While clerical work accounted for 43 percent of temporary employment in 1994, the largest increase in "temp" work that year had nothing to do with secretaries, administrators, assistants, or file clerks. The big numbers occurred in the professional and technical ranks among accountants, attorneys, general managers, engineers, scientists, and computer programmers.

A 1995 U.S. Department of Labor survey reported that 6.7 percent of the work force -- more than 8 million people -- worked as independent contractors. And the trend has continued to this day. Does this swell of white-collar free agents in the work force suggest a profound shift in the way work is organized, and if so, what are its implications for firms, individuals, and society?

	People are emerging as bundles of skills

HBS assistant professor Jeffrey Bradach first asked himself these questions in 1996, when, in the midst of pursuing research on franchising, he noticed a preponderance of independent contractors performing critical work for companies. Curious as to how these people fit into their organizations, he designed a study to find out. Interviewing 26 contractors, 17 corporate clients, and 4 staffing agencies that had brought the two groups together, Bradach discovered a new, highly flexible model of work that is helping corporate managers meet their needs even as it provides individuals with the flexibility they want or require to build a satisfying career. In his recent HBS working paper, "Flexibility: The New Social Contract between Individuals and Firms?," Bradach describes his findings, concluding that "an increasingly turbulent economic environment has led to fundamental changes in the rhythms of work and the shape of organizations."

While the past decade's massive wave of corporate downsizings offers one obvious cause for the presence of so many "unattached" professionals in the work force, Bradach observes, he was intrigued to find that the contract workers in his study were, on the whole, satisfied with their independent status. "They were not just running away from corporate America," he writes. "They were also running toward a way of working that they found appealing."

Staffing at AT&T: A Case in Point One example of just how resourceful the contract worker movement has become, Jeffrey Bradach points out, is Resource Link, AT&T's in-house temporary-assignment agency established in 1991 to supply managers and technical workers to the company's 26 business units. Unlike a traditional staffing agency, Resource Link (the subject of a 1996 HBS case written under Bradach's supervision) does not charge markup fees beyond its own costs, and it pays salaries and benefits to its "associates," more than nine hundred regular AT&T professionals who work on three-, six-, or twelve-month contracts. As described in the case, "the combination of frequent assignments, performance reviews, and targeted training led many staff to believe that managers who stayed with Resource Link developed into high performers." Compared with traditional AT&T managers, Resource Link associates "tended to have a greater degree of clarity about their job requirements and perceived a higher level of support for accomplishing job objectives." At the same time, however, they "indicated that they had a higher uncertainty about employment security" -- unlike many of the other independent contractors in Bradach's research, who said they felt more secure as temps than they had as full-time corporate employees. The growth of staffing agencies -- be they independent of firms or operated within them -- is intriguing, Bradach says, "because it points to the possibility that a new set of institutions may be arising that will help people develop their careers." Organizations, too, may ultimately benefit.

Separating the contractors (14 women and 12 men who, for the most part, had had prior corporate experience) into three categories -- committed, transitional, and part-time -- Bradach discovered different motivations for each. Committed contractors tended to view themselves as career outside experts. Indeed, these individuals enjoyed their sense of autonomy and accomplishment and expressed deep satisfaction with the variety of their temporary assignments, with their generally well-defined projects, and with their satisfactory financial remuneration. Transitional contractors, on the other hand, worked on temporary assignments to pay expenses while seeking full-time employment, whereas part-time contractors encompassed a range of people, from those who "temped" after retirement to those who required flexibility to remain committed to an avocation.

Among the committed and part-time contractors, the two groups that tended to view independence as a long-term proposition, Bradach noticed an intriguing paradox: "Many of the attributes that management experts strive for inside organizations -- a performance-oriented culture, a minimum of office politics, and the intrinsic motivation of workers -- seem to be attainable through contractors."

Furthermore, he writes, contractors often work on activities that are central to the organization's success, pointing out that his subjects had led important projects involving marketing, human resources, quality development, and new ventures. These findings, Bradach says, challenge the traditional notion of employees as "core" workers who conduct the organization's key activities and contractors as "secondary" workers who perform less critical tasks. "I thought I was studying contractors," Bradach adds, "but I quickly discovered that I was also learning a lot about the new nature of organizations."

The firms in Bradach's study reported many reasons for using outside contractors, among them the need to rapidly access skills to meet new opportunities or competitive pressures (managers claimed they could often find a qualified contractor more quickly than they could a full-time employee); requirements for specific skills not available inside the firm; the limitations of in-house bureaucratic human resource practices; and the desire to have work done on a transaction basis (attractive for its variable- versus fixed-cost advantage, as well as its elimination of performance review issues).

Finally, Bradach found that the country's more than six thousand staffing agencies -- a number that has more than doubled over the past decade -- are contributing significantly to the rapid development of the contractor/client market by providing individuals with easier access to opportunities (which makes contracting a less risky way to build a career) and by easing firms' accessibility to talent and ensuring its quality. Bradach points to the continued growth of staffing agencies as an indication that "we may be witnessing a slow recasting of the institutional matrix of the economy." Within this shift, he writes, "people are emerging as bundles of skills; organizations as constellations of projects; and agencies as brokers, certifiers, and developers of talent." While not a necessary component of the contractor/client relationship, he adds, staffing firms "add an element of stability and predictability to both organizations and individuals."

Although his study lays a solid foundation for further research, Bradach cautions against drawing broad generalizations from its small sample group, especially since only successful individuals and situations were chosen to participate. "I wanted to understand how the flexibility model worked before determining who the winners and losers are," Bradach explains. He quickly adds that the emergence of this model raises fundamental questions about how work and society are organized: "Is it simply a new model of exploitation and de-skilling that has moved from the periphery of organizations to their core," he asks, "or, with the growth of agencies in particular, is the institutional landscape changing in ways that make contract work a more viable way to build a satisfying career and get an organization's work done?" Time -- and additional research -- will tell.

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