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Contractors in the Workplace


... scope of work, what to expect. Here are the individuals with whom you have to work. ... We work with them to establish a time line, and then we hold them to it. ... – PowerPoint PPT presentation

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Title: Contractors in the Workplace

Contractors in the Workplace
  • Stephen R. Barley
  • Management Science and Engineering
  • Center for Work, Technology and Organization
  • Stanford University

Informants Characteristics
Why do Firms Hire Contractors
  • Reduce Indirect Labor Costs
  • No employment taxes
  • No health insurance or pension payments
  • Escape costs of recruiting, training and
    terminating employees
  • Lower infrastructural costs.
  • Flexibility in the face of an uncertain market
  • Wages
  • Numerical
  • Functional
  • Acquire Skills that Firm Lacks
  • Inflate productivity figures and firms
  • Salvage projects in crisis
  • Screening
  • Do work that permanent employees dont want to do

Extent of Use
  • 70-80 of U. S. Firms use some form of contingent
    labor, including part time workers.
  • 45 made use of staffing agencies and 44
    independent contractors.
  • In 2000, 45 used IT contractors.
  • Industries in which our contractors had worked
    hardware, software, banks, retailers, railroads,
    universities, automobile manufacturers, aerospace
    firms, hospitals, biotech firms, defense
    contractors, non-profits, household goods, state
    government, federal government.

Types of Contractors
  • Independent contractors usually incorporated
  • W2s -- placed through staffing agencies which
    serve as an employer-of-record.

Roles Contractors Play
  • Gurus acknowledged experts in their fields.
  • Hired guns highly skilled workers brought it to
    do key tasks.
  • Warm bodies extra labor, may do tasks that
    employees dont want to do.

  • Dynamics of commodification and differentiation
  • Dynamics of integration and expertise
  • How contractors were perceived and treated
  • How contractors managed the situation

Managing Contractors as Commodities
  • Limit involvement to directing task performance.
  • Abdicate other managerial responsibilities to
    staffing agencies.
  • Take practical and symbolic steps to limit
    trappings of membership in the firm.

  • I say, Heres the scope of work, what to
    expect. Here are the individuals with whom you
    have to work. Heres the training--knowledge
    transfer--that I expect to take place. These are
    the team meetings that are going to occur, the
    notes that are going to be published, the
    documentation thats required, and then disappear
    in two months when were satisfied.

  • If you have a performance problem with a
    full-time engineer, you've got to protect
    yourself legally. So you go through a lot of
    steps to give the engineer every possible chance
    to succeed. You have a talk with them. Send them
    e-mail if the problem persists. Have another
    talk with them and try to agree on specific goals
    that they can achieve in a short time frame. If
    things get really bad, you can put them on
    something called a performance plan and after a
    period of time they have to show concrete
    progress thats documented in HR. Only then you
    can begin the process of firing them. With
    contractors you generally dont do all that.
    Its pretty clear from the start what the
    contract is about, so they've already got a list
    of concrete goals. If it's not working out
    youll talk with them, but over a much more
    compressed period of time. If it doesn't work in
    weeks, they can be gone.

Ways of Differentiating Contractors
  • Distinctive ID badges
  • Space
  • Restricting attendance at events
  • Withhold t-shirts, marketing collateral and gifts
  • Deny passwords
  • Require self-identifying voice mail and email
  • Require contractors to work at night
  • Require guards to accompany contractors to

Walking the Fine Line
  • Managing and integrating are two separate issues.
    One is easy the other is hard. Managing is
    easy because we give these guys (QA contractors)
    a very discrete list of things that we want them
    to do. We work with them to establish a time
    line, and then we hold them to it. And that
    makes it pretty easy to manage, right? (He
    smiled ironically.) Integration into the team is
    a little more problematic because I have to be
    very careful to not include them in the employee
    perks sort of stuff that we do. I really try to
    maintain a clean separation, at that level,
    between the regular employees and the contractor.
    On the other hand, they have to work closely
    with the engineering team because they have to
    ask the right questions to get the job done.
    They have to interact with their fellow QA peers.
    So there's an interesting tension there.

Ways to Integrate
  • Locate contractors near permanent employees
  • Visit contractors
  • Hold impromptu team parties.
  • Circumvent policies
  • Ignore Policies

  • Frankly, in many ways contractors are sometimes
    better than permanent employees, just because you
    have the right skill set. Theyre better
    trained. They are focused on the job because they
    don't have to worry about anything else. But
    theres a downside. We're getting in the mode of
    having them come in and build new things and when
    the contract is up and they walk out the door,
    the people who have to maintain it have no idea
    what the code looks like.

ExtensionThe response to dependence
  • The pro of contracting is people want you. You
    know, youre not being abused because they really
    want you there. Theyre behind they need your
    expertise. The people they have cant do your
    work. For instance, you know, Im at Motorola.
    I had a six-month contract that was up in
    January, and Im still there. Theyre laying off
    15,000 people, but Im still there. The reason
    Im still there is because they cant find people
    inside that can do the work I can do.
    (Verification Engineer

Extension Response to Dependence
  • At Seamax the original contract was for 10 days.
    They were a very small companyhad 30 employees.
    They told me they only had enough money to pay
    me for 10 days. Presidents of that company have
    come and gone. Department heads have come and
    gone. The ownership of the company has come and
    gone. Even the companys name has changed. Im
    like the guy at the post office. No matter who
    gets elected to Congress, I still deliver your
    mail. In fact, the guy that hired me was VP of
    their internal operations. He brought me in and
    told me, We dont have a lot of money. If you
    cant do it in 10 days, tell me now. A year
    later he left the company. I was still there. A
    year after he left, he stopped by, he walked in
    the door, and when he saw me he said, What the
    hell are you doing here? Same thing. Hes
    been back twice in the last two years and Ive
    been there both times. They now have 800
    employees. Therere only 24 that have been there
    longer than I have. (Software Developer)

Tales of Respect
  • Becoming an Advisor and Confidant
  • Being asked to go perm
  • Being made a lead.

Tales of Resentment
  • Lack of Commitment
  • Inequity

Forming an Identity
  • How will I approach the work?
  • How will I approach relationship?
  • How will I present myself to myself and others?