They're Not Employees, They're People.
by Peter F. Drucker
Copyright © 2002 by Harvard Business Review School Publishing Coporation. All rights reserved. February 2002
"Every organization must take management responsibility for all the people whose productivity and performance it relies on..."
Companies Don’t Get It
HR policies still assume that most if not all of the people who work for a company are employees of that company. But as we have seen, that is not true. Some are temps and others are employees of the outsourcers who manage, say, the company’s computer systems or call center. Still others are older part-time workers who have taken early retirement but still work on specific assignments. With all this splintering, no one is left to view the organization in its entirety.
Temp agencies claim to be selling productivity – in other words, to be doing the organization’s oversight job for them – but it’s hard to see how they can deliver. The productivity of the people they supply to a customer depends not only on how and where those workers are placed but also on who manages and motivates them. The temp agency has no control over those last two areas. The PEO, too, manages only its clients’ formal employees, not necessarily part-time, temp, or contract workers.
This lack of oversight is a real problem. Every organization must take management responsibility for all the people whose productivity and performance it relies on – whether they’re temps, part-timers, employees of the organization itself, or employees of its outsourcers, suppliers, and distributors.
There are signs that we are moving in that direction. A European multinational consumer goods maker is about to spin off its large and highly regarded employee management function into a separate corporation that would act as the PEO for the parent company and its employees throughout the world. This PEO would also manage the multinational’s relationships with, and utilization of, people who are not traditional employees of the organization. Eventually, this in-house PEO will offer itself as the coemployer for those who work for the multinational’s suppliers and distributors and for its more than 200 joint ventures and alliances.