Do Peripheral Workers Do Peripheral Work? Comparing the Use of Highly Skilled Contractors and Regular Employees

This paper uses data from a 2002 survey of project managers in a large, U.S.-based financial services institution to compare how contractors and regular employees were assigned to work within an information technology department. The author uses these data to test standard core-periphery arguments about the use of contingent workers, as well as accounts of contingent work that emphasize the interests of frontline managers. He finds that contractors and employees were used very similarly in most respects, although there were some differences. Contractors were less likely to be used in roles that were more critical to the firm, but more likely to be used when frontline managers' interests could conflict with the organization's. Contractors were also less likely to be given positions requiring knowledge of the business. No evidence is found, however, that other kinds of firm-specific skills affected how contractors were used.