support worker-led efforts to improve working conditions on tech campuses.

In addition to unsafe working conditions, subcontracted service workers tend to lack access to a livable wage and opportunities for upward mobility. A recent report from RentCafe looked at the best and worst metro areas to live by profession. The report shows that for service workers, the Bay Area is one of the worst places to live. With the basic cost of living at around $33K a year, most service workers are left with an average debt of $9k at the end of the year. To manage the high cost of living, subcontracted service workers are often working multiple low-wage jobs and still struggling to make ends meet.

The discrepancy between low-wage subcontractors and directly employed workers is deepening inequality across the Bay Area — already an increasingly unaffordable economy. A report by Silicon Valley Institute for Regional Studies found that the Bay is seeing a nearly 1:1 replacement of low-income households by high-income households, creating a crisis of displacement. Limited housing supply and stagnant wages don’t just drive out service workers, but also teachers, first responders, and other critical workers that help our communities flourish.

Finally, upward economic mobility is becoming a rarity. In the early eighties, it was possible for a janitor to rise into the executive ranks at a tech company. The janitor described in this article was directly employed by Kodak, affording her access to the same benefits as the white-collar workers at the company. She had paid vacation, was reimbursed for some college tuition costs, and received a bonus every year. Access to these benefits allowed her to rise through the ranks of the company. Because of the trend towards outsourcing, that path has been all but foreclosed at modern tech companies.

If tech companies aren’t going to directly employ these low-wage workers, they have some responsibility to make sure they are working with vendors that set high labor standards for these workers. When tech companies work with responsible vendors we’ll see more people able to maintain a foothold in their community. Responsible vendors provide livable wages and benefits, fair scheduling, safe working conditions, a voice on the job, and opportunities for professional advancement.

Responsible contracting allows more workers to grow and flourish, maintaining diversity in the cities where we live and work and bolstering the local economy. Tech companies that authentically engage in responsible contracting will find deeper trust within their community and improve their business outcomes in the long run.

*TechEquity Corporate Partner

*TechEquity recently announced a responsible contracting initiative in partnership with Silicon Valley Rising. We’ll be working together to provide a practical definition of a family-supporting job with safe and dignified working conditions for service workers on tech campuses. If you work for a tech company that wants to adopt the standard, please connect with us.

If you work for a tech company and you’re looking to deepen your company’s community engagement, get in touch! We’d love to chat.