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Weekly UpdatesFederal employment has long been characterized by lengthy tenures, wages set according to an internal job classification scheme, a high level of job security, promotion from within, and adequate-to-generous pay and benefits. These are characteristics of what has been defined as an internal labor market. (1) Internal labor markets afford workers a degree of protection from external market forces. With jobs being filled from within, for example, employees do not have to compete with outside candidates for open positions. Wages tend to be stable and are protected from fluctuations in the market. Implicit in the concept of an internal labor market is that in return for wage and job stability, the workers are loyal to their employer.
Internal labor markets have been a characteristic of large employers in the United States during most of the post-World War II era. However, it has been hypothesized that the social compact between capital and labor that gave rise to internal labor markets has begun to break down. (2) As a result of heightened competition associated with globalization and gains in political power by owners of capital, many of the protections traditionally offered workers are evolving toward new forms. Theorists have pointed to widespread layoffs and downsizings, as well as to the erosion of worker benefits, to support the contention that a fundamental change in labor-management relations is in the offing. For instance, Tilly and Tilly have observed that "in recent years, Europe and North America have seen a trend away from now classic forms of employment and production. Temporary and part-time labor, franchises, deliberate stimulation of turnover to reduce seniority payments and worker organization, commission sales, and household production by means of computers and telecommunications are all chipping away at the labor markets that for a century or more have seemed the natural order of things, at least in the world of large-scale manufacturing, administration, and merchandising." (3)
A key feature of this "chipping-away" phenomenon is the expanded use of contingent work arrangements. In place of maintaining staffs consisting almost entirely of employees with permanent full-time jobs, employers are making increased use of temporary, on-call, and contract workers. Internal labor markets are being eroded, and labor is being treated like other production inputs. More firms are procuring workers on an as-needed basis, pursuant to production and workflow dictates.
Public administration specialists have posited the applicability of these ideas to the public sector. In this article, we examine the phenomenon of contingent work arrangements in the federal government. Our interest is less in the implications of these arrangements for labor and management relations than for workforce flexibility. Consistent with other studies, we employ the term nonstandard work arrangements, or NSWAs, which, as discussed further below, has broader connotations than does contingent work arrangements. The term blended workforce connotes a workforce that incorporates a high proportion of employees with NSWAs.
After defining the concepts named above, we review data regarding the incidence of different forms of NSWAs in the public sector and the private sector. We also review recent trends in NSWA usage in both sectors. We then present the findings from a recent survey of NSWA use by selected federal agencies. Finally, we discuss the blended workforce concept in the context of recent proposals to reform the federal civil service. The Bush administration included in its 2005 draft of the Working for America Act a provision for maintaining a cadre of temporary workers who would supplement the permanent workforce. We compare the Bush proposal to alternative models of the blended workforce.
The Blended Workforce. Defining the Concepts
Blended workforce is defined by the Society for Human Resource Management as "a workforce that is comprised of permanent full-time, part-time, temporary employees and independent contractors." (4)
Related but distinct terms include, contingent work, NSWAs, alternative work arrangements, flexible staffing arrangements, and just-in-time employment practices. Although all these terms refer to the same general phenomenon of other than fulltime, full-year, permanent employment, their use tends to vary by context. For example, the term contingent work is associated with the Contingent Work Supplement (CWS) to the Current Population Survey, which was initiated by the U.S. Bureau of Labor Statistics (BLS) in response to policymakers' interest in trends in the relative permanence and impermanence of work arrangements in the United States. Houseman, in contrast, used the term flexible staffing arrangements for her 2001 survey, as it was consistent with her interest in how private employers use NSWAs to enhance workforce flexibility. (5) In this article, we use the term NSWAs because it is the most inclusive of the alternatives, covering all work arrangements that are not full-time, full-year, and permanent.
The CWS has been the most ambitious and specific effort to collect data concerning the incidence of NSWAs, and, as such, the BLS's definitions of the arrangements serve as a starting point for most discussions of NWSAs. Most of the questions on the CWS survey instrument relate to the respondents' expectations regarding duration of employment. The BLS also asks each respondent whether he or she has been engaged in any of four alternative work arrangements--independent contractor, on-call worker, temporary help agency worker, or contract company worker--within a specified period. Implicit in the inclusion of these particular work arrangements in the survey is that they are more contingent than are others.
Table 1 compares the categories of NSWAs included in the CWS to those listed in two other, widely cited studies As is apparent from the table, there is no standard definition of NSWAs. The Government Accountability Office (GAO) explained the terminological and definitional confusion that prevails on this subject in a 2000 overview as follows;
As indicated in Table 1, the list of NSWAs we used for our analysis includes part-time, temporary, on-call, seasonal, temporary help agency, and contract company work. In light of our interest in the public sector, we have left out those NSWAs that are exclusive to the private sector, such as self-employment and day labor.
Contract Company Workers
Most of the NSWA categories are self-explanatory. However, the contract company worker category warrants some discussion. The BLS defines contract company worker as follows: "Contract Company Workers--Workers who are employed by a company that provides them or their services to others under contract and who are usually assigned to only one customer and usually work at the customer's worksite." (7)
For the purposes of our analysis, it is important to distinguish between contract company workers and employees of firms that work under contract with the government. As detailed by Light in The True Size of Government, the federal government contracts out for an extensive range of services. (8) Among the commercial activities listed by Light are computer programming, data processing equipment maintenance and installation, operation of cafeterias, custodial services, building construction, training, and guard services. In most instances, the contract between the government and the vendor specifies the particular service to be provided, and the contractor then mobilizes the resources required to fulfill the contract and hires and directs the workers. The work may be done at either the customer's site or the contractor's site.
Contract company workers, in contrast, are those who work under personal services contracts and who receive direction from the customer to whom they are assigned rather than from the firm that employs them. AS specified in the BLS's definition, such workers work at the customer's worksite. Included as a contract company worker in our study, then, would be an individual scientist retained by NASA through a staffing services company to work a particular research project and under the direction of a government manager at a NASA facility. Not included would be a Lockheed Martin employee who works on the space shuttle at a Lockheed Martin facility.
The distinction between contract company workers and employees of firms that work under contract with the government is important because only contract company workers are subject to supervision by government employees and, hence, appropriately included in agency workforce management considerations.
Direct-versus Indirect-Hire NSWAs
Table 1 distinguishes between direct-hire and indirect-hire NSWAs. Direct-hire work arrangements are those in which a worker is an employee of the host organization. Examples of nonstandard direct-hire work arrangements include part-time, seasonal, and on-call employment. Indirect-hire work arrangements are those in which a worker is retained through a contractual mechanism. In other words, the individual is not an employee of the organization that benefits from his or her work product. Contract company and temporary help agency employment are examples of indirect-hire work arrangements. The blended workforce concept incorporates workers with both types of arrangements.
Trends in Public and Private Use of NSWAs
The CWS survey was administered in 1995, 1997, 1999, and 2001 by the U.S. Bureau of the Census and the BLS, and it remains the single most comprehensive source of data on NSWAs in the United States. Table 2 summarizes the findings of the 1995, 1997, 1999, and 2001 CWS. As of 2001, individuals with NSWAs accounted for about one third of the total U.S. workforce. Regular, part-time employees account for 13.2% of the total, or 38.4% of all those in NSWAs. The next-largest category was independent contractors, at 6.42% of all workers and 18.4% of those with NSWAs. Self-employed workers represented 4.93% of all workers and 14.2% of those with NSWAs. Temporary help agency workers represented 3.8% of all workers.
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