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Is Microsoft its suppliers’ benevolent benefactor or dictator?

Originally published by Proxima, Jonathan Cooper-Bagnall writes...

Last week, the technology giant Microsoft took a progressive stance with its supplier base, taking steps to ensure that the suppliers with whom it conducts business give their employees at least 15 days of paid leave each year. Sure there’s the questionable policy of corporate dictation (especially in the case of Microsoft, with its Samson and Goliath overtones). And, there’s the inevitable fine print: “this new benefits minimum will apply to suppliers with 50 or more employees in the United States. It will apply to their U.S. employees who have worked for them for more than nine months (1500 hours) and who perform substantial work for Microsoft.

Putting all that aside, this is a uniquely forward-thinking policy that speaks to what research has shown us for some time: time off benefits both employers and employees by contributing to a happier and more productive workforce. Beyond that, however, the policy speaks to two largely unrecognized, but critical, business truths:

  1. Corporate virtualization: As the Microsoft policy concedes, we live in a world where corporate virtualization has taken root. “Hollowed” corporations are directing more and more spend outside the business and looking to a complex web of global specialist suppliers to help deliver on the businesses’ core proposition (See our corporate virtualization study for more on this topic). As a result, the very definition of who and what makes a company has been transformed to mean that external agents can be just as critical to success as internal agents. As such, suppliers, just like “traditional” staff, need to be managed, encouraged, targeted, incentivized sanctioned, coached, rewarded and motivated to help achieve corporate objectives. The fact that Microsoft believes they can impose HR policy on their suppliers is a reflection of just how blurred the lines between company and supplier have become.

To read the full article from Proxima please click here