If you want to read the back story and specifics of my current situation, feel free. But I posted the "quandary" first in case you just want to see the question.
THE QUANDARY: Is it fair to keep a contractor over an employee, even if the contractor is providing more of a benefit to the organization?
THE BACK STORY: I lead an Application Development and Support team (I have 6 team members). Aside from java development we handle database administration, networking, linux and windows administrations as well as the administration of all applications, including apps such as Exchange, Blackberry server,Cognos, etc. Our help desk also has 6 members, solving basic desktop issues and forwarding everything else to my team. They sit and surf myspace and the like most of the day and show no interest in learning any of the technologies in the organization so that they could be more active in the department.
The ADS group (mine) is overwhelmed with work. Since the organization is trying to save money, the pressure on my team to deliver is increasing. In the last 3 months I have had the CEO on down asking for our time. I have a full backlog of work forecasted through years end (~280 hrs/wk). On the other hand, our help desk personnel are averaging 1 ticket each every 98 minutes, with an average ticket time of 6 minutes, leaving 92 minutes between calls.
The director had me and the help desk supervisor in his office yesterday and told us we needed to reduce department head count by 1. Instantly the HD supervisor pointed out that I had a contractor and he should be cut. This contractor is arguably one of the most productive members of the department. I of course argue that we could afford to cut from help desk without impacting our users and saving more than the cost of my contractor. Sadly, it isn't the money they care about but the head count according to the director.
This is the annoying part of management. The director is very passive and will take the easy road of getting rid of my contractor using the "he's a contractor..." speech. Even though he privately complains about the help desk to me, he will never say anything to them ... like I said - passive.
My longevity (I have been with the organization longer than anyone in the department.) and accomplishments within the organization are well respected, especially by senior management. I have the ear of the CIO and he and I chat over coffee daily, not to mention we occasionally grab beers after work. The director was brought in about 2 years ago from sister company by the CEO over the objections of the CIO - but I am not privy to the specifics.
THE INEVITABLE OUTCOME: When the director tells me to cut my contractor, I will go to the CIO (I already told the director that if he goes after my team I will head straight to the CIO). That is a given. I carry far more weight than the director and I have no fear of being terminated.
What the CIO will do, is unknown to me. The CIO is business savvy and will do whatever is best for the organization with regards to this matter.