Should Employees be Required to ‘Vouch’ for Contractors?

Sourcing and Securing the Best Contractor Talent

John F. Smith Managing Director CXC Global Americas

“As companies shift their total talent engagement philosophy and strategies to compete for the best talent available, contractors of all types “employed, independent, self-employed and SOW are playing critical roles. If a contractor management firm was assisting a company like Tesla to navigate the contractor marketplace perhaps these comments could have been avoided.” John F. Smith, Managing Director, CXC Global Americas.


Tesla’s New Requirement for Contractors

In his initial email, Musk described the company’s contractors as a “Russian nesting doll” situation. He further complained that the nature of the contracts encouraged people to make mountains out of molehills in order to maintain their contracts.

“I have been disappointed to discover how many contractor companies are interwoven throughout Tesla,” Musk’s email read. “Often, it is like a Russian nesting doll of contractor, subcontractor, sub-subcontractor, etc. before you finally find someone doing actual work”

During last week’s conference call, Musk elaborated on the problem and said that the contractor situation had gotten out of control.

“…we’re going to scrub the barnacles on that front,” he said. “It’s pretty crazy. We’ve got barnacles on barnacles. So there’s going to be a lot of barnacle removal.”

Musk’s original email gave contractors a week in order to prove their worth to the company, but he has since extended that deadline. However, he is also requiring that contractors have an employee willing to vouch for them or else they will be denied access.

“By default, anyone who does not have a Tesla employee putting their reputation on the line for them will be denied access to our facilities and networks on Monday morning,” Musk’s latest email read. “…Time to scrub off the barnacles.”

It isn’t clear how many contractors this will affect. The company employs roughly 10,000 workers at its Fremont factory alongside hundreds of contractors. However, this is a worldwide policy so it will affect production at all of the company’s facilities.

Musk’s requirement that Tesla employees put their reputation on the line will likely make it very difficult for the majority of contractors to obtain recommendations. After all, his email seems to imply that if a contractor’s performance is deemed unsatisfactory then it could impact the job of the employee who vouched for it.

Musk’s decision might seem a bit harsh, but it may turn out to be an effective way of scrubbing off those barnacles.

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