2696207

Why Do Contractors Contract?
The Experience of Highly Skilled Technical Professionals in a Contingent Labor Market Author(s): Gideon Kunda, Stephen R. Barley and James Evans Source: Industrial and Labor Relations Review, Vol. 55, No. 2 (Jan., 2002), pp. 234-261 Published by: Cornell University, School of Industrial & Labor Relations Stable URL: http://www.jstor.org/stable/2696207 . Accessed: 08/04/2013 16:16
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WHY DO CONTRACTORS CONTRACT? THE EXPERIENCE OF HIGHLY SKILLED TECHNICAL PROFESSIONALS

GIDEON
IN A CONTINGENT LABOR MARKET

R. BARLEY, and JAMES EVANS*
KUNDA, STEPHEN
This studyexamines 52 highlyskilled technical contractors' explanations, in 1998, of whytheyentered the contingent labor force and how their subsequent experiences altered their viewpoint. The authors report three general implications of their examination of the little-studied high-skill side of contingent labor. First,current depictions of contingent workare inaccurate. For example, contrary to the pessimistic "employment relations" perspective, most of these intervieweesfound contracting better-payingthan permanent employment; and contrary to optimistic "free agent" views, many reported feeling anxiety and estrangement. Second, occupational networks arose to satisfyneeds (such as for non-contintraining and wage-setting) that employing organizations satisfy gent workers. Third, regarding their place in the labor market,high-skilled and well-paid technical contractors cannot be called-as contingent workersusually are-"secondary sector" workers; and their market is not dyadic, with individuals selling labor and firmsbuying it, but triadic, involving intermediaries such as staffingfirms.
tutions of bureaucratic employment dominated the social organizationofwork. Bureaucratic employmentwas built on a remained simple bargain: as long as firms profitable,theywould provide employees with secure jobs in return for effortand loyalty. Although there were notable exceptions on the economy's periphery (Doeringer and Piore 1971; Baron and
insticentury, For mostof thetwentieth
Bielby 1984; Piore 1979; Friedland 1975), until the 1980s most middle-class Americans believed thatworkingfora reputable employcompanywould guaranteelife-long ment,as long as theyperformedconscientiouslyand the economy remained strong. In recentyears,threedevelopmentshave shaken this belief. First,in the name of firms in theeconomy's core have efficiency, repeatedly laid off large numbers of employees independent of economic cycles. For the firsttime in history,layoffshave
*Gideon Kunda is Chair, Department of Labor Studies, Tel Aviv University;Stephen R. Barley is Director,Center forWorkTechnology and Organization,DepartmentofManagement, Science, and Engineering, Stanford University;and James Evans is a Doctoral Student in the Department of Sociology, StanfordUniversity.
The authors deeply appreciate the commentsand suggestions that Diane Bailey, RosemaryBatt, Yinon Cohen, and Pamela Hinds made on earlier draftsof this paper.
Review, Vol. 55, No. 2 (January2002). ? by Cornell University. Industrialand LaborRelations 0019-7939/00/5502 $01.00
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WHY DO CONTRACTORS CONTRACT? targetedsignificant numbers of managers and professionals (Heckscher 1994; Osterman 1996; Cappelli 1999). Second, despite inconclusive data (Diebold, Neumark, and Polsky 1997; Bureau of Labor Statistics1997), many people believe thatjob tenure has become shorter and labor marketsmore volatile. Finally,perhaps the mostradical break withthe system of bureaucratic employmenthas been the expansion of the so-called "contingentlabor force" (Barker and Christensen1998). The term contingent laborhas been applied to a wide range of short-term employment arrangements, including part-time work,temporary employment, self-employment,contracting, outsourcing,and homebased work. Estimates of the size of the contingent labor force varywidely. The most conservativedata come fromthe Bureau of Labor Statistics. Under the most liberal of itsrestricted definitions, the BLS estimates that 13.3% of Americans were contingentlyemployed in 1995 (Polivka 1996a, 1996b; Cohany 1996; Cohany et al. 1998).1 Estimates for 1997 were nearly identical.2 More liberal estimatessuggest that the number may be as high as 30%
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'Under its most liberal, restricteddefinition,the BLS defines the contingentworkforce as the sum of (a) all wage and salaryworkerswho "do not expect their employment to last," except for those who planned to leave theirjobs forpersonal reasons, (b) all "self employed (both the incorporated and the unincorporated) and independent contractorswho expect to be and had been in their present assignment for less than 1 year," and (c) temporaryhelp and contractworkerswho "expected to workfor the customersto whom they were assigned forone yearor less" (Cohany et al. 1998:43-44). 2The BLS repeated its assessment of the contingent workforce in the February1997 supplement to the CPS. The number of workersin the BLS's broadest definition of contingent labor declined by .5%, while the percentage ofAmericansin each of the four alternativeemploymentrelationsremained constant. Since two data points do not make a trend, it is to determinewhetherthe decline represents difficult random variationor an actual shift awayfromcontingentlabor. The BLS's data also cannot tellus whether contingent labor increased prior to 1995, as most commentatorscontend.
(Dillon 1987; Belous 1989; Kalleberg et al. 1997). Estimates of the spread of contingent workare hampered bythe absence oflongitudinal data. However,data on the temporary serviceindustry suggesttwosignificant trends (U.S. Department of Commerce 1997). First,between 1986 and 1996 there was spectacular growthin the relativesize of the temporary serviceindustry:in those years, employment in temporaryservices grew 10.3% while total employmentin the United States grewby only 1.7%. Second, therehas been a change in the distribution ofcontingentjobs. Between 1991 and 1996, the percentage of the temporaryservice industry's payroll represented by office, clerical, and medical workdeclined, while the industrial,technical, and professional segments (which include managers) became more important (StaffingIndustry Report 1997). Thus, three conclusions seem reasonable on the basis of available data: a significant proportion of Americans are contingently employed; this proportion has increased over the past decade; and technicians, professionals,and managers represent a larger portion of the contingent labor force than in the past. Although researchers have begun to attend to contingentwork, theyhave yet to explore all of its facets fully. The largest body of research, conducted primarily by social scientists and management scholars, addresses the issue of how firmsuse contractorsto respond flexibly to increasingly competitive environments (Handy 1989; Mangum, Mayall, and Nelson 1985; Abraham 1988; Abraham and Taylor 1996; Pfeffer and Baron 1988; Harrisonand Kelley 1993; Davis-Blake and Uzzi 1993; Matusik and Hill 1998). Because this literature itfocusesmore takesthefirm's perspective, or less exclusivelyon the demand for contractorsand ignores both the contractors' experience and the significance of contracting as an employment relationship. Scholars who have studied contingent labor fromtheworker'sperspectivehave usually focused their attention on relatively low-skilled occupations long associatedwith
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INDUSTRIAL AND LABOR RELATIONS REVIEW ment is not only a prescriptionfor stable employment; it is the foundation for America's unique system of social welfare, which hinges, to some degree, on employers fulfilling legallyprescribed obligations to a permanent workforce. Employmentrelations researchers view the expansion ofthe contingentlabor force of the system as a threatto the stability and have historicallyframed the threat from theperspectiveofdual-labormarkettheory. This theory holds that industrial economies are composed of two sectors: "primary" and "secondary" (Piore and Sable 1984; Osterman 1984; Baron and Bielby 1984). Primary labor markets providestable employment,career ladders, job security, high wages, and attractivebenefit plans. Secondary labor marketsare, by comparison, less stable and markedbylowerwages. Participantsare more likelyto be members of minority groups and to workforemployerswho providefewbenefits.Because scholars have viewed secondarylabor marketsas peripheral, they have treated them as a social problem to be controlled withinthe of existinginstitutions(for exframework ample, minimumwage laws), ratherthanas a threatto bureaucratic employment. Scholars in this tradition,however,fear that the growthof contingentworkrepresentsthe spread of secondarylabor market dynamicsinto the economy's core. Moreover, it appears that permanent jobs are themselves no longer secure (Osterman 1996; Cappelli 1999). Manyfearthatthese developments are undermining the welland theirfamilies(Hipple being ofworkers and Stewart1996a, 1996b; Osterman 1988; Christensen 1998). Others have argued thatcontingentwork'sspread mayresultin demand forgovernment assistance growing (Dillon 1987) and suggestthatcontingent employmentfacilitatesthe oppression of marginal groups (Martella 1991; Polivka 1996b; Spalter-Rothand Hartmann 1998; Banegin 1998). Finally,some critics charge thatthe shiftto contingentlabor is part of an attempt toundermineunions (Aronowitz and Defazio 1994; Rifkin1995). In short, the employment relations scholars view contingent labor as an unraveling of the
temporary labor. Althoughtraditional temporarywork remains an importantaspect of contemporary labor markets,unless researchers also take highly skilled contingent workinto account, theyriskdeveloping theoriesofcontingent employment that are of limited scope. This paper takes a step towardbroadening our image of contingent work by exploring the experiences of highly skilled technicalcontractors. Bydocumentinghow technical contractorsview theirworld,we hope to facilitatecomparisons with traditional contingent work and to illustrate how theories of contingent employment can be profitably developed. We begin by reviewingtwo literaturesthat speak to the significance and experience of contracting. Afterhighlightingtheir limitations, we turnawayfromreceived notions ofwhat contingentwork means and ask: how do highlyskilled, technical contractorsmake sense of their situation? We develop our answer by turningto what contractorssay about why they became contractors and how their subsequent experiences altered theirperspective. We conclude by exploring the implicationsof our studyfor existing theories of contingentwork. Perspectives on the Implications of Contingent Labor and soJournalists, consultants,lawyers, cial scientistshave interpretedcontingent workfromtwopoints ofview,whatwe shall call the "employmentrelations" and the "free agent" perspectives. Each offersa distinctaccount of contingentworkand its implications. The Employment Relations Perspective relawho adopt an employment Analysts tions perspective situate contingent emcontext. They ploymentin itsinstitutional are concerned withthe experience of emthe collectivewelfareof employployment, ees, and, by extension, the welfareof societyas a whole (Osterman 1988; Cappelli et al. 1997; Parker 1994; Smith1998; Cappelli 1999). In this view,bureaucratic employ-
WHY DO CONTRACTORS systemof employmentestablished by the capiNew Deal and a returnto laissez-faire talism. Consequently,theyargue foreither strengthening New Deal institutions or thatwillprosearchingfornew institutions (Benner 1997; Carre vide enhanced security andJoshi 1997). The employmentrelations view of contingentworkas exploitativeis most vividly articulatedbyethnographiesof temporary work in clerical or industrial settings (McAlester 1998; Parker 1994; Henson 1996; Rogers 1995; Smith 1996, 1998). Informants in these studies report being employmentby cirforced into temporary cumstances that make it difficultto find full-time jobs. They subsequently experiand ence a continuing sense of insecurity Poor workingconditions are uncertainty.3 oftendescribed: low wages and high workrelated expenses; disputesbetween clients, agencies, and workers over payment and hours; antagonism from permanent employees and a sense of isolation,exclusion, work. and dissatisfaction with estrangement, In comparison to these disadvantages,informants reportfewadvantages.Some claim of scheduling their to enjoy the flexibility work and the freedom of being able to unpleasant. rejectjobs thatare particularly Others saytheypreferto receive theircomcash" ratherthanwaitfor pensation as "fast a monthlypaycheck. Still others report obtaining satisfactionfrom knowing that needed" bycompatheirservicesare "really nies in crisis. Overall, however,the disadvantages of contingent work clearly outweigh its advantages. Although the exploitation and social problems that concern employmentrelations researchers deserve close attention, one can question whethertheirviewvalidly describes all contingent work. With few exceptions (Barker and Christensen 1998; Jurik1998), the employmentrelations im-
CONTRACT?
237
age of contingentworkrelies on studies of occupations. Even labor econolow-skilled mistsand industrialrelations researchers, who acknowledge the changing composition of the contingentworkforce,quickly lose sight of the highly skilled sector in their analysis because theyrely on aggregate data, which is weighted toward the employresponses oftraditionaltemporary ees (Cappelli 1999; Kalleberg et al. 1997; Spalter-Rothet al. 1997). Yet, studentsof work have long understood that there are substantial differencesin social organization between low- and high-skilledwork. Permanent professional, technical, and managerial jobs are usually more secure, morevaried,and more more remunerative, intrinsicallyinvolving than lower-skilled service and industrialjobs. It stands to reason that low- and high-skilledcontingent work should varyin similarways. By skilledcontingent work, overlookinghighly relationsperspectiverisks the employment ofcontracting with confoundingtheeffects occupations. the correlates of low-skill Free Agent Perspective In sharp contrast, the free agent perspectivefocuses almost entirelyon the exskilledcontractors.Most perience ofhighly huadvocates of free agency are futurists, inman resource consultants, or staffing dustry expertswho writebooks aimed at the general public or publish articlesin popular magazines. Nevertheless,theirpoint of view is consistentwithmore academic versions of "agencytheory"in thatboth stress the advantages of free labor markets. Advocates of free agency agree that bureaucratic employmentand its supporting are unraveling, but,unlikethose institutions who adopt the employmentrelations perspective, they endorse this development. They portrayorganizational employment as constrainingand unjust and view 'jobs" and "careers" as outmoded inventions of revolutionthatweredesigned theindustrial to meet the needs of large organizations (Bridges 1994; Pink 1998; Beck 1992; Caulkin 1997; Darby 1997). In the unraveling of bureaucratic employmenttheysee a
3Jurik (1998) is a notable exception in that only home workersfeltforced 20% of her self-employed, fixed into theirhome businesses. Nevertheless,Jurik on the perceptions ofthat20% in assessinghow home workersfeltabout theirwork arrangements.
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INDUSTRIAL AND LABOR RELATIONS REVIEW credible views of contingent labor, their depictions are too neat and narrowto capof the phenomena. ture the full diversity Three limitations are particularlysignificant. First,both perspectiveslack groundbroad ingin theexperiencesofa sufficiently range of contingent workers to facilitate comparisons. The free agent literatureis largelynon-empirical. Its proponents rely exclusivelyon anecdotes purposefullyselected to support theirviews (see Bridges 1994; Davis and Meyer 1998). In contrast, proponents of the employment relations perspective rely on careful research, but theirconcernwithexploitationhas led them to study low-skilled temporary workers. Thus, both literatureslack empirical studies of highlyskilled contractors. Second, both perspectives overlook diand contradictionseven withinocversity cupational sectors.Advocatesoffreeagency generallyignore the risksand costs of contracting. Although employmentrelations researchers acknowledge that contingent thepositiveaspects workmayhave benefits, are typicallydownplayed. Nevertheless, there is evidence that even lower-skilled contractorshave a wider range of experiences than most commentatorsimplyand thatthevariationmaydepend on situational and organizational factors (Lautsch 1998; Benson 1998; Pearce 1993; Cohen and Haberfeld 1993; Smith 1998). both perspectivesimplythatconFinally, tractorsuse limited conceptual frames to make sense of themselvesand theirwork. relationsscholarsassume that Employment people construct the meaning of work against a backdrop of involvementin an organization. Advocates of the freeagency viewsuggestthatpeople define themselves bytheirskillsand bythe role theyplayin an entrepreneurial labor market. This dichotomyof hierarchies and marketsartificially limits and simplifiesthe social contextsin which contingentworkersoperate the and develop a sense ofself. Specifically, literatureon contingentworklargelyoverlooks occupation-long knownto serveas a (Van Maanen and source ofworkeridentity Barley1984) -as a locus fororganizingand sense-making.
return to craft-basedmodels of employment centered on marketable skills that release people from the confines of bureaucracy. Advocatesoffreeagencypromote a postindustrial vision of economic individualism in which entrepreneurial workersregain independence and recapture from employersa deserved portion of theirsurplus value. The free agent literature is replete withstories of contractorswho vacation when and where theychoose, who live in exotic places because they can telecommute, and who successfullyintegrate the demands of their workwith the needs of their family. Although professional and technicalworkers typically populate such stories,proponents contend that people in all socio-economic strata could benefit by adopting a similar attitude to freeagency's work(Bridges 1994). In short, emphasis on self-relianceand individualism echoes the rhetoric of Social Darwinism popular at the turn of the twentieth century(Bendix 1956). The free agent perspective paints an optimisticpicture of contingentlabor that contrastssharplywiththe employmentrelationsliterature point bypoint. Advocates of freeagency argue thatcontingentstatus is a choice rather than a necessity;that it representsliberation ratherthan isolation about fromtheworkplace; thatuncertainty is actuallyminimizedand that employment enhances personal control; that flexibility contractorsreceive more money than permanent employees because they are paid for everyhour that theywork at rates that reflecta premium for skills; and that full use of their skillsresultsin a sense of selfactualization rather than estrangement. Although it is plausible that some of free agency's claims are consistentwiththe exin professional and periencesofcontractors at presentthereis technical labor markets, no way to know, because there have been no studies of high-endcontracting. Limitations of Existing Perspectives Althoughthe employmentrelationsand free agent perspectives attempt to posit
WHY DO CONTRACTORS Developing a more accurate image of contingent work will require collecting grounded data on various formsof contingent workand on the contingentworkers' perspective.This willenable researchersto develop better typologies of contingent employmentand explain distinctionsthat currently appear to be contradictory. Itwas in order to develop a more grounded image of contingent employmentin skilled labor marketsthatwe set out to studywhy engineers, software developers, and information technology professionals become contractorsand how theyultimately come to interpretthe advantages and disadvantages of contracting.As we shall show,our data indicate that neither an employment relations nor a free agent perspective adequately captures the themes that run through the contractors' discourse. Instead, our analysissuggeststhatthe experiis more varieence of high-endcontracting gated than currentlyimagined and that notions of occupation are important for make sense understandinghow contractors of theirsituation. Data and Methods Because there is at presentno representative enumerationofindividualswho work as technical contractors,researchers have several equally troublesome options for One choosingrespondentsand informants. firm could convincea staffing to make available the names of the people in theirdatabases, sample fromone of several resume databanks found on the Internet,or seek subscription records from magazines targeted at contractors. All of these sources, however,are biased in different ways. Our froma approach was to select informants list of nearly 500 contractors who registeredfora seminaron contracting lifestyles broadcast live over the World Wide Web in December 1997. The seminarwas sponsored bya staffing firm thatspecializes in recruiting and placing technical professionalsand was widely advertised in contractingcircles throughout the nation via a number of channels, including magazines writtenfor technical
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contractors. During the spring and summer of 1998, we interviewed 42 contractors who had registeredfortheWeb Seminar,as well as 10 otherswhom we encountered in the course of the larger project of which this studywas a part or who were recommended to us bycontractors whomwe had already interviewed. We actively sought contractorsfromoutside Silicon Valley to ensure that our conclusions were not regionally biased, and we rnade a particular effort to interview women. Although our informants are not representativein a statisticalsense, theyspan numerous regions, occupations, and age cohorts, as well as both genders. For thisreason, we are reasonablyconfidentthatour data identify key issues and dilemmas thatare ofwidespread concern to technical contractors.4 All informants workedin engineeringor informationtechnology-orientedoccupations. Table 1 reports the distributionof informantsacross occupations as well as theirage, theirmaritalstatus, and thelength of time they had worked as contractors. Although the contractorsranged from 26 to 68 years old, most were over 40. Fortyfivepercent had been contractingfor five years or less, 33% for six to ten years,and 22% forover a decade. Sixty-nine percent of the informantswere married. These demographic patterns parallel those reported in Black and Andreini's (1997) surveyof IT contractorsin the Silicon Valley. in our study Fifteenof the contractors were women. Fifty-eight percent worked in the Silicon Valley, and the remainder worked in Austin, Houston, Baltimore, Seattle, Toronto,LosAngeles, Atlanta,Billings,and Norwalk (Connecticut). eitherwere indeFive of our informants pendent contractorsor were incorporated as a business.5 The restworked as employ-
4It is importantto recognize that substantivecoverage does not implydistributional coverage. For this reason we make no population inferences, and we urge readers to exercise the same restraint. 5The distinctions between an independent contractor,a contractorwho worksas an employee of a and a contractorwho is incorporated as staffing firm,
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INDUSTRIAL AND LABOR RELATIONS REVIEW contractingjob. To fortheirfirst ployment determinehowsubsequentexperienceshad affected their perception of contracting, we asked them to tell us later in the interviewwhattheysaw as the costsand benefits of contracting and what they would tell someone who was thinkingabout becoming a contractor.Our intentwasto discover ifand how the contractor'sinterpretations of contractinghad changed. Although the of the past may reconstruction informants' have been colored by theirsituationat the thereis evidence that timeof the interview, theywere able to distinguishbetween the two time periods: informantstended to answer the firstset of questions using the past tense and the second withthe present theiranswerswere tense. More important, We used answersto different. substantively the first question to develop our analysisof informants'"reasons for becoming a conand the second set forour analysis tractor" of how they interpreted the "realities of contracting."7 Reasons for Becoming a Contractor toldabout thatour informants The stories how and why they became contractors evinced three broad themes that,when arrayed sequentially, reveal an underlying The narrative narrativeof transformation. begins with the lament of an expert for whom the tension between the ideal of and the political realtechnical rationality oforganizationallifehas become a source ity of simmering discontent. Then, an employer'saction or an unanticipatedevent leads the exthat underminesjob security pert to act on his or her discontent. Aided byserendipitousencounterswiththeworld
firms thatspecialized in findees of staffing jobs and servedas the coning contractors' tractors' employer of record while they worked at a client firm.6Most informants firms had worked with numerous staffing over their career, and 37% had at some time secured a contract through the firm that sponsored the Web seminar. Doctoral students trained in ethnographic interviewingconducted most of the interviews, which were structured around a common set of open-ended questions developed to ensure that each interview covered the same topics. These included the contractors'reasons forbecomtheir ing a contractor,theircareer history, perceptions of contracting,their business practices, and their personal and family wereconducted interviews life.Twenty-four over the telephone and 28 were conducted face-to-face. The decision to use a teledepended interview phone or face-to-face on the informants'preferences and geowere regraphical location. All interviews corded and transcribed. we asked In the course of each interview, to reconstructthe sequence of informants emevents that led them to leave full-time
a business concern the contractors' tax status, not firms to findjobs. Indepenwhethertheyuse staffing a number dent contractorsare individualswho satisfy of criteriaset by the IRS, who receive wages, but who pay taxes and social security on a quarterly basis. Contractors who are incorporated have registered themselvesas a business and bill fortheirservicesvia an invoice fromtheircorporation. All other contractors are "W2's," working as employees of a staffing firmthat withholds taxes and social security. Like W2's, independent and incorporated contractors firmsto findjobs, but unlike sometimes use staffing W2's theyare not obligated to do so. 6We use the term "client firm" to refer to the organization for which a contractorperformswork. Many firmsrecruit their own contractors,but then firmforthe demand thattheyregisterwitha staffing firmbecomes duration of the contract. The staffing the contractor'semployerof record and takes on the legal responsibilitiesof an employer, including the withholding of taxes and social securitypayments. firma fee that inThe client firmpays the staffing cludes the contractors' wages as well as the staffing firm's"mark-up."
70ne limitationof our data is that we cannot say how people who had entered and then leftcontracting would have responded to our questions. There is no systematicway to identifyindividuals who leave contracting. Nevertheless, several informantssaid theyintended to return to permanent employment. Several others had moved back and forth between contracting and permanent employment over the course of their careers.
WHY DO CONTRACTORS CONTRACT? chooses to theexpertfinally ofcontracting, employment escape the world of full-time into the world of contingentwork,which promises a wayof lifemore consistentwith the expert's worldview. Expertise and Discontent Informantswove their tales of discontent with permanent employmentaround three motifs: politics,incompetence, and inequity. Together, these motifsdepicted organizationsas irrationaland capricious. "Politics" was the term informantsmost used to referto the endless ways frequently in which the machinations and manipulaothersundermined tions of self-interested as a criterionfororgatechnical rationality nizational action. Often subsumed under the label of politics were managers' personal agendas and collectiveinterests.The view that managers acted to furthertheir own interests was so widespread thatinformants frequently portrayedtechnical professionals and projects as pawns in management's political games. A board designerrecounted: "I used to have written on mygrease board, 'Politics Is Our Most ImportantProject.' The boss came around and saw that and it went away real quick. Butit'strue:we'rejust toolsin theirproject" M, C50).8 A verification (Board designer, engineer offereda similar,albeit less humorous view: I worked a lotoflonghours. Itwasforpolitics. theproject done. Itwaslike Itwasn't for getting I was doing thisfor somebody else's ego, or else'spersonal orcareergoals. They somebody orthat donebased couldcheckoff, they gotthis done not on my work.I wasgetting theproject forthegoals oftheprojectbutforthegoals of thepeople above. (Verification engineer, M, Cl 9) Politicswas not confined to hierarchical relationshipsand interactions: peers were
Table 1. Informant Characteristics: Occupation, Age, Marital Status, and Tenure as a Contractor. Dimension Occupation SoftwareDevelopers Hardware Engineers Technical Writers Quality Assurance InformationTechnology Project Managers Marketing Age 60s 50-59 40-49 30-39 20-29 Marital Status Married Single or Divorced Yearsas a Contractor 1-5 6-10 11-15 16-20 21-25 over 25 4% 19 38 29 10 69% 31 45% 33 12 4 4 2
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Percentage 40% 12 13 12 17 4 2
said to be as political as management. Organizational life was, therefore, rife with conflicting agendas, which informants perceived as a waste of time and a source of tension. You have to listen to a lot of people's agendas, spend time in a lot of unnecessary meetings, to play to keep everybodyhappy, trying trying work-related,it's their game. It's not strictly veryunproductive,and it can be verytense....
But I've seen people in meetings who don't talk
to each other there's so much tension going on.

(Mechanical design engineer,M, C44)
information on the 8Toassist we provide readers, informant's andgender aswellas a unique occupation identifier foreach excerpt citedin thetext.We use theformat identifier) ",which gender, "(occupation, appearsat theend ofeach quotation.
Incompetence was the second source of discontent that informants routinely mentioned. Whereas they portrayed politics as an aspect of social life, they saw incompetence as an attribute of specific individuals. Organizational leaders were sometimes a target of criticism. For example, a software
designer with over 15 years' experience
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INDUSTRIAL AND LABOR RELATIONS REVIEW

poorly planned. Like when I was working at [Astrotech]. The project manager there was bordering on schizophrenic; things changed everyday: the project plan, the featuresof the softwareproduct. They changed every day! When thathappens, people cannot get anywork done. And then I-and the rest of the teamwould be berated for not gettingenough work done. They hire people as project managers without having worked up through the ranks. They have not done the work that the people theyare managingare doing. They have no clue as to what is required to get thingsdone. They don't knowwhat is reasonable and what is not. (Database administrator, M, C34).
incomInformants felt that managerial petence bred trouble for individuals as well For individuals, as organizations. living with incompetence a sense of produced indignity and injustice. A quality assurance technician who had been laid off by a manas incompetent ager whom he perceived "To have a person like that say, explained, 'You have been tagged and you don't have a job any more,' was just too much. This bozo is telling me I don't have a job any more and he's still working?" (Quality assurmanagement, ance, F, C13). Incompetent usually combined with other associated factors, also made experts feel they had little voice, a situation that informants viewed as detrimental to organizational performance. in project An informant who specialized the costs of supunderscored management pressing an expert's voice:
offereda scathingindictmentof entrepreneurial management in Silicon Valley, which he claimed was full of "ego-maniacs whojust happened to stumbleinto a bunch of money." He continued: "There's plenty of people out therewho've made moneyin spite of themselves. It's the BeverlyHillbillystory. They were shootin' at a rabbit, struck oil, and now they think they're a genius" (Software developer, M, C39). Anothersoftware designer said he had turned to contractingafterencountering a series of senior managers whose incompetence shaded into dishonesty: I wasat thenavalshipyard fora coupleofyears, and they weregoingnowhere. I theoretically reported to thechief financial officer and they in a couple, howdo we say,"yo-yos." brought Wecaught one oftheCFO's funneling stuff into hiscondo in Florida.We had a seriesofCFO's andeachone hada different ideaofwhat needed tobe done and howtodo it,and I'm going, "No, I'm not playing anymore."You know? There was no real strategy deor anything.(Software signer, M, C12) However, it was middle managementand project managers, in particular-for whom contractorsreservedtheirmost sustained and detailed accusations of incompetence. The comic strip"Dilbert,"which depicts the travailsof technical professionals who workformanagers who lack requisite skills,was a popular source of imagery. A softwaresupport technician made the connection: "I don't know if you read 'Dilbert,' but it's almostprophetic. I mean, theyhire people to be managers thatyou'd say, 'Why in the world is this person leading?' Theyjust don't have the skills" (Software support, M, C18). Oftenaccompanying such complaints was the belief that informantswere more rationaland capable than themanagersforwhomthey had worked. A database administrator'scomments illustratethisperspective: I thinkI am a littlebit smarter thana lot of people out there. If therewere reallygood project managers outthere, there wouldnotbe are any contractors.The reason contractors hired is because they[organizations] are in are in so deep is deep shit.Andthereasonthey because theyhave been poorlymanaged or
In the corporate world you may have an opinion, but you are not allowed to say it. When I worked on the project in Missouri,I said: "We are going to lose our rear ends on thisproject!" They recognize that now. But then theysaid: "You are not a team player. You are giving up before the battle starts." No, this is reality! Fifteen million dollars later, they will come back and say: "Whydidn't you tell us?" (Project M, C14) manager,
The informants' third source of disconthat permanent tent was their perception Many claimed employmentwas inequitable. that employers exploited technical experts by requiring long hours without commensurate pay:
There's no compensation for engineers. I had
WHY DO CONTRACTORS CONTRACT?

to take a lower salary,I didn't get to take any vacation,and I workeda lot longer hours. When I worked at Motorola the last time as a permanent employee, I was required to work 12-hour shifts withno extrapay. And itjust wenton like thatformonthsand monthsand months. (Verificationengineer, M, C19) I don't workforfree anymore. As an employee I did thata lot, because I was exempt and didn't get paid forovertime. I have observed that the guy who will work for free-they willjust give him more workforfree. And I have noticed that no good deed goes unpunished when it comes to workingfor free and volunteeringto do so. (Software developer, M, C48) Inequity, however, was not simply a financial matter. Contractors claimed that the growing tendency for firms to demand loyaltywithout offering security was fundamentally unfair: As time went on I saw that companies want but theywill not-and in some sense loyalty, cannot-give loyaltyto their employees. You know, if the company is falling apart, if it's going bankrupt-they're going to lay off employees. They're going to tryand remain a fromme as viable entity. But, theywant loyalty an employee. Now,whyshould I do that? What do I get out of this relationship? I have to to reviews,to whateverthe latest subject myself reviewingtechnique is out there. Peer reviews thisweek, somethingelse next week. I have to to all of thisstuff, company polisubject myself tics,forwhat?Whatis itthatI'm going to getout of that? (Software M, C48) developer, Informants claimed that inequitable employment relationships created an unpleasant work environment. A programmer spoke of the pettiness and competitiveness she had observed among full-time employees who felt they were improperly compensated: I was working a contract at TRW just around Christmas. People were veryupset because the bonus was a thousand dollars and to get your thousand dollar bonus you had to walk on water. Bonuses were graded, and theywere arguing and complaining and yelling in the halls. And I'm thinking,"Whatis the matterwithyou people. Whyare you doing thisfora thousanddollar bonus? You're highlypaid people. Why are you standing here screaming about a mere thousand dollars? It's nothingin the grand
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involved in schemeofthings!" Buteverybody's shouldbe getting all thepolitics ofstuff-who F, C27) what, and why. (Programmer, Ultimately, politics, incompetence, and and underinequityexacerbated insecurity mined a climateof trust.A technicalwriter described the fear of layoffsshe had obemployees in firms served among full-time in the Silicon Valley: "You can smell the fearin the halls when you walkinto some of those buildings. People are so tense, so afraidthatthey are going to screwup. They wonder about the next layoff"(Technical Panel A of Table 2, which displays the number (and percentage) of informants who spontaneously mentioned politics (31 %), incompetence (33%), and inequity (21%) as sources of dissatisfactionwith permanent employment, indicates how widespread themes of expertise and discontentwere among the technical contractors we interviewed. Since other informants may have failed to voice similardisone can onlyinterpretthese contentment, percentages as a lower bound. Nevertheless it is instructiveto note that without prompting, over half of the informants mentioned at least one of these themes when explaining whytheybecame contractors. Triggers for Change Althoughdiscontentwiththe exigencies ofpermanentemployment waswidespread, it was insufficient to motivatemost of our to turnto contracting. Inforinterviewees mants did not generallydecide to become until theyencountered layoffs, contractors acquisitions, financiallytroubled employers, deteriorating work conditions, and other events thatmade changingjobs suddenly seem inevitable or desirable. These could neither were events that informants anticipate nor control. For at least 50% (see panel B of Table 2), such events triggered a choice between seeking another full-time position, becoming a contractor, or becoming unemployed. were By far the most common triggers downsizing and other situations that sugwriter, F, C8).
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AND LABOR RELATIONS
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Table 2. Themes in Contractors'Accounts of Entering Contracting.

Theme A. Expertise and Discontent Organizational Politics Incompetent Management Inequity WhoMentioned at Least One Theme Number ofContractors B. Triggers Laid Off Unable to Find Full-Time Work Probable Loss ofJob DeterioratingWork Conditions Boring or Routine Work Prospect of Undesired Relocation or Travel at Least One Theme Number WhoMentioned ofContractors C. Factors Encouraging Escape into Contracting Encounter withContractors Encounter withStaffing Firms Desire to Work for a Specific Company Encounter withFriends/PriorCustomers Who Said They Could Use Someone withInformant'sSkills WhoMentioned at Least One Theme Number ofContractors D. AnticipatedRewards Money Autonomyat Work Development of Marketable New Skills Control over Time Entrepreneurialism Job Variety Number WhoMentioned at Least One Theme ofContractors Number 16 17 11 28 11 3 11 4 3 3 26 11 11 6 2 27 23 7 8 6 3 4 32 Percentage 31 33 21 54 21 6 21 8 6 6 50 21 21 12 4 52 44 14 15 12 6 8 61
Notes: The themes are listed in the order in which theyappear in the paper. The total number of informants in each panel is the sum of all informants mentioningat least one thematic item mentioned in the panel and hence cannot be computed by summing the number of informantswho mentioned each item.
gestedjob loss was imminent.Eleven (21 %; see Table 2, panel B) of the contractors were actuallylaid offfromtheirlast permanentjob. Most wentdirectly into contract-
Applewasspeculating aboutlayoffs, so many of what wewoulddo in that us had begunthinking theidea ofbecomcase. I had been toying with inga contractor before and so I decidedthatif I wereto be laid off, I wouldbecomea contractor. So that'show I got into it. I knewthat a contractor somecourbecoming would require
age and a leap of faithof sortsbecause contracting is, you know, unstable by its nature, and I knewI would need to have somethingto live on while gettingmyself going. And yetI knew that it was somethingthat I ultimately wanted to do ing: and itwasjust a question ofwhen I'd get up the In March of'97 Applehad a hugelayoff, seemed 40% of courage to take thisstep. And the layoff mydepartment was cut,and I was one of the like the perfectopportunitybecause we all got people laid off. This was a long, drawn-out severancepackages thatsoftenedthefall. (Techprocess,and therealreadywere rumorsthat nical writer, F, C24) Others (3 informants) initially looked for permanent work after being laid off, but could not find it. I didn't realize at the time, when I quit DEC, that it was changing mylife forever. I went to

Apollo; four months later I got caught in the wave at Apollo, and it decimated the layoff first entire tech writingdepartment. Four months afterthat, another 20 to 30 percent were laid off. Shortlyafter that,Apollo was bought by Hewlett-Packard. Apollo went right down, it was absolutelyamazing. When I got laid offat Apollo, thatwasit. I could not finda permanent job anywherein Massachusetts. So I startedto M, C9) go contractinstead. (Technicalwriter, A number of contractors (11, or 21%) did not wait for the pink slip. Observing that their employer was having financial difficulties, they decided to leave the firm before it collapsed around them: Hayes filed for Chapter 11 protection. They reorganized, but in the midstof all successfully this,I said, "Look, they'renot being veryinnoAnd they'renot putting vativetechnology-wise. any money into new products like I thinkthey should. Ijust don't see it being viable." People boss, were bailing out leftand right. Myformer who had already quit, said, "Look, call up this company, MRJ, Inc. [a staffingfirm]. They need somebody like you and they're paying reallygood money." MRJmade me an offer. I said, "Man, this is just too good to turndown." M, engineer, systems So I leftHayes." (Embedded C41) For another set of contractors (4, or 8%), deteriorating working conditions were sufficientto trigger the shiftto contracting, even though these events did not explicitly threaten theirjob security. For example, a multimedia developer had been demoted, felt unappreciated, and saw the acquisition of his company as a sign that it was time to move on: I was in computer support for seven years,and at one point I was a manager but I got demoted and I ended up being in fieldservice. There was a period of about twoyears there,where about job and I wanted to everysingle day I hated my get out of it. When the company I was working withgot sold to a bigger company,I said, "I am not doing thisagain," and I left. So thatis what I mean by push. If a company keeps rejecting and does not take advantage of the skillsI have, That is enough there is no sense of fulfillment. of a push. It was sort of like, the universe is giving me a hint, maybe you should move on. M, C3) developer, (Multimedia Others indicated that they turned to con-
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tractingbecause theywere bored (3 informants) or because theiremployerhad asked them to relocate and theydid not want to move (3 informants). Escape into Contracting Triggeringeventswere crucial fordeciding to move frompermanentto contingent employment,because theyled informants to consider their options. However, even the experience of being laid off was, by to tipthebalance in favor insufficient itself, of becoming a contractor. As 52% of our informantsspontaneously reported (see Table 2, panel C), the decision to enter contracting often required exposure to people or opportunities that made contractingseem more viable than takinganjob. Exposure to contractother full-time ing could occur through encounters with firms,and potential contractors,staffing clients. had workedbeside conMost informants tractorsin previous jobs where they had opportunities to observe the practicalities of contingent employment. Informants were particularlytaken with the idea that contractorsmade more money for doing percent of our the same work. Twenty-one informantsnoted that when they finally made their decision, other contractors served as role models: at also working contractors Therewereseveral were they and I foundoutthat GeneralElectric I waseventhough than a lotmoremoney making I did. So at one didn'thave thebenefits they thepeopleI was with pointI had a disagreement and you," for and I said,"Theheckwith working I quit GeneralElectricand I wentto thejob the guysthatwere shop thatwas employing at GE and I said, "Do youguyshavea working said, "Oh yeahwe And they call foranybody?" do, andwewillevengiveyouyourjobback." So job [at GE] back at about a gave me my they M, assurance, increasein salary. (Quality third
CD
Encounters with staffingfirmswere a second, common stimulus that led inforas an option. mantsto consider contracting especiallythose in Technical professionals, encounter repmanagerial roles, routinely
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myown boss. All of a sudden I had a one-year contractfull-time withUCLA to do thisproject. (Software developer, M, C28) Opportunities also came from customers of former employers who believed that an informant had valuable skills for which they were willing to pay high rates on a contingent basis. A software developer explained how he was hired to develop and maintain software sold by his former employer: The customerswerejust veryeasy to find. They wanted custom development. They were existing customersof the softwarehouse that I was working for. The companydid not offer custom development services. In the last two years,in fact,itbecame obvious thatthe presidentdidn't reallywant to take the company anywhereand was actuallylooking to sell it. More and more customerswere gettingantsy. They stillwanted modifications. So that's when I went into contracting.And it was byword of mouth. I had to turndown work,therewas so much work. (Softwaredeveloper, F, C11)
resentativesof staffing firmsseeking new recruitsand job openings. Eleven of our informants(21%; see Table 2, panel C) reportedbeing lured into contracting after encounteringagentsof staffing firms at the verytimewhen they were readyto consider change:
How did I get into contracting? The company thatI workedforhired contractors.And at one point they finishedup the portionofthe project for the contractorsand theylet them go. The company that they worked for, the Registry, called up a fewweeks later and said, "Hey, do you need anybodyelse?" I said "No." They said, "How would you like to go to workas a contrac" And I said: "Sure!" (Database administrator? tor, M, C34)
Another12% ofour informants said they entered contractingbecause theywanted to workfor a specificfirm, but found that the firm would onlyhire themon a contingent basis. In fact,some firms appeared to have an explicit policy of hiringpeople as contractors to assess whetherto offer a fulltimejob:
I was workinghorrendous hours and I got fed up withit aftera while. Myneighbor said: "I see your light on at 3:30 everymorning. What's going on?" And I said, "WellI'm workingon this RISC chip." She said her husband was at IBM, and suggestedI try there. So I talked to IBM and theygave me this six-page folder and said they didn't hire anybodywho had experience. They hired everybodyright out of school. I said, "How do you gain experience? How do you hire people fromoutside?" And theysaid, "Wellyou have to come in as a contractor." So I did that. I got a one-yearcontract,and then I got a six monthextension. (Verification engineer, M, C19)
Anticipated Rewards
Encounters with contractors were crucial for informants because they modeled a way to escape discontent while gaining benefitsthat seemed more attractive than those associated with full-time work. Of the various advantages of contracting, the most frequently and compellingly expressed was the belief that contractors made more money. Forty-four percent of our informants volunteered that theywere drawn to contracting primarilybecause theythought they would make more money. A numerical control programmer captured the general tenor of contracting's economic lure: A littleless than a yearago, myfamily and I were livingin Seattle and we were gettinga littletight on money-gettingbehind,getting in debt toobecause Boeing did not pay enough for me to withoutmywifeworking.She supportmyfamily doesn't work and I don't believe she should have to. We have four children. I actually worked two or three jobs at one time for about a year. I was even delivering newspapers and doing other odd jobs. At Boeing I was making about $40,000 to $44,000 a year plus overtime which maybe averaged out to be another $5,000 a year. Here, in eight
A final type of encounter that pulled informants to contracting was a directoffer of contingent employmentfrom a potential client. In some cases, offers came from personal friendsand acquaintances:
A friendof mine, a diving buddy actually,who was the AssistantDean of UCLA needed someone withmyskillset to do a major project. She said: "Gee it would be greatif you were available!" and I was like, "Well,yeah, maybe I could be available." So I decided thatitwas timeto get out of the corporation, go offon my own and startmaking some money formyself and being

months I've made about $115,000. programmer, M, C47) (N.C.
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or control,butbecause they liked flexibility, the entrepreneurial excitement of stringcontracts ing togethera seriesof temporary In fact, the lure of money was so persuasive or because the sought variety they (6%) that contractors were willing to forgo what brought (8%). that contractinginevitably they saw as the benefits of a more tradiOur informants'stories of how theybetional career: came contractors suggestthatexplanations for the rise of high-end contingent work It was a big move, frompermanent to contract. I gave up the chance to climb the corporate thatconsider onlya one-sided set of causal ladder, the security, benefits. I mean, you lose techfactors cannot adequately explain why everything.As a permanent employee you can nical professionalsbecorne contractors.As climb up the ladder in the company and get scholars of employment relations would more responsibility, more opportunities. But anticipate, downsizing, outsourcing, and you lose everything as a contractor. [Interviewer: related practices triggeredmovementinto So why didyoumove?] The money! They paid a for a significantminorityof contracting lot more! (Systems administrator, M, C42) informants (Cappelli 1999; Barker and Enhanced income, however, was not the Christensen1998). But the individualistic only attractive feature of contracting. A and financialmotivesthatfigureso prominumber of informants (14%) anticipated nentlyin free agency's rhetoricof employmore autonomy in their work. abilitywere also integral to many contractors' accounts. Moreover, serendipitous I really wanted to have a little more freedom encounters with the world of contracting with. I had and choice aboutwhat I was involved seem a were criticalformakingcontracting been doing softwaresupport for networkfax products and I ended up doing some support realistic option at a crucial point in time. forsome developmentwork fora companybuildThe complexity of "pushes" and "pulls" ing networkinterfacecards and I reallywanted into contractingmake that led informants to gravitatemore towardnetworkingon a fullit difficult to distinguishcontingentworktime basis. (Systems M, C6) administrator, ers who entered temporarylabor markets voluntarily fromthose who did so involunOthers (15%) anticipated developing new tarily(for example, Tilly 1991). At least skills: "I thought, I've been doing this mostofwhomcould firmware stuffand systems bit for quite a among our informants, have easily found a permanent job, the while. Maybe I need to branch out and learn some of this IT stuff, like client server decision to enter contracting usually and networks and GUI's and all this" (Emevinced attributesof both. In short,the decision to become a conbeddedsystems engineer, M, C41). Still others tractorseems to reflecta mix of structural (12%) sought more control over their time. A marketer described how she quit a perand economic factors as well as a set of motives rooted in a professional ideology manent position and came back as a conof work. Most informantsviewed themtractor to gain the flexibility to pursue selves as experts and subscribed to the nomultiple jobs: tion that decisions about work should be The company did not allow part-timeemploygoverned primarily byan ethic of technical ees, so I had to be a temp. I was outsourced rationality based on logic, reason, and practhrougha regulartempplacementagency,working for him half day versus being a full-time ticality. But theyhad discovered, to their chagrin, not only that organizational life employee. Then I was free to work at the lectures and video company forhalf of the day. deviatedfromthewaytheybelieved organiAnd itwas flexiblehours. Ijust had to tell them zations should operate, but also that, as the day before what time I would be expected. experts, they were not always given the The flexible hours reallyhelped, being able to respect theythoughttheydeserved. In this juggle these things. (Marketer, F, C15) sense, the contractor's discontent is remiA few of our informants were drawn to niscent of the difficultiessociologists of work have repeatedly discovered among contracting notbecause theywanted money,
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INDUSTRIAL AND LABOR RELATIONS REVIEW clues about the relativeimportance of the themesamong technical contractors: they are, at best, lower bounds of a sample estiwerenotrespondmate,because informants ing to structuredquestions. Independence versus Being an Outsider iniAs previouslydiscussed, informants as a wayofgainperceived contracting tially ing independence and distance from the irrationalitiesof organizational life. As panel A of Table 3 indicates, even after years of experience, at least 69% of our informants continued to view independence as one of contracting'sadvantages. Like manycontractors(37%), a qualityassurance specialistfeltthatcontractinghad delivered the promised escape fromorganizational politics: times youcanbe removed many Asa contractor, fromcorporatepolitics-not removedcomyou so that butat enoughofa distance pletely, don't have to take a position-you can be as involvedas you want to be. Whereasas an whether I found that youareinvolved employee, tobe ornot. Contractors canstepback youwant do that.They becausepeopleletthem say, a bit, liketherest of isn'thereforever "Ohthis person assurance technician, F, C13) us." (Quality the Contractingalso grantedinformants freedom to express professional opinions and offered at least the illusion of more control over their own time, in part because theywere less investedin the organization and less enmeshed in social relationships at work (31 %). Because contractors were exposed to manyworkenvironments, 21 % also mentioned thattheyexperienced in theirwork: more challenge and variety is I get to do The thingI likewithconsulting different things.AndI knowthere'san end to a project.I wasoffered itand I can do another I thought I didconsider butwhen it, full-timejob; about it, I realizedI would stillbe doing the samething.So I optednotto takeit. (Multimedia developer, F, C26) In other words, contractorsapparently found that moving from job to job relieved them of the burdens they associated with full membership in an organi-
professionals in bureaucratic settings (Marcson 1960; Ritti1971; Raelin 1985). Although some contractorsfound their motiveforentering discontenta sufficient contracting,most required a push from before theytook action. theirenvironment At thispoint, an encounter witha contracor potential client made firm, tor,staffing contingent employmentseem like an option that would allow informantsto align theirworklifewiththeirprofessionalideology. Contractorsnot only hoped to make more money,theywanted to be treated as knowledgeable and enjoy the autonomy, and influencethey believed they flexibility, therefore,inideserved. Our informants, saw contractingas a wayto escape the tially burdens of organizational life,while securing the benefits and respect befittinga professional. The practicalrealitiesof conhowever,soon proved to be more tracting, complicated and ambiguous than most newlyminted contractorsanticipated. Realities of Contracting When asked to evaluate theirexperience as contractorsand offeradvice for those who mightfollow in theirfootsteps,informantsarticulateda more complex and differentiatedview of contractingthan when they spoke about why they had become contractors. Experience as a contractor cast new light on their original concerns and posed a new set of problems. A few contractorseven expressed belated recognitionthattheyhad lost some of the advanemployment. Most had tages of full-time a come to perceive twosides to contracting, matched set of pros and cons that suggested underlying tensions. The informants' discourse on the realities of contracting centered on four themes, each marked by an opposition: independence versus being an outsider, securityversus enhanced income versus hiduncertainty, den costs, and skills as expertise versus skillsas a commodity. Table 3 documents the number of informants who spontaneously voiced each theme during their interviews. As with Table 2, these percentages mustbe read as
WHY DO CONTRACTORS
CONTRACT?
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Table3. Themes in Informants'Accounts of Their Experience as Contractors.

Theme A. Independence Versus Being an Outsider Independence Escape fromOrganizational Politics Freedom to Express Opinions Job Variety Theme at Least One Independence TotalMentioning Beingan Outsider Unable to Speak for Client Company Clients Bar Access to Information/Technology Treated as an Outsider Repeating Cycles-Adapt to New Firms at Least One Outsider Theme TotalMentioning B. Job SecurityVersus Uncertainty Greater Securitya Uncertainty Uncertainty/Lackof Security Must Repeatedly Look forWork Must Endure Periods withoutMoney to Pay Bills at Least One Uncertainty Theme Total Mentioning C. Enhanced Income Versus Hidden Costs EnhancedIncomea Hidden Costs No Benefits Skills Training Costs ResponsibilityforTaxes and Fear of IRS Downtime Costs Lack of Stock Options at Least One Hidden Cost Total Mentioning D. Skill as Professional Expertise Versus Commodity Professional Expertise Developing Marketable New Skills/Learning Gaining Influence and Respect at Least One Expertise Theme Total Mentioning Commodity Having to Keep Skills Current Finding Specialized Niche Theme at Least One Commodity TotalMentioning Number of Informants of Percentage Informants
19 16 11 36 3 7 10 6 18 10 17 6 4 21 26 15 13 4 11 2 29
37 31 21 69 6 13 19 12 35 19 33 12 8 42 50 29 21 8 21 4 56
15 10 21 9 3 11
29 19 40 17 6 21
Notes: The themes are listed in the order in which theyappear in the paper. The total is the sum of all informantsmentioning at least one theme in this category and so cannot be mentioning each theme. computed by adding the number of informants variants,item and theme total are equivalent. Because this theme had no significant
zation. But, once they experienced the realities of contracting, theyalso discovered thatindependence had a price: they were now outsiders who developed only short-term relationships with employers.
Their status as outsiders manifested itself in a varietyof ways. For example, a design engineer lamented that he was no longer granted the right to speak for the company:
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communityof writers. In contrastto the experience I had at Apple where I was part of a large well-respecteddocumentation group that was doing a lot of interesting thingsand had somewhat of a vision for the future. There were opportunities for individuals to feel part of something greater and more important. As a tied to the goals of contractor,I'm temporarily all these different groups. I have myown personal goals, but less of a sense of, you know, belonging and community. (Technicalwriter, F, C24) Others (12%) mentioned the frustration of becoming acclimated to a new setting only to leave and start over somewhere else. A mechanical engineer described the experience of being a professional stranger: You go to a new company, theylook on you as outsider. They don't tellyou much, and you're a strangerin the beginning,and it takes a while to get to knowthem. You have to proveyourself all over again. It takes a while to establish yourself. By the time you establish yourself, you're out of the company. Your workis done and you're gone. So that's the downside. (Mechanicaldesign engineer, M, C44) When informants began contracting, being a perpetual newcomer was not entirely negative. It offered diversityand opportunities to learn. Over time, however, the positive aspects of being an outsider could fade and the negative aspects predominate. As a programmer, who had been a contractor nearly all his career, put it: "You're having to figure out a new culture every time you change jobs. It's tough. At the beginning that was one of the benefits, but now it's getting to be one of the drags" (Programmer, M, C21). In short, the majority of informants felt that contracting had liberated them from the costs of membership in an organizational community. Many had entered contracting, at least in part, to escape such costs, and most remained disdainful of organizations' social demands. After working a number of contracts, however, informants discovered that freeing oneself from organizational life entailed accepting a new the existential status of a perburden: petual stranger.
When it comes to representingthe company,I can make recommendations and all that. But when it comes down to it, I can't speak for the company. I don't have the authorityto do thingsin theirname even though I have a job description that says, "OK, this contract employee is the one who willrecommend go-no-go on thiskind of thing." So it'sjust ... it's a minor littlepoint,but it's a point nevertheless. (Design engineer, M, C5) More crucially, and less symbolically, some (13%) discovered that being an outsider could limit their access to more interesting work, thereby undercutting one of contracting's perceived advantages: There's one big difference. I can't do some thingsI could do as a permanentemployee. I'm working on a joint venture project on nonvolatilememory.But there're some aspects ofit I can't get involved in because I'm a contract person, not a permanent employee. I'm not permanent, so I mightwalk away from it and leave a hole in their group. Also, they don't want to give out thatsort of technical information to just anybody. It's sort of like the company'sjewels: process information and stuff like that. (Verification engineer, M, C19) Contractors also found that they were not always treated well by permanent employees, precisely because they were perceived as outsiders. A programmer expressed the perception well: "Some companies don't treat contractors as good as their employees. In a lot of places, employees are a little unfriendly because they're really cautious about what information to share with you" (Programmer, M, C22). Informants were conscious of the day-to-day consequences of lacking full membership in an organization, such as being excluded from company parties or being given an undesirable workspace. Most considered these consequences to be an acceptable price for contracting's advantages, but a significant minority (19%) found them troublesome and spoke openly of their dissatisfaction with being a person without a community: The one thing I've actually never really talked about is the lack of belonging. As a contractor, you often go fromgroup to group. You don't reallyfeel tied to the goals and vision of anyone
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To manage isolation, some contractors belied popular perceptions of contingent employment'suncertainty: along occupational developed affiliations and professionallines. For instance,some Job securityis the ability to get a job. Staff participatedin-and one even founded-a you can be fired people don't havejob security; users' group where software developers whenever the company likes. And theydon't gathered to exchange informationabout have the networks.They can't call someone and technicaland career issues. Othersworked get a job tomorrowmorning. They thinkthey firms whosebusinessmodel through staffing butit's on paper. People don't havejob security approached thatof an occupational collecis when you have a realize thatreal job security actuallyaffili- networkof managers and recruiterswhere you tive,and one technicalwriter ated withan occupational union. Still oth- simplycall them and say, "OK mycontractfinished," and they say, "Great, I can place you ers turned to virtualcommunities on the World Wide Web fortechnical and profes- somewhere tomorrow morning." The social person has no connections to sional support as well as for findingwork. realityis, the staff don't have social relationships. They a nextjob. recognized the imAlmost all informants They're isolated. A contractor has these relaportance of cultivatinginformalnetworks tionships. That's real job security. That's the composed of professional peers and, in real game. (Technical M, C32) writer, fact,the majorityhad such networks. For veteran contractors, in particular, these you make People alwayssaid, "Oh, contracting, forthe comprovided a substitute networks a lot of moneybut yourfutureis not secure. No theyhad renounced, but the infor- job security."I have never ever been firedfrom munity ajob. There've been a number of timesI was at mal networksthat most contractorsmainplaces where theyhad layoffs.Big tearfulscene tained had not developed into an extended professionalcommunity.These networks, out in the parking lot after the big companywide meeting. "Oh I'm going to missyou." "Oh nevertheless,helped contractors address I don't know what I am going to do." I'm the problem ofjob another keydifficulty: watchingthese people-you know,hip flasksof security. vodka, tearfulgoodbye scenes. I'm a contracJob Security versus Uncertainty Perhaps the key benefit of permanent employmentis the sense of social and ecoit affords.On the face of it, nomic security forthe uncontractorstraded thissecurity certaintyof the market,a calculated risk or unavoidable at that seemed worthwhile the time contractorsmade their decision. With the benefitof hindsight,informants now viewed securityfrom two conflicting perspectives. Nearly a fifth(19%) of our that claimed without prompting informants theirsense enhanced had actually contracting of security(see Table 3, panel B). Those who articulatedthisview portrayedthe seas an illuofpermanentemployment curity was not about keeping ajob, sion. Security they claimed, but about how easily one could findanotherjob when one's current believed they job ended. These contractors and skillsthatenhad developed networks abled them to manage job loss as a matter of course. The resultwas an optimismthat
tor. I've got ajob. I've got ajob as long as I want one. That's happened a lot, and I don't know why. It may be that employees end up costing the companya lot more. It seems like whenever there's a downturn,whenever there's a layoff, management has an opportunityto get rid of the corporate deadwood with plausible deniability. Whereas, it's not an issue with a contractorbecause theycan make themgo away howit'spanned That's always theywant. anytime out forme. Stayas long as you want. You got to quit because theywon't kickyou out. (Software M, C36) developer, Our informants' depiction of contracting as secure had experiential confirmation: most had yet to experience significant "downtime," their term for periods between contacts. Nevertheless, at least 17 (Table 3, panel B) were still concerned with long-term security and believed that at some point they would face a prolonged period of downtime and its accompanying Although most financial difficulties. thought they could survive, and proved so by repeatedly choosing to remain in con-
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INDUSTRIAL AND LABOR RELATIONS REVIEW minimizingthe lack of security. The most common view was that the economic rewards of contracting,at least for the moment,outweighed the risk. Enhanced Income versus Hidden Costs Contractors readily agreed that money was contracting's primary advantage. Without prompting, 50% of the informants mentioned thatcontractinghad enhanced theirincome (see Table 3, panel C). Most estimated that they made 30-300% more than they had as permanent employees. Even those who were initiallyconcerned about makingends meet believed thatcontractinghad made them wealthier. Few envisionedreturning to permanentemployment, and manyhad already turned down one or more offers. A storytold by an embedded systems engineer was typical:
[Mymanager] said to me, "Everybody lovesyour withyou. So, we're going work,we like working to offer you $80,000 a yearand a $5,000 signing bonus and we mighttalk about stock options." And I go, "Well,Mark,gee that'sgreat." After a weekend I come back and he says, "Have you thoughtabout it?"And I say,"Yeah,Mark,that's a great offerbut, you know,by the time I take care of all mybenefits, vacation and everything thousand dollar differelse, there's stilla twenty ence between what I can make as a contractor and whatyou're offering me. I'd love to take it if I could, but it just doesn't make economic sense." (Embedded systems engineer, M, C41)
tracting,uncertaintylurked in the background. Contractors countered their doubts withthe argument,again grounded in their own experience, that risk diminished withexperience: "There is more risk. A contractcan be over today. But the more you stay in contracting the less scary it becomes. Those in it for 20 years would never be an employee" (Quality assurance, F, C13). Nevertheless,a thirdof the informantsconsidered latentuncertainty to be a downside of contracting,and half of these found it stressful:
Well, initiallyit was verystressful. Right now, I'm kindofrelaxed because I'm in the middle of a contract that's rather long and theywant to renew. But, many times during the year you have to thinkabout findingwork. You're always looking for work. They say it gets easier with time. Once you've developed, ifyourclientsare happy with you, they'll come back and refer work. But there's thatconstantstress. (Techni-
cal writer, F, C24)
Moreover, contractors discovered that the activitiesnecessaryfor minimizingunwere themselvesa disadvantage. certainty As 12% of our informants mentioned, searchingforjobs, maintaininga network, and keeping records took timeand energy:
You are lookingforajob every couple ofmonths. That is probably no different than a salesman who is out of ajob every morning-he has got to go create business every morning. But,still,you have to devote some of your time and some of yourenergyto findingwork,instead ofworking yourwork. So thatis a disadvantage. (Program-
mer, M, C48)
A surprisingly small number (8%) of our informants, however,feared thatfailingto find ajob would drain their savings,makto pay bills and make ends ing it difficult meet. Commentaryon the nature and meaning of securityand uncertainty was nearly ubiquitous in our informants'evaluations of contracting. All were aware of the risks associated withcontracting, and those who worriedabout uncertainty weremoreprevalent than those who did not (40% versus 19%). For the mostpart,however,contractors had discovered waysof redefiningor
Even contractors who factoreddowntime into their calculations concurred that the economics ofemployment favored contracting. In fact,no informants said theywere economicallyworse offthan theyhad been as full-time employees. One reason forthis was that theyhad experienced less downtime than they originally expected. Another was that unlike permanent employees, contractorswere paid for everyhour theyworked,usually at a rate higher than permanent employees performing comparable work. An outspoken programmer put it bluntly:
hours a week. They're askingme to workseventy And, you knowwhat? They're going to pay me forseventyhours a week. When theyask a full-

hours a week they're timeperson toworkseventy going to pay themwhatevertheirsalaryis. The person is sittingthere going, "Ugh." full-time I'm going, "Ching, ching, ching, ching." (ProF, C27) grammer, Yet, despite their insistence that they were economically better off as contractors, informants had come to realize that contracting entailed hidden costs. One cost, widely recognized in the literature and mentioned by 29% of our informants, was the burden of providing one's own benefits, especially pension funds and health insurance. Less widely appreciated outside contracting circles was the burden of maintaining one's expertise (mentioned by 21% of our informants). The direct costs of remaining up-to-date included fees for courses as well as the price of equipment, books, and software: You make a lot of mistakes,and you have to go, "Youjust blew fivethousand dollars on a piece away. Whoa!" of software thatyou're throwing out, that's hard Especiallywhen you're starting M, C12) to do. God! (Software developer, Other costs were indirect, as when contractors lowered their rates to secure contracts from which they hoped to learn new skills: When I moved fromthe old-not thatold, but legacy-skills to the newer,more popular skills, I had to lower myrate because obviouslyI was coming as a neophyte as opposed to someone who has several years of project experience. Mostly, customers want references for real projects as opposed to something that I did at home. So the learningofnew skillsas a contractor is a challenge. (Software developer, F, Cll) Some contractors (8%) said that higher taxes and different tax schedules were another hidden cost that reduced the monetary advantage of contracting: "I earn a little bit more than an employee. But let's get it straight: It may appear that I earn twice as much because I take home these huge checks, but half of it goes to the government. I have to pay my own taxes" M, Cl 7). Especially those (Technical writer, contractors who worked as independents (or 1099er's, as they are known in contracting circles) feared a tax audit and its subsequent penalties, since the IRS was thought
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to scrutinize independent contractors closely. Another hidden cost was the price of uncertaintyitself (21%). The potential of a contractor'sincome in the irregularity face of fixed expenses meant thatcontractorshad to thinkexplicitlyabout financial strategies for ameliorating uncertainty's impact: at turnsbad, and mycontract Say something Cisco is terminated.Now I have my$860-acar paymy $300-a-month monthmortgage, food bill, I don't know, ment. $300-a-month gas, electric, utilities, whatever else,youknow, as a water.... You learn to thinkdifferently M, C9) contractor. (Technical writer, managed the cost of At least one informant a buffer account bymaintaining uncertainty in thebank,and severalothersimplied that theyhad done the same. As this engineer (M, C19) put it, "The differencebetween being contractand being permanentis the amount of money I have in my savings account." Other contractorsspoke of delayingmajor purchases untiltheyhad saved enough to payfortheitemin cash. Married contractorsusually said theycould get by on their spouses' income, at least for a shortperiod of time. Finally,technical contractorsperceived the lack of stock options as a hidden cost. made more Although contractorstypically money than permanent employees, especiallyin the entrepreneurialclimate of the Silicon Valley,permanentemployeescould iftheirfirm went become wealthy overnight public and did well on the stockmarket.At least two of our informants were still troubledbymemoriesof lost opportunities to become wealthy: I turneddown a job at Netscape because I downajob I meanI turned tocontract. wanted fromNetscape the monthbeforethey offer went public! I decided not to apply when Vieweventhough movedto Mountain Grayson atthetime.That's I wasdoing Webdevelopment theone thathurts.Of courseI had no idea at thetimethatNetscapewasgoingto do that. I of thatwhen I start myself keep reminding M, developer, feelingreallystupid. (Software C21) Economic considerations were central
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INDUSTRIAL AND LABOR RELATIONS REVIEW demand undercut a contractor's marketability:

It is possible, as a contractor,to wind up doing small things. You know, the same pigeon-holing can happen to you as a contractor.Ifyou fail to educate yourself, you not onlyhave all of the entrepreneurial risks,but you have the same drawbacks as an employee and none of the
to the informants'initial decisions to contract,and most felt that they had reaped theeconomic benefitsthey sought,but they also understood that contracting's monetaryadvantage was reduced by costs they had not anticipated. As a result, informants gradually began to realize the full implications of having directlyentered a labor market. Like actors in any other market, they confronted the necessityof estimating,pricing,and managing uncertainty. To this reality they brought one crucial resource: theirprofessionalexpertise. The meaning of expertisein a market was the final theme thatmarked our informants' discourse on contracting. Professional Expertise as Skill versus Commodity Informants originally hoped contracting would allow themto focusmore intently on technicalworkand on developingnewskills, and 29% (see panel D of Table 3) volunteered that theyhad achieved theirobjective: I am really glad I becamea contractor, because it has givenme a chance to go all aroundthe Valleyand workfor all kindsof companies. Whenyou stayin the same field, you onlysee thatworld; youdon't get to see otherkindsof softthings.I did a contract testing encryption warefora bank. I wouldhaveneverdone that. I meanI wouldnothavegonetoa bankandsaid, "Can I test I didn't software?" yourencryption evenknow itexisted.So I gotlotsofopportunitiesbydoingthat. (Quality assurance, F, C13) of the contracFurthermore, nearlya fifth tors (19%) claimed that their skills had brought them considerable influence and respect in the client companies where they worked. The realities of developing and maintainingexpertise,however, weresometimes sobering. Contractingdid not guarantee or challenging work. Once ininteresting formantsbegan contracting,they quickly discovered that exercising skill was no a matterofbeing knowledgelonger simply able; skilland reputationforskillwere the coinage by which others measured their value in the marketplace. Failing to keep currentand demonstrateskillsthatwere in
benefits.(Software developer, M, C39)
Once contractors recognized that remaining on the "cutting-edge" was crucial for maintaining employability,learning became an issue of survivaland not simply a means of gettingajob done or a route to personal satisfactionand growth. At least 17% of our informants portrayedthe continual need to retool as a cost of contracting. Furthermore,contractorsdiscovered that it was ultimatelycustomers who definedwhattheyneeded to learn. The need to stayabreast of technologycould become tedious and mighteven lead contractorsto consider returning to full-timeemployment:
The competition is getting a little stiffer because the application packages that a writer needs to know are gettingmore complicated, more complex, more work intensive. And so, you have to keep up withit. At 45, I'm getting a littletiredofplayingthatratrace, whichis why I'm at Cisco, because Cisco wantsto bringme on board direct. I would just as soon focus on the networkengineering side of technologyand on working my way into a management position than continue this. (Technicalwriter, M, C9)
In time, contractors realized that the meaning of expertise had been transformed. To be an expert was no longer simply to possess sophisticated skills and knowledge. One had to possess skillsthat were marketable. A fewcontractors(6%) even lamented that one result of selling expertise was doing highlyskilled but monotonous workwithina specialized niche. In short,experienced contractorscame to whose understandexpertiseas a commodity maintenance could be costly. Ironically, many had become contractors precisely because theywanted to distance theirprofessional selves from the irrationalitiesof organizational life,yetmost eventuallydis-
WHY DO CONTRACTORS CONTRACT? covered thattheirprofessionalism was now subject to marketforces, whichcould be no less corrosive. Discussion and Implications As ethnographers, our objectivehas been to document technical contractors' accounts of their experiences with contracting and to use these as a lens forevaluating conceptions of contingent work and for building more valid theoriesof contingent labor markets.Our data are informative on three counts. First, they help us understandwhy currentimages oftheexperience ofcontingentwork are oversimplified. Second, they pointto thepreviously overlooked role that occupational communities and communities of practice may play in contingentlabor markets. Finally,theyraise questions about our notions of how contingent labor markets are structured. Consider each implication in turn. Adequacy of Current Images of Contingent Work Most research on contingent work beginsbypositinga contrastbetweenemployment in bureaucracies and employmentin markets and then,at least implicitly, chamover the other. Employpions one system ment relations scholars highlightthe advantages of bureaucratic employmentand the disadvantagesof contractlabor. They warn that contingentemploymentexacerbates economic insecurity by lowering wages, abetting discrimination,eliminating access to benefits, underminingopportunities for collective action, and, ultimately,exposing people more directlyto the whimsof employersand the ravages of economic cycles. Advocatesoffreeagency, on the other hand, enumerate the constraints and injustices of organizational and extol thevirtuesofselling employment one's skills on theopen market.Free agents, theyclaim, have more autonomy,accumulate more wealth,and enjoy a more holistic thanemployeeswho are trappedin lifestyle the webs of bureaucracy. Our data, howare ever, suggestthatboth interpretations inadequate.
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For those who live it, a life of technical contractingappears neither as grimas the proponents of the employmentrelations' perspectivefearnor as rosyas the advocates of free agency promise. Viewing the technical contractors'world throughtheirown eyes suggestshow inadvisable it maybe for employmentrelations scholars to assume that contingentwork alwaysexacts the social and economic costs associated with low-skilled, temporary labor. The contractorswe encountered were not forced into lower-paying,less secure jobs than they desired. In fact,mostfound contractingto be more lucrativethan permanentemploysaw it as more ment,and a sizable minority preferred secure. Our informants generally contracting and consciously accepted its risksin hope of makingmore moneywhile escaping the constraintsof organizational life. This is not to say that the economic pressuresthatworry employmentrelations forhighly skilled proponentsare irrelevant contractors. A significant number of technical contractorsturned to contractingafter having been laid off or because they anticipated losing theirjob. Yet, even in these cases, because demand fortheirskills was so great,most could have pursued permanent employmenthad theyso desired. That theydid not attestsnot onlyto technical contracting'seconomic potentialbut to important social-cultural considerations. The contractors with whomwe spokeviewed organizational employment through the and found it lens of a professionalidentity wanting. They aspired to obtain workthat would enable and reward their effortsto develop and exercise expertise. Many sought independence and greater control over their environment. The majority claimed to have found it. It is importantto note, however,thatour studytook place during one of the tightest labor marketsin recent American history. Whether technical contractorswould report similar experiences at another time remains an open question. Furthermore, because we have no data on technical experts who left contracting,it may be that some technical contractors have experi-
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INDUSTRIAL AND LABOR RELATIONS REVIEW low- and high-skilledcontractors experience being an outsider, their experiences flavors: the may have somewhat different former are oftenignoredor disdained,while the latter frequentlyexperience admiration and respect. This is not to say that there are no similarities in contingent employment across occupational strata. Like other temporary about technical contractors worry workers, and lack experience uncertainty, downtime, a sense of community. Although differences betweenoccupational groupsremain a matter for furtherresearch, this study suggests that these differencesshape the waypeople experience contingentemployment and that it is unrealistic to assume could in itself thatcontingentemployment level such differences. The Importance of Occupational Communities Our ability to offer a full theoretical account of contingentemploymentmaybe hampered by confining our conceptualization of its social context to organizationsand markets. Organizations and free markets are but two ways of structuring employmentrelations. As has long been understood in the case of the professions and crafts, occupational communitiesare a third (Van Maanen and Barley 1984). In their most developed form,occupational communitiescertify expertise,broker emset wages, and create barriersto ployment, entry. Occupational identitieswere extremely we importantforthe technical contractors studied. Theyviewed themselvesas professionals and introduced themselvesto others using occupational terms. Many spoke itwas to be a professionalin ofhow difficult a bureaucratic setting. But just as professional expertiseco-existeduneasilyin organizational milieus, so professionalismwas not entirelyconsistentwitha free market. storiesofcontracting were, The informants' in part, tales of how they discovered the of being professionalsin an open difficulty market. Although the market for technical ex-
ences more like those anticipated by the employmentrelations perspective. Even withthese caveats,our informants' glance, appear experiences might,at first to be more consistentwith the free agent perspective. On closer inspection, however, the free agent perspective seems as partial as the employmentrelations view. Independence, security,income, and expertise had their dark side: a sense of estrangementand insecurity,the burden ofbeing financially responsibleforoneself, and, most important,the realization that whose value was expertisewas a commodity determined by market dynamics. Free agency's notion that contractors participate in a marketunencumbered byorganizations is also misleading. Not onlydid all have to meet the needs of their contractors clients,but most were forced by their circumstances or by their clients to work agencies thatbecame their throughstaffing legal employersfor the duration of a contract. Thus, it appears thatcommon images of contingent employment are simplistic in seem to experitwoways. First, contractors ence their situation more complexly than most research acknowledges. To capture work thiscomplexity, scholarsofcontingent must set their assumptions aside and turn to data on the perspectivesand behaviors of contingent workers. They should attempt to understand both the advantages and disadvantagesof contingentworkand how these are grounded in the specific conditions thatworkersface. Second, because technical contractors' tales of work contradictprevailingimages oftemporary underscore they employment, the danger of building a theoryof contingent labor by generalizing from data on one type of occupation to all others. A comparison of our findingswith existing accounts suggests that the experience of jobs contracting in low- and high-skilled differssignificantly. Specifically,the nothan is more lucrative tionsthatcontracting permanent employmentand that employappear to have abilityis a formof security no parallel in the experience of low-skilled workers. Moreover,while both temporary
WHY DO CONTRACTORS pertiseapparently satisfied thecontractors' desire to be recognized and paid for their skill,itunderminedotheraspectsofprofessional life thatwere more easily addressed when they were permanent employees. Organizations often employ numerous members of the same technical specialty. For thisreason, they offer technicalspecialists a local communityof practice (Lave and Wenger 1990), supportmembershipin professional associations, and subsidize professional training and development. Because permanent employmentis more stable than contingentemployment,even in an age of downsizingit shields technical professionals from experiencing the full bruntof the marketforexpertise,thereby moderating the threatof obsolescence. As technical contractors, our informants rapidly learned that their expertise was a whose utility was definedbythe commodity clients'willingnessto payfortheirservices. forand costs of remainThe responsibility ing marketable and technicallyup-to-date now rested on the contractors'shoulders. To enhance their skills, contractors required access to the technicalcommunities where technical knowledge resides. To findappropriatejobs, theyhad to interact with people who were aware of potential clients and who appreciated the details of technologyand technical work. To counteract the sense of being outsiders, they needed a communityindependent of the organizations in which theyworked. For these purposes, the marketwas no substitute foran employingorganization. Technical contractors attemptedto meet these professionalneeds througha variety of mechanisms, the most ubiquitous of which was the cultivationof personal networkscomprisedoffriends, colleagues, and acquaintances who could provide technical informationand informationon jobs. Although the contractors' networks included recruiters,permanent employees, and managers, a significant proportion of in the theircontactswere othercontractors same technical specialty with whom they In short, exchanged technicalinformation. many contractorshad begun to construct networks that resembled occupationally
CONTRACT?
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orientedcommunitiesofpracticeto handle theirprofessionalneeds. Some soughtto augmentand strengthen such networks by affiliating withmore formallystructuredcommunities. Some contractors belong to professionalassociations and, even more commonly, to "users' groups" that offered technical training, on job opporsocializing,and information tunities. Several contractorsallied themselveswithstaffing firms thatwere occupationallyhomogeneous. One was structured as a collective that provided its members with training,business services, and benefits. Another specialized in outsourcing The firm Unix systems administrators. supit had organized by ported the community providing bulletin boards, online chatrooms,and Web-based referencematerials that systemsadministratorscould access when theyneeded technical assistance. These developmentsrepresenttheemergence of occupation affiliations and protooccupational communitiesin the midstofa contract labor market.Theyservedto shield contractors from the isolation, insecurities,and costs of participatingas lone individuals in a market for expertise. They enabled technical contractorsnot only to address professionalissues but also to share experiences,concerns,and interpretations of contingent employment. To put this another way,among technical contractors therewas evidence thatoccupational awareness had begun to bridge the gulfbetween bureaucracyand market. The Structure of Contingent Labor Markets Our data suggest two other modifications of how we should envision the structure of contingentlabor markets. Historically, the employmentrelations literature has conflated the distinctionbetween priwiththe maryand secondarylabor markets distinction between the stable core and unstableperipheralsectorsoftheeconomy. Because oftheimpermanentnatureofconlabor markets have tingent work, contingent been viewed as secondary. Yet, technical contractorsapparently experience few of
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the vicissitudesof a secondary labor mar- participate in the structuraldynamics of are notpoorlytrained contingent employment. Internet-based ket: forinstance,they job banks and resume services (such as or rewarded,nor do theyappear to lead a hand-to-mouthexistence. Consequently, DICE) are particularlyimportant. Conpost theirresumesto these services tractors the image of contingentemploymentas a and consult them forjob announcements, formof secondary employmentseems unfirmsoften rely on them to and staffing warranted. If we accept the view that less candidates. Users' groups,proidentifyjob oftendo experiskilledcontingentworkers of secondaryemploy- fessional associations, and, in some cases ence the tribulations (technical writers),even unions also influment, then it might be more accurate to argue that like bureaucratic employment, ence the dynamicsof contingent employment in technical fields. Sorelyneeded to contingentemploymentseems to have its leaven the discourse on free agency are own primaryand secondary sectors, and studies thattake seriouslythe triadicstrucin dynamicsbetween them the differences are as pronounced and sociallysignificant tureof labor marketsand thatexamine the role of other actors in making them operbetween permanentand as the differences ate. If forno other reason, the notion of a contingentemploymentitself. Furthermore,it may be even more mis- dyadic contingentlabor marketis a fiction on jobs and job seekbecause information leading to employsimple marketimages of how contingentemploymentis structured. ers is neitherfree nor evenlydistributed. Whether or not the economy will be Discourse on contingent employmentofmarkedbygreateruse of contingentlabor, ten envisionsa simple, dyadic relationship we stillhave much to learn about contractbetween the individual who sells and the firmthatbuyslabor. Except in the special ing as a social phenomenon and an economic phenomenon. By describing the case of independent contractors, this is inaccurate. At minimum,mostcontingent point of viewof highlyskilled contractors, we have triedto show not onlywhere existlabor marketsare triadicin structure. Between the buyer and the seller lies a third ing theories of contingent work are limfirmthat brokers ited, but that contingent employment is party,usually a staffing market informationand matches workers more diverse than is often thought. Concut of tingentworkis an area where new employto clients in returnfor a significant ment practices and ideologies are being the contractor's hourly rate. Yet, most are to adequately discussions of contingent labor markets forged. If policy-makers ignore or underplaythe role of the staffing address these developments, theywill require more nuanced images of how people firms,and there are almost no studies of experience contingentworkand how conhow they operate (but see Peck and tingent labor markets are actually strucTheodore 1998). Moreover,at least in the tured. We offerthis studyas but a step in world of technical contracting,a number this direction. of other social entities contribute to and

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Why Do Contractors Contract?

WHY DO CONTRACTORS CONTRACT? THE EXPERIENCE OF HIGHLY SKILLED TECHNICAL PROFESSIONALS

IN A CONTINGENT LABOR MARKET

insticentury, For mostof thetwentieth

to each other there's so much tension going on.

INDUSTRIAL AND LABOR RELATIONS REVIEW

There's no compensation for engineers. I had

WHY DO CONTRACTORS CONTRACT?

AND LABOR RELATIONS

Table 2. Themes in Contractors'Accounts of Entering Contracting.

WHY DO CONTRACTORS CONTRACT?

INDUSTRIAL AND LABOR RELATIONS REVIEW

WHY DO CONTRACTORS CONTRACT?

Table3. Themes in Informants'Accounts of Their Experience as Contractors.

INDUSTRIAL AND LABOR RELATIONS REVIEW

WHY DO CONTRACTORS CONTRACT?

cal writer, F, C24)

WHY DO CONTRACTORS CONTRACT?

INDUSTRIAL AND LABOR RELATIONS REVIEW demand undercut a contractor's marketability:

benefits.(Software developer, M, C39)

INDUSTRIAL AND LABOR RELATIONS REVIEW

WHY DO CONTRACTORS CONTRACT?

INDUSTRIAL AND LABOR RELATIONS REVIEW

WHY DO CONTRACTORS CONTRACT?

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