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Gurus, Hired Guns, and Warm Bodies

Gurus, Hired Guns, and Warm Bodies: Itinerant Experts in a Knowledge Economy

Stephen R. Barley
Gideon Kunda
Copyright Date: 2004
Pages: 352
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  • Book Info
    Gurus, Hired Guns, and Warm Bodies
    Book Description:

    Over the last several decades, employers have increasingly replaced permanent employees with temporary workers and independent contractors to cut labor costs and enhance flexibility. Although commentators have focused largely on low-wage temporary work, the use of skilled contractors has also grown exponentially, especially in high-technology areas. Yet almost nothing is known about contracting or about the people who do it. This book seeks to break the silence.

    Gurus, Hired Guns, and Warm Bodiestells the story of how the market for temporary professionals operates from the perspective of the contractors who do the work, the managers who employ them, the permanent employees who work beside them, and the staffing agencies who broker deals. Based on a year of field work in three staffing agencies, life histories with over seventy contractors and studies of workers in some of America's best known firms, the book dismantles the myths of temporary employment and offers instead a grounded description of how contracting works.

    Engagingly written, it goes beyond rhetoric to examine why contractors leave permanent employment, why managers hire them, and how staffing agencies operate. Barley and Kunda paint a richly layered portrait of contract professionals. Readers learn how contractors find jobs, how agents negotiate, and what it is like to shoulder the risks of managing one's own "employability."

    The authors illustrate how the reality of flexibility often differs substantially from its promise. Viewing the knowledge economy in terms of organizations and markets is not enough, Barley and Kunda conclude. Rather, occupational communities and networks of skilled experts are what grease the skids of the high-tech, "matrix economy" where firms become way stations in the flow of expertise.

    eISBN: 978-1-4008-4127-1
    Subjects: Business, Management & Organizational Behavior

Table of Contents

  1. Front Matter
    (pp. i-iv)
  2. Table of Contents
    (pp. v-viii)
    (pp. ix-x)
  4. Chapter 1 UNLIKELY REBELS
    (pp. 1-32)

    Clothed in a light blue T-shirt and chinos, Kent Cox revealed nothing to suggest that he was in the vanguard of an employment revolt that was spreading quietly across America’s industrial landscape.¹ Kent had no obvious tattoos or piercings. He carried no union card. He was not out to change the world. His passions were for code, ballroom dancing, and science fiction, not for politics—especially not for politics of the organizational sort. His short, dusty blond hair was only slightly rumpled, and his wire-rims suggested nothing more than intelligence. Had you seen him that day sitting across from us...

  5. Part I: Setting the Stage

    • [Part I Introduction]
      (pp. 35-36)

      In Act 2, scene 7 ofAs You Like It, Shakespeare observed, “All the world’s a stage / And all the men and women merely players.” Most sociologists would argue that Shakespeare generally had the right idea, but he took too much poetic license to be sociologically accurate. The world is not one stage, nor is it even one world. Instead, social life is a collection of stages, or social worlds, each with its own cast of characters who repeatedly retell a loose but identifiable story by improvising around a set of motives, props, backdrops and stage directions.¹

      Social life...

    • Chapter 2 CLIENTS
      (pp. 37-52)

      Although researchers have yet to reliably estimate the number of firms that employ technical contractors, we know that between 70 percent and 80 percent of companies in the United States use some type of contingent labor, including part-time workers.¹ In 1996, the Upjohn Institute estimated that 45 percent of American firms made some use of staffing agencies and that 44 percent employed independent contractors.² Using a different data set, Kalleberg and Reynolds (1998) estimated that in the same year, 57 percent of American firms used an “employment intermediary” and that 34 percent hired independent contractors.³ Most relevant for our purposes,...

    • Chapter 3 CONTRACTORS
      (pp. 53-72)

      The central characters around which the social world of contracting revolved were the contractors themselves. As table 3.1 reports, the contractors we interviewed worked in a variety of engineering or information technology–oriented occupations, although 41 percent were software developers or programmers. Most of our informants were men and women who had previously worked as permanent employees. Although a few entered contracting after working in permanent positions for only a year or two, the majority had worked full-time for at least five years, and many had been employees for over fifteen years before becoming contractors. The exceptions were the UNIX...

    • Chapter 4 AGENCIES
      (pp. 73-92)

      Staffing agencies were the third set of actors central to the world of technical contracting. Agencies brokered the market: they compiled information on job openings as well as information on contractors who desired jobs, they negotiated matches, closed deals, and in most cases, acted as the contractors’ employer-of-record. In return for their efforts, agencies charged clients a “margin,” or a “markup,” which they attached to the “pay rate”—the hourly wage that the contractor actually received. Markups worked as follows: if a contractor’s pay rate was $80 per hour and the agency’s markup was 35 percent ($28), then the “bill...

  6. Part II: Life in the Market

    • [Part II Introduction]
      (pp. 95-97)

      In chapter 3 we learned that most technical contractors chose to forgo the comforts of permanent employment to avoid the travails of working for an organization. They preferred instead to subject their skills and expertise to the discipline of the market—an institution often said to be objective and fair, but just as often reviled as cruel and exploitative. Regardless of which perspective contractors took (and most voiced both at one time or another), it was to the market that they periodically returned as the contract cycle turned, and it was through the market that they strung together the stints...

      (pp. 98-135)

      In 2001 George Ackerlof, Joseph Stiglitz, and Michael Spence received the Nobel Prize in economics for their groundbreaking work in the 1970s on information asymmetries in markets. Among economists, whose models of behavior often favor elegance and parsimony over realism, the trio’s claims were indeed revolutionary. Each argued that economics’ tradition of assuming that buyers and sellers have equal access to information was unwarranted. In many markets, either the buyer or the seller has better information than the other. Ackerlof’s, Stiglitz’s, and Spence’s contribution was to show that who knows what—and how and when they learn it—significantly shapes...

    • Chapter 6 MAKING THE DEAL
      (pp. 136-172)

      Sooner or later in the course of every foray into the market, all parties shifted from finding to negotiating and closing deals. Although the transition to deal making was gradual, it escalated as hiring managers began to evaluate and interview candidates. It was then that managers and contractors were finally able to assess how well they had fared in the latest round of the information game. Interviews allowed contractors and managers to decide whether they wanted to advance toward signing a contract or retreat back into the market. The tone of the evaluation and the path along which subsequent events...

  7. Part III: Life on the Job

    • [Part III Introduction]
      (pp. 175-176)

      Katrina Labovski, a young technical writer with a degree in English literature, sounded like an existentialist when she described her decision to become a contractor: “I knew that [it] would require some courage and a leap of faith because contracting is, you know, unstable by its nature.” The instability of which Katrina spoke went beyond the risk of not being able to find a steady stream of contracts and its potential to devastate her cash flow, although these possibilities concerned her. It went beyond even the uncertainty of not knowing what she would be doing or for whom she would...

      (pp. 177-187)

      “I really do see contractors as a commodity,” said Neva Boyd, an IT manager at Chipco, matter-of-factly. “For me, it doesn’t matter if it’s Person A who’s producing the product or Person B who’s producing that product. It doesn’t really matter, as long as I get the work done.” Neva’s perspective on the contractors she employed was widely shared by the managers we interviewed. Although managers’ reasons for hiring contractors varied, their view of how contractors fit into their company’s social system sounded remarkably similar. Like Neva, these managers routinely referred to the contractors they hired as “skill sets,” “resources,”...

      (pp. 188-198)

      Efforts to manage contractors as if they were commodities originated with and were shaped by senior management. With the help of lawyers, staff, consultants, and the managerial press, top management formulated policies on how to treat contractors that clearly distinguished them from permanent employees. Once these policies were in place, however, senior managers turned their attention elsewhere, leaving implementation to the hiring managers who actually used the contractors’ services. Hiring managers, for the most part, shared senior managers’ view of contractors as commodities, found the focus on task performance convenient, and accepted the need to enforce distinctions between employees and...

      (pp. 199-218)

      The gap between managerial rhetoric and corporate policies and the hiring managers’ informal practices sent contradictory messages about the contractor’s status. On one hand, firms went to great lengths to signal that contractors were outsiders; on the other hand, contractors could become quite integral to the firm’s operations. These contradictory messages left contractors to make sense of their status by sifting through the signs and signals they received daily from managers and employees as they went about their work.

      The contradictory signals that contractors received were reflected in the stories contractors, managers, and employees told about how fulltimers treated the...

  8. Part IV: Living the Cycle

    • [Part IV Introduction]
      (pp. 221-222)

      The decision to become a contractor and the rhetoric surrounding the lifestyle was often tinged with romanticism. As we saw in chapter 1, this was particularly true in the new media where free agency was heralded as an antidote to the shackles of corporate life and a prescription for individual freedom. Although our informants were hardly revolutionaries, by choosing to contract most set out, like Poor Richard, with the hope of finding the American Dream. They sought not only a fair market value for their skills, but also, as they repeatedly told us, the rewards of autonomy and self-reliance. They...

    • Chapter 10 TEMPORAL CAPITAL
      (pp. 223-243)

      Since the dawn of the industrial era, employers and employees have struggled over who shall control how much of a worker’s time.¹ Industrialization separated the workplace from the home for the first time in history. The spatial distinction, in turn, created a temporal trade-off between work and the rest of life: hours spent at work were hours not spent at home or play, and vice versa. Sharp boundaries between work and life were drawn first by ringing a bell or sounding a whistle, and later by punching a “time clock.” During the nineteenth and early twentieth centuries, management and labor...

      (pp. 244-263)

      Brian Willingham had a theory of technological obsolescence that would have made a labor economist proud. He claimed that the value of knowing a programming language or application was a concave function of time that, in the end, crashed suddenly. When a language or application first attracts attention, Brian claimed, those who can write the code or use the application can demand high wages because their skill is rare. But as the technology becomes popular and more people become skilled in its use, wages decline. Wages decline even further when users begin to migrate to the technology’s successor. At some...

      (pp. 264-284)

      Although continually augmenting one’s human capital was necessary for ensuring steady employment, by itself it was insufficient. Our informants universally agreed that without social capital, they could not make optimal use of their human capital. Even contractors at the cutting edge of their occupation required access to information about clients who needed their services at the precise moment that they needed a job. Otherwise contractors could not squeeze downtime out of the cycle by moving directly from one contract into another. In theory, contractors could acquire timely information at arm’s length from databanks and agents and, as we have seen,...

      (pp. 285-316)

      Over the course of this book we’ve journeyed through the everyday lives of technical workers who have chosen to live beyond the boundary of traditional employment as itinerant experts. These men and women consciously rejected the familiar pains and comforts of organizational life for the freedom and accompanying risks of the marketplace. As a group they partook of a way of life, a culture of work, which challenges the prevailing theories and entrenched practices of employment. Yet, contracting is poorly understood, and efforts to explain its emergence and significance have suffered from an excess of ideology and a dearth of...

    (pp. 317-320)

    When we left the field in 1999, our informants, along with the rest of the economy, were riding high on the crest of the greatest period of economic growth in modern history. All economic indicators were rosy. The New York Stock Exchange and NASDAQ were reaching new highs on an almost daily basis. Unemployment in Santa Clara County, the epicenter of Silicon Valley, stood at 2.9 percent, a historic low.¹ Venture capital flowed like water and young people with and without technical training were flocking to start-ups, many of them Internet related dot-coms. Engineers and IT professionals in the Silicon...

    (pp. 321-332)
  11. Appendix: CAST OF CHARACTERS
    (pp. 333-336)
  12. INDEX
    (pp. 337-342)