Why Do Contractors Contract?
The Theory and Reality of High
End Contingent Labor
Stephen R. Barley
Center For Work, Technology and
Contingent Work is Growing Rapidly
l Because of inconsistent data, difficult to estimate directly
l Growth in Temporary Service Industry -- used as a proxy
» Between 1986 and 1996 total employment grew 1.7% , while TSI
employment grew 10.3%
» Largest percentage increase for any industry tracked by the Dept of
» Growth most rapid in technical and professional occupations.
l Between 1/5th and 1/4th of all new jobs are now some
form of contingent work.
Three Perspectives on Contingent Labor
l Organizational/Strategic (Why do firms use contractors)
» Reduce labor costs (direct and transaction)
» Flexibility (numerical and functional)
» Manage flow of knowledge
l Institutional (collective welfare of employees & society)
» Dual labor market theory -- secondary dynamics infiltrate core
» Benefits, wage levels, security
» Assumes: Most people prefer full time work
l Free Agent
» return to craft based model
» employability, self-reliance
Difficulties with Current Views
l All promote an undifferentiated view of contingent labor.
l All assume work is organized either around organizations or
markets -- overlooks possibility of occupational identities,
affiliations and structures.
l All lack grounding in experiences and perspectives of
l Data: Interviews with 52 technical contractors (1998)
» Silicon Valley and elsewhere
» Purposefully over-sampled women
l Source: Registrants for Web Seminar on Contracting Lifestyle
Small number of open ended questions to insure
consistency of topics
l Why did contractors enter contracting? (How did you
became a contractor?)
l How do contractors view their present situation? (What
are the costs and benefits of contracting? What would you
say to someone who wants to become a contractor?)
Why Did Contractors Enter Contracting?
l Stories are more c