Monthly Labor Review October 1996 31

Alternative Work Arrangements

Sharon R. Cohany is an

economist in the

Office of Employment

and Unemployment

Statistics, Bureau of

Labor Statistics.

Workers in alternative

employment arrangements

Workers in four selected alternative employment

arrangements—independent contractors, temporary help

agency workers, contract company workers, and on-call

workers—differ from traditional employees,

as well as from one another

Most workers are employees of the same

organization for which they carry out

their assignments. Most also have

an established schedule for reporting to work.

There always have been exceptions, however.

In recent years, a perception has emerged that

the number of exceptions is growing, that employment is more frequently being arranged by

intermediaries, and that work schedules are becoming less standardized. In order to obtain information on workers’ employment arrangements, a special survey was conducted for the

Bureau of Labor Statistics as a supplement to the

February 1995 Current Population Survey (CPS).1

This article discusses the survey findings on four

groups of workers considered to be in “alternative” arrangements: independent contractors,

temporary help agency workers, employees of

contract companies, and on-call workers.

Approximately 12 million persons, or 10 percent of the work force, fell into at least one of the

four categories.2 (See exhibit 1.) The largest was

independent contractors, with 8.3 million, followed by on-call workers (2 million), temporary

help agency workers (1.2 million), and contract

company employees (650,000). As this article

will detail, workers in these arrangements differed sharply from one another. For example,

temporary help agency workers tended to be

young women who were dissatisfied with their

work arrangement, while independent contractors were likely to be middle-aged and older men

who were very satisfied with their work.

Another major focus of the 1995 survey was

the measurement of contingent workers, defined

as workers who have no implicit or explicit contract for ongoing employment.3

 Other articles in

this issue discuss aspects of contingent workers

in detail. It is important to note that the classification of workers in alternative arrangements

was made separately from that of contingent

workers. Workers in alternative arrangements

were contingent only if they met the criteria for

contingency. For instance, some contract company employees may have perceived their job as

temporary and consequently were classified as

contingent workers; on the other hand, many of

the workers in contract companies had an expectation of ongoing employment and were not classified as contingent. Moreover, some contingent

workers’ jobs fell into one of the alternative arrangements, but in fact, most contingent workers

were in regularly scheduled jobs that did not involve intermediaries.

In the next four sections, each alternative work

arrangement will be discussed in some detail,

including the 1995 demographics of the workers, the characteristics of the jobs they held, and

the extent to which their jobs were contingent.

Companion articles in this issue by Anne E.

Polivka, Steven Hipple, and Jay Stewart discuss

data from the CPS concerning earnings and benefits of workers in alternative arrangements, as

well as employment and earnings characteristics

of contingent workers; Donna Rothstein uses

data from the National Longitudinal Survey to

examine aspects of workers in nonstandard employment arrangements.

Independent contractors

By far the largest of the four alternative arrangements, with 8.3 million workers, was independSharon R. Cohany
32 Monthly Labor Review October 1996

Alternative Work Arrangements

Type of alternative arrangement

Independent contractors

Workers identified as wage and salary workers in the basic CPS who answered affirmatively to the question, “Last

week, were you working as an independent contractor, an independent consultant, or a freelance worker? That is,

someone who obtains customers on their [sic] own to provide a product or service.” Also, workers identified as selfemployed in the basic CPS who answered affirmatively to the question, “Are you self-employed as an independent

contractor, independent consultant, freelance workers or something else (such as a shop or restaurant owner)?” in order

to distinguish those who considered themselves to be independent contractors, consultants, or freelance workers from

those who were business operators, such as shop owners or restaurateurs.

On-call workers

Workers who answered affirmatively to the question, “Some people are in a pool of workers who are ONLY called to

work as needed, although they can be scheduled to work for several days or weeks in a row, for example, substitute

teachers and construction workers supplied by a union hiring hall. These people are sometimes referred to as ON-CALL

workers. Were you an ON-CALL worker last week?”

Temporary help agency workers

Workers who said their job was temporary and answered affirmatively to the question, “Are you paid by a temporary

help agency?” Also, workers who said their job was not temporary and answered affirmatively to the question, “Even

though you told me your job was not temporary, are you paid by a temporary help agency?”

Workers provided by contract firms

Workers who answered affirmatively to the question, “Some companies provide employees or their services to others

under contract. A few examples of services that can be contracted out include security, landscaping, [and] computer

programming. Did you work for a company that contracts out you or your services last week?” These workers also had

to respond negatively to the question, “Are you usually assigned to more than one customer?” and affirmatively to the

question, “Do you usually work at the customer’s worksite?”

Exhibit 1.

ent contractors, independent consultants, and freelance workers, all subsequently referred to as independent contractors.

Unlike workers in the other arrangements, independent contractors are not employees in the traditional sense, but rather

work for themselves (or their own company), bearing the responsibility for obtaining clients, seeing that work assignments are executed, and otherwise running the business.

Workers who frequently are independent contractors include

computer consultants, freelance writers, real estate agents,

and home remodelers.

Information on the self-employed has been collected in

the CPS for many years. What was new in the 1995 survey

was that individuals were asked whether they considered

themselves an independent contractor, an independent consultant, or a freelancer, as opposed to another type of selfemployed person, such as a shop owner or restaurateur. No

restrictions were placed on the size or scope of their business: independent contractors may have one client or many,

may have employees or work alone, and may or may not have

businesses that are incorporated. Wage and salary workers,

as well as the self-employed (as identified in the basic CPS

questionnaire), had the opportunity to be classified as independent contractors; the survey questions were tailored somewhat to fit each group. Of all the self-employed, about onehalf were reported to be independent contractors. Conversely,

some 85 percent of independent contractors were classified

as self-employed in the basic questionnaire, with the remainder categorized as wage and salary workers.4

Characteristics. Independent contractors differed dramatically from traditional workers and workers in the other alternative arrangements. (Characteristics of independent contractors, as well as those of workers in the other arrangements, are

displayed in tables 1 through 11. Demographics are presented

in tables 1 through 4, part-time status is shown in table 5, occupation and industry data are in tables 6 and 7, and data related to job satisfaction are in tables 8 through 11.) The typical

independent contractor is a white man of middle age or older.

Only one-third were women, and just 5 percent were black.

Independent contractors were well educated, on average; about

34 percent had a college degree, 5 percentage points higher

than workers in traditional arrangements.

More independent contractors than traditional workers

worked part time (less than 35 hours a week), reflecting the

older age profile of the former and the strong propensity of

female independent contractors to work part time. For example, among men 65 years and older—a group that is overrepresented among independent contractors—nearly twothirds worked part time. With respect to women, nearly half

in the arrangement were part time, compared with about onefourth of those in traditional arrangements. For both groups

of women, most part-time schedules were for a noneconomic

Workers in alternative employment arrangements as a percent of total employment, February 1995

 Percent of

total employed

6.7

1.6

1.0

.5
Monthly Labor Review October 1996 33

Table 1. reason, such as family responsibilities.

At the other end of the spectrum, a relatively large share of independent contractors worked long hours: thirty percent had an average workweek that

exceeded 48 hours, about twice the proportion for traditional workers.

Seventy-one percent of the independent contractors were married, with most

of their spouses working in traditional

arrangements or not in the labor force.

Twenty percent of the husbands and

32 percent of the wives had spouses

who also worked as independent contractors. (It was not possible to estimate

how many spouses were in business

together.) As with women in traditional

jobs, slightly more than half of the women in the independent contracting arrangement were combining work with

raising children; those working for

themselves were more likely to have

preschoolers.

Quite unlike the occupational profile

of traditional workers, that of independent contractors was skewed toward several high-skilled fields. Specific occupations that were heavily represented

were writers and artists, insurance and

real estate sales agents, construction

trade employees, and miscellaneous

managers and administrators. Few independent contractors were reported in

technical, clerical, or laborer occupations. The most popular fields for men

were managerial, skilled craft, and

sales positions; for women, the most

common areas were service (mainly

cleaners, child care providers, and hairdressers), sales, and

professional specialty occupations.

Several industries in which independent contractors were

disproportionately represented were construction; finance, insurance, and real estate; and services. Relatively few independent contractors were reported in manufacturing or wholesale and retail trade. In the case of manufacturing, a very small

share of total employment was self-employed at all. As for

trade, a sizable number of workers in the industry were selfemployed, but not as independent contractors.

Number of employees. To obtain a measure of the extent of

their operations, independent contractors were asked whether

they had any paid employees and, if so, how many they had.

Employed persons in alternative and traditional work arrangements, by

selected characteristics, February 1995

 [Percent distribution]

Age and sex

Total, 16 years and older

(thousands) ...................... 8,309 1,968 1,181 652 111,052

Percent .............................. 100.0 100.0 100.0 100.0 100.0

16 to 19 years ....................... 1.5 7.8 5.2 2.5 4.7

20 to 24 years ....................... 2.4 11.5 19.7 12.7 10.5

25 to 34 years ....................... 19.7 25.4 34.1 39.0 26.4

35 to 44 years ....................... 30.8 23.2 21.3 23.3 27.6

45 to 54 years ....................... 25.3 15.9 12.1 11.8 19.2

55 to 64 years ....................... 13.6 9.6 5.8 6.7 8.9

65 years and older ................ 6.7 6.7 1.8 4.1 2.5

Men, 16 years and older .... 67.3 48.4 47.2 71.5 52.8

16 to 19 years ....................... .9 3.9 3.0 1.4 2.4

20 to 24 years ....................... 1.6 6.7 11.4 6.4 5.6

25 to 34 years ....................... 12.6 13.1 16.8 29.8 14.3

35 to 44 years ....................... 21.0 10.8 7.7 19.0 14.5

45 to 54 years ....................... 16.7 6.7 4.4 5.7 10.0

55 to 64 years ....................... 9.6 3.7 2.8 5.2 4.7

65 years and older ................ 4.9 3.6 1.1 4.1 1.4

Women, 16 years and older 32.7 51.6 52.8 28.5 47.2

16 to 19 years ....................... .6 3.9 2.3 1.1 2.4

20 to 24 years ....................... .8 4.8 8.3 6.1 4.9

25 to 34 years ....................... 7.1 12.3 17.4 9.2 12.1

35 to 44 years ....................... 9.8 12.4 13.5 4.3 13.1

45 to 54 years ....................... 8.5 9.1 7.7 6.3 9.2

55 to 64 years ....................... 4.0 5.8 2.9 1.5 4.2

65 years and older ................ 1.8 3.2 .8 (1

) 1.1

Race and Hispanic origin

White ..................................... 92.3 84.9 72.7 83.0 85.1

Black ..................................... 5.0 10.4 21.8 11.7 10.9

Hispanic origin ...................... 5.2 9.6 11.3 8.4 8.6

1

Less than 0.05 percent.

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories. Entries under “Race and Hispanic origin” will not sum to 100 percent because data for the

“other races” group are not presented and Hispanics are included in both the white and black population

groups. Details for other characteristics may not sum to totals because of rounding.

Characteristic Independent

contractors

On-call

workers

Temporary

help

agency

workers

 Workers

provided by

contract

firms

Workers

in

traditional

arrangements

Workers in alternative arrangements

A majority worked alone, women more often than men, as

shown in the following tabulation:

Total Men Women

Total, thousands ............. 8,309 5,595 2,714

Percent with—

No employees .................. 75.5 69.6 87.6

At least 1 employee ......... 23.9 29.7 11.8

1 employee ................... 6.2 7.8 2.9

2 employees .................. 4.9 5.7 3.1

3 to 5 employees .......... 5.9 7.3 3.1

6 to 9 employees .......... 2.6 3.4 1.0

10 or more employees .. 3.1 3.9 1.3

Number of employees

not available ............... 1.1 1.5 .4

Presence of employees

not available .................. .7 .7 .7
34 Monthly Labor Review October 1996

Alternative Work Arrangements

Some business owners incorporate to protect themselves

from liability and to gain tax advantages. About 20 percent of

independent contractors had incorporated their businesses

(compared with 30 percent of all the self-employed).5 Given

the costs of incorporation, it would be reasonable to expect

that such businesses were larger, on average, than other enterprises. In fact, more than one-half of independent contractors with businesses that were incorporated had employees

(in addition to the owner), compared with just 18 percent of

those whose businesses were unincorporated. Further, of independent contractors with at least one employee (again, other

than the owner), 36 percent whose businesses were incorporated had six or more employees, compared with only 13 percent of those with unincorporated operations. Among industries in which independent contracting was fairly prevalent,

employees were most often found in construction, retail trade,

and finance, insurance, and real estate.

Preference and contingency. Several concerns related to the

self-employed have been expressed in

recent years. One is that, in an effort to

cut costs, companies have removed

some wage and salary workers from

their payrolls and then brought them

back as self-employed contractors, presumably with less job security and few

or no benefits. Another concern has focused on workers who would prefer a

traditional job, but have had no success

in finding one and as a result must “put

out a shingle” and work for themselves.

While the 1995 survey did not collect

information on either of these situations directly, the responses to questions related to job satisfaction cast

doubt on their prevalence. When asked

about the kind of work arrangement

they preferred, a strikingly high proportion (83 percent) of independent contractors said that they preferred their

situation to that of a traditional employee. Moreover, when asked why

they worked as independent contractors, most gave a personal reason, such

as flexibility or the fact that they were

their own boss. Only 10 percent—the

smallest proportion of any arrangement—gave an economic reason. Finally, very few independent contractors

see themselves as contingent workers: the proportion of contractors who

indicated that their employment could

not continue indefinitely was just 4 percent, the same as for

traditional workers.

Tenure. It would appear, then, that, as a group, independent

contractors feel very secure in their work. In fact, the length

of time they have been working for themselves bears this supposition out. The median tenure as an independent contractor

was 6.9 years, by far the longest of the arrangements studied.

By comparison, tenure for traditional workers—a younger

group, on average, to be sure—was 4.9 years (with their current employer). Men had spent more time as independent contractors than women had, 8.1 years versus 5.4 years, not surprising given men’s lengthier attachment to the work force in

general. Still, nearly one-third of the women had worked as

independent contractors for at least 10 years. White independent contractors reported a longer tenure than blacks did, although the tenure for blacks was nearly 6 years.

Independent contractors constituted nearly 7 percent of all

workers. Of the major demographic groups, the highest inciEmployed persons in alternative and traditional work arrangements, by

educational attainment and sex, February 1995

 [Percent distribution]

Total, 25 to 64 years

(thousands) .................... 7,428 1,456 864 527 91,318

Percent ............................. 100.0 100.0 100.0 100.0 100.0

Less than a high school

diploma ................................ 8.7 11.3 14.2 9.5 9.7

High school graduate,

no college ............................ 29.1 35.6 33.4 29.8 32.5

Less than a bachelor’s

degree ................................. 27.9 31.5 32.1 30.2 29.0

College graduate ................... 34.4 21.7 20.3 30.6 28.9

Men, 25 to 64 years

(thousands) ....................... 4,981 675 374 389 48,330

 Percent ............................... 100.0 100.0 100.0 100.0 100.0

Less than a high school

diploma ................................ 9.7 17.8 17.3 7.5 11.0

High school graduate,

no college ............................ 29.6 41.0 33.1 29.6 31.4

Less than a bachelor’s

degree ................................. 25.6 29.9 31.2 34.5 27.0

College graduate ................... 35.2 11.4 18.4 28.4 30.7

Women, 25 to 64 years

(thousands) ....................... 2,447 781 490 139 42,988

Percent ................................ 100.0 100.0 100.0 100.0 100.0

Less than a high school

diploma ................................ 6.8 5.6 11.8 15.2 8.2

High school graduate,

no college ............................ 28.0 30.9 33.7 30.4 33.7

Less than a bachelor’s

degree ................................. 32.5 32.9 32.9 17.4 31.2

College graduate ................... 32.7 30.5 21.6 37.0 26.9

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternativearrangement categories. Details may not sum to totals because of rounding.

Independent

contractors

On-call

workers

Temporar y

help

agency

workers

 Workers

provided by

contract

firms

Workers in alternative arrangements

Educational attainment

and sex

Table 2.

Workers

in

 traditional

arrangements
Monthly Labor Review October 1996 35

Employed women in alternative and traditional work arrangements, by

marital status and presence and age of children, February 1995

 [Percent distribution]

Total

Wives and women who

maintain families

(thousands) ......................... 2,121 685 392 99 35,405

Percent .................................. 100.0 100.0 100.0 100.0 100.0

With children under

18 years ............................ 54.3 57.4 61.0 48.5 56.3

With children under

6 years ......................... 26.1 24.5 28.6 24.2 22.6

With children 6 to

17 years ....................... 28.1 32.8 32.4 24.2 33.7

With no children under

18 years ............................ 45.7 42.5 39.0 51.5 43.7

Married, spouse present

Wives (thousands) ................ 1,854 587 277 79 28,681

Percent .................................. 100.0 100.0 100.0 100.0 100.0

With children under

18 years ............................ 53.2 56.7 53.6 48.1 53.8

With children under

6 years .......................... 27.2 25.9 25.9 29.1 22.8

With children 6 to

17 years ........................ 26.0 30.8 27.7 19.0 31.0

With no children under

18 years ............................ 46.8 43.3 46.4 51.9 46.2

Other marital status

Women who maintain families

 (thousands) ......................... 267 98 115 20 6,724

Percent .................................. 100.0 100.0 100.0 100.0 100.0

With children under

18 years ............................ 61.8 62.2 78.9 (1) 67.1

With children under

6 years .......................... 18.4 16.3 35.1 (1

) 22.0

With children 6 to

17 years ........................ 43.2 45.9 43.9 (1) 45.1

With no children under

18 years ............................ 38.2 37.8 21.1 (1) 32.9

1

 Percentage not shown where base is less than 75,000.

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories. Details may not sum to totals because of rounding.

In sum, independent contracting,

the largest alternative arrangement,

was made up disproportionately of

older, college-educated men. On the

basis of the high degree of satisfaction

with their work, the length of time they

have been in business, and the low incidence of contingency, independent

contractors stand out among workers

in the alternative arrangements studied as being in their employment of

choice.

Temporary help agency

workers

Perhaps the most well-known employment intermediary is the temporary

help agency, which provides workers

to client companies, typically on a

short-term basis.7 Such organizations

trace their modern-day beginnings to

the 1920s, when they provided clerical workers to firms in the Chicago

area to meet the needs of an increasingly service-based economy. These

pioneer firms boosted the demand for

their services by equipping their workers with an electric calculator, a costly

machine at the time, to take to their

assignments.8

Since the end of World War II, a

variety of social, economic, and demographic changes—including heightened international competition, greater

fluctuations in demand, increased

costs of fringe benefits, a decline in

unionization, and shifts in the composition of the labor force—have resulted in explosive growth among providers of temporary

help.9

 Today, temporary help companies such as Kelly Services, Manpower, and Olsten are among the most familiar

names on the corporate landscape, and temporary workers

have become a permanent fixture in many workplaces.

Temporary help firms still furnish clerical workers to their

client companies, as well as industrial workers and a variety

of professional, technical, and even executive staff. Temporary help agencies recruit, check references, test, and sometimes train workers. When client companies have a need for a

temporary worker, they contact the temporary help firm with

information on the skills they are looking for and the location

and estimated length of the assignment. The firm then proIndependent

contractors

On-call

workers

Temporary

help

agency

workers

 Workers

provided by

contract

firms

Workers in alternative arrangements

Table 3.

Characteristic

Workers

in

 traditional

arrangements

dence of independent contracting was found among men aged

65 and older, 20 percent of whom were working under such

an arrangement. Many of these workers had been in business

for quite some time; in fact, 53 percent had a tenure of at least

20 years. For others, independent contracting provided employment after they retired from their “career” jobs: about

one-fourth had been working as independent contractors for

fewer than 10 years. As previous studies of the self-employed

have pointed out, working for oneself can favor older workers, as it often requires the accumulation of considerable skills

and capital. It also may offer more flexibility than wage and

salary work does, as well as the opportunity to work at one’s

own pace.6
36 Monthly Labor Review October 1996

Alternative Work Arrangements

Incidence of alternative and traditional work arrangements, by selected

characteristics, February 1995

 [Percent distribution]

Age and sex

Total, 16 years and older ..... 123,208 6.7 1.6 1.0 0.5 90.1

16 to 19 years ....................... 5,635 2.2 2.7 1.1 .3 93.5

20 to 24 years ....................... 12,421 1.6 1.8 1.9 .7 93.8

25 to 34 years ....................... 32,138 5.1 1.6 1.3 .8 91.3

35 to 44 years ....................... 34,113 7.5 1.3 .7 .4 89.9

45 to 54 years ....................... 23,980 8.8 1.3 .6 .3 89.0

55 to 64 years ....................... 11,370 9.9 1.7 .6 .4 87.4

65 years and older ................ 3,551 15.7 3.7 .6 .8 79.3

Men, 16 years and older ..... 66,290 8.4 1.4 .8 .7 88.5

16 to 19 years ....................... 2,820 2.5 2.7 1.2 .3 92.9

20 to 24 years ....................... 6,634 2.0 2.0 2.0 .6 93.0

25 to 34 years ....................... 17,566 6.0 1.5 1.1 1.1 90.4

35 to 44 years ....................... 18,317 9.5 1.2 .5 .7 88.0

45 to 54 years ....................... 12,694 10.9 1.0 .4 .3 87.3

55 to 64 years ....................... 6,187 12.8 1.2 .5 .5 84.8

65 years and older ................ 2,072 19.7 3.4 .6 1.3 75.2

Women, 16 years

and older ........................... 56,918 4.8 1.8 1.1 .3 92.0

16 to 19 years ....................... 2,816 1.9 2.7 1.0 .2 94.0

20 to 24 years ....................... 5,786 1.1 1.6 1.7 .7 94.7

25 to 34 years ....................... 14,572 4.1 1.7 1.4 .4 92.5

35 to 44 years ....................... 15,796 5.1 1.5 1.0 .2 92.2

45 to 54 years ....................... 11,286 6.3 1.6 .8 .4 90.9

55 to 64 years ....................... 5,183 6.5 2.2 .7 .2 90.5

65 years and older ................ 1,479 10.1 4.3 .6 (1

) 85.1

Race and Hispanic origin

White ..................................... 105,239 7.3 1.6 .8 .5 89.8

Black ..................................... 13,108 3.2 1.6 2.0 .6 92.6

Hispanic origin ...................... 10,441 4.1 1.8 1.3 .5 91.6

 Educational attainment

 (age 25 to 64)

Less than a high school

diploma ................................ 9,851 6.6 1.7 1.2 .5 89.7

High school graduate,

no college ............................ 32,760 6.6 1.6 .9 .5 90.5

Less than a bachelor’s

degree ................................. 29,407 7.0 1.6 .9 .5 89.9

College graduate ................... 29,582 8.6 1.1 .6 .5 89.2

1

Less than 0.05 percent.

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories. Details may not sum to totals because a small number of workers are both on call and

provided by contract firms, and the total employed includes day laborers, an alternative arrangement not

shown separately. Entries under “Race and Hispanic” origin will not sum to 100 percent because data for

the “other races” group are not presented and Hispanics are included in both the white and black population groups.

vides a worker with the requisite skills and bills the client the

worker’s pay rate plus a premium. The workers are employees of the temporary help firm, which issues their paychecks,

withholds payroll taxes, and makes required employer contributions for Social Security and unemployment insurance.

While opinions differ as to the relative importance of supply and demand factors in explaining the growth of temporary help agencies, it is clear that such

firms meet the needs of both employers and workers. For employers, temporary help firms occupy an important

niche by providing qualified workers

on short notice. These workers may fill

in for permanent employees who are

ill or on vacation or maternity leave.

“Temps” also may augment the

company’s regular work force during

a period of increased staffing needs

(for instance, for a large mailing, a conference, or a seasonal surge in orders).

In addition, they may bring specialized

skills that the company needs only occasionally. In a downsizing environment, hiring temps is a way for managers to handle the work load while

meeting personnel ceilings. For some

companies, obtaining workers through

a temporary help agency enables them

to “audition” prospective employees.

Because the client company pays only

for the hours of work that are needed

and avoids the cost of terminating

workers, temps can be a cost-effective

means of getting the work done.10

For workers, “temping” meets a

need for short-term, flexible employment for mothers, older workers, and

many others who do not want a longterm job. Because the temporary

worker can turn down assignments,

this arrangement can provide the flexibility needed to balance work with

other commitments, such as family responsibilities, school, and even other

employment.11 Some workers prefer

the variety of temporary assignments

to the predictability of a regular job.

Temping also gives workers opportunities to obtain experience and training, explore the local labor market, and

test a variety of job settings before

making a permanent commitment. Estimates from the temporary help industry indicate that a sizable number of temporary assignments lead to permanent

employment.12 (Anne E. Polivka, pages 55–74, this issue, presents findings from the February 1995 survey on workers’

transitions from alternative to traditional jobs.) To be sure,

not all workers are motivated strictly by personal preference:

workers may temp to fill in the gap between “regular” jobs.

Table 4.

 Workers

provided

b y

contract

firms

Workers

in

traditional

arrangements

On-call

workers

Temporary

help

agency

workers

Independent

contractors

Characteristic

Table 4.

Workers in alternative arrangements

Total

employed

(thousands)
Monthly Labor Review October 1996 37

Employed persons in alternative and traditional work arrangements, by

full- and part-time status, reason for part-time work, sex, and age,

February 1995

 [Percent distribution]

Total

Employed (thousands) .... 8,309 1,968 1,181 652 111,052

Percent ........................... 100.0 100.0 100.0 100.0 100.0

Full-time workers ................... 74.4 44.1 79.4 84.0 81.7

Part-time workers .................. 25.6 55.9 20.5 16.0 18.3

At work part time for

economic reasons ............ 6.4 19.0 10.9 5.1 3.3

At work part time for

noneconomic reasons ...... 18.9 36.2 10.9 10.6 14.6

Men, 20 years and older

Employed (thousands) .... 5,524 876 522 457 56,058

Percent ............................ 100.0 100.0 100.0 100.0 100.0

Full-time workers ................... 85.6 66.8 84.1 88.4 92.0

Part-time workers .................. 14.4 33.2 15.9 11.6 8.0

 At work part time for

economic reasons ............ 6.8 19.6 8.6 5.5 2.8

At work part time for

noneconomic reasons ...... 9.0 18.5 8.2 5.5 5.8

 Women, 20 years and older

Employed (thousands) .... 2,660 938 596 179 49,726

Percent ............................ 100.0 100.0 100.0 100.0 100.0

Full-time workers ................... 53.5 28.8 76.5 76.5 76.2

Part-time workers .................. 46.5 71.2 23.5 23.5 23.8

At work part time for

economic reasons ............ 5.6 18.3 13.7 2.8 3.5

At work part time for

noneconomic reasons.... 37.1 48.1 11.7 21.2 18.9

Both sexes, 16 to 19 years

Employed (thousands) .... 125 153 62 16 5,267

Percent ............................ 100.0 100.0 100.0 100.0 100.0

Full-time workers ................... 20.8 8.5 (1

) (1) 23.5

Part-time workers .................. 79.2 91.5 (1) (1) 76.5

At work part time for

economic reasons ............ 4.8 18.3 (1

) (1) 6.5

At work part time for

noneconomic reasons ...... 71.2 65.4 (1

) (1) 67.3

1 Percentage not shown where base is less than 75,000.

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories. Details may not sum to totals because of rounding and because the total employed

includes day laborers, an alternative arrangement not shown separately. Part time is defined as working 1

to 34 hours per week; full time is 35 hours or more. The classification of full- and part-time workers is based

on the number of hours usually worked. The sum of the at-work part-time categories does not equal the

preceding figure for part-time workers, as the latter includes those who had a job, but were not at work in

the reference week. Also, persons at work part time for an economic reason can work either full or part time

on a usual basis; persons at work part time for a noneconomic reason are limited to those who usually work

part time.

permanent staff of the agency indicated

that they were paid by their agencies,

the estimate of the number of temps includes the staff—a relatively small

number—as well as the temporary

workers.) More than half (53 percent)

of those in the arrangement were

women, compared with 47 percent of

traditional workers. Many women do,

in fact, combine family responsibilities

with their temporary work: more than

60 percent had at least one child under

the age of 18, and nearly half of the

mothers had at least one preschooler.

Both proportions were somewhat

higher than those for women in traditional work arrangements.

One of the more striking features of

temporary help agency workers is their

youth. One-fourth were under the age

of 25, giving temps the youngest age

profile of any of the arrangements studied. By comparison, just 15 percent of

traditional workers were in this age

group. The male temps were even

younger than the female temps, with

nearly one-third under 25. A particularly large share of temps was between

the ages of 20 and 24. Their motivation did not seem to be related to

school attendance, as most young

people who temped were not enrolled

in high school or college.

In addition to being disproportionately young and female, temporary

help agency workers were more likely

to be members of a minority group.

Blacks made up 22 percent of the temporary help work force, double their

share of traditional employment, while

Hispanics made up 11 percent of

temps, compared with their 9-percent

share of traditional employees. Furthermore, black and Hispanic men

were more likely to work as temps than

were black and Hispanic women, the

opposite of the situation among whites.

(Analysis of data for Hispanics is severely restricted due to limitations of the CPS sample.)

Temporary help agency workers were somewhat less educated, on average, than other workers. Fourteen percent had

not completed high school, compared with 10 percent of traIndeed, when permanent jobs are scarce, temping may be one

of the few employment options available.13

In the 1995 survey, 1.2 million workers were identified as

being paid by a temporary help agency. (To the extent that

Table 5.

Independent

contractors

On-call

workers

Temporary

help

agency

workers

 Workers

provided by

contract

firms

Workers in alternative arrangements

Characteristic

Workers

in

 traditional

arrangements
38 Monthly Labor Review October 1996

Alternative Work Arrangements

Employed persons in alternative and traditional work arrangements, by

occupation and sex, February 1995

 [Percent distribution]

Total, 16 years and older

(thousands) ............................... 8,309 1,968 1,181 652 111,052

Percent ....................................... 100.0 100.0 100.0 100.0 100.0

Executive, administrative, and

managerial ................................... 18.6 3.0 6.5 5.7 13.6

Professional specialty .................... 16.3 22.1 8.3 25.6 14.7

Technicians and related support .... 1.1 1.6 3.7 6.9 3.4

Sales occupations .......................... 18.8 6.2 2.6 3.2 11.7

Administrative support, including

clerical .......................................... 3.8 9.9 30.1 4.8 16.0

Service occupations ....................... 10.6 20.0 9.0 27.8 13.6

Precision production, craft,

and repair ..................................... 19.2 13.3 5.6 14.6 10.1

Operators, fabricators,

and laborers ................................. 6.5 20.1 33.2 10.4 14.6

Farming, forestry, and fishing ......... 5.1 3.8 1.0 .9 2.4

Men, 16 years and older

(thousands) ............................... 5,595 952 557 466 58,678

Percent ....................................... 100.0 100.0 100.0 100.0 100.0

Executive, administrative, and

managerial ................................... 22.1 2.5 7.3 5.8 14.3

Professional specialty .................... 14.4 10.5 7.3 23.4 12.8

Technicians and related support .... 1.1 .5 4.5 6.9 3.1

Sales occupations .......................... 17.5 2.5 1.4 .6 11.4

Administrative support, including

clerical .......................................... .7 4.6 11.1 1.9 6.2

Service occupations ....................... 2.3 12.2 8.8 26.6 10.5

Precision production, craft,

and repair ..................................... 27.1 26.3 7.9 20.4 17.2

Operators, fabricators,

and laborers ................................. 8.0 34.1 49.5 13.3 20.8

Farming, forestry, and fishing ......... 6.7 6.6 2.2 1.3 3.7

Women, 16 years and older

(thousands) ............................... 2,714 1,015 624 186 52,373

 Percent ...................................... 100.0 100.0 100.0 100.0 100.0

Executive, administrative, and

managerial ................................... 11.3 3.4 5.8 5.4 12.9

Professional specialty .................... 20.1 33.0 9.1 31.4 16.8

Technicians and related support .... 1.0 2.7 3.0 7.6 3.7

Sales occupations .......................... 21.3 9.6 3.7 9.7 12.0

Administrative support, including

clerical .......................................... 10.3 14.8 47.0 11.9 26.9

Service occupations ....................... 27.7 27.2 9.1 30.8 17.0

Precision production, craft,

and repair ..................................... 2.9 1.2 3.5 (1

) 2.1

Operators, fabricators,

and laborers ................................. 3.4 6.9 18.6 3.2 7.6

Farming, forestry, and fishing ......... 2.0 1.2 (1) (1) 1.0

1

Less than 0.05 percent.

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories. Details may not sum to totals because of rounding.

ditional workers. Just 20 percent were college graduates, 9

percentage points lower than the share of other workers.

Surprisingly, perhaps, given the short-term nature of many

of their assignments, temps were not, as a rule, part-timers.

Nearly four-fifths of temps worked full time (at least 35 hours

per week), a proportion only slightly lower than that of traditional workers. There was, however, a

notable difference in the reasons given

for working part time: one-half of the

part-time temps had an economic reason for their short hours and would

have preferred full-time work, compared with only 18 percent of traditional workers.

Occupations and industries. Congruent with the popular image of the industry, temporary help agency workers

were heavily concentrated in clerical

and machine operator positions. In fact,

these two categories accounted for

nearly two-thirds of all temporary help

agency workers. Among industries,

there was a similarly lopsided distribution, with manufacturing and services

making up 72 percent of the industries

to which temps were assigned.

There was a sharp division of labor

by sex: half of the men were operators,

fabricators, and laborers, while nearly

half of the women were in clerical positions. A similar split was observed in

the industry distribution, with 42 percent of the men having been assigned

to a manufacturing firm and 46 percent

of the women to a company in the services industry. As mentioned earlier, a

relatively large number of black and

Hispanic men were temporary help

agency workers, a fact that likely reflects the types of jobs intermediated

by temporary help services, especially

operator, fabricator, and laborer positions, which are disproportionately

held by minority men.14

Preference. Those who argue that the

growth in temporary help jobs is driven

more by demand factors than supply

factors may find evidence for their position in the responses to questions on

workers’ preferences for alternative

versus traditional employment. In response to one question,

only 27 percent of temporary help agency workers indicated

that they preferred working that way, the lowest percentage

of any of the four alternative work arrangements. Nearly twothirds (63 percent) said that they would prefer a traditional

job, of whom 40 percent were actively looking for one. (The

Workers

in

 traditional

arrangements

Workers in alternative arrangements

Table 6.

 Workers

provided by

contract

firms

Temporar y

help

agency

workers

On-call

workers

Independent

contractors

Occupation

and sex
Monthly Labor Review October 1996 39

Employed persons in alternative and traditional work arrangements, by

industry and sex, February 1995

 [Percent distribution]

Total, 16 years and older

(thousands) ............................... 8,309 1,968 1,181 652 111,052

Percent. ...................................... 100.0 100.0 100.0 100.0 100.0

Agriculture ...................................... 5.0 3.7 .4 .3 2.4

Mining ............................................ .2 .5 .2 2.4 .6

Construction ................................... 21.2 13.1 2.8 8.4 4.4

Manufacturing ................................ 5.0 6.3 33.5 17.6 17.9

Transportation and public utilities ... 5.0 9.0 7.7 13.4 7.2

Wholesale and retail trade ............. 13.2 14.5 8.1 6.0 21.4

Finance, insurance, and

real estate .................................... 9.6 1.9 7.5 6.9 6.4

Services ......................................... 40.6 47.4 38.7 32.3 34.4

Public administration ...................... .3 3.5 1.2 12.6 5.4

Men, 16 years and older

(thousands). .............................. 5,595 952 557 466 58,678

Percent ....................................... 100.0 100.0 100.0 100.0 100.0

Agriculture ...................................... 6.3 6.9 .8 .5 3.3

Mining ............................................ .2 1.1 .4 2.7 .9

Construction ................................... 29.9 26.9 4.4 11.1 7.3

Manufacturing ................................ 5.3 9.7 42.2 21.9 23.2

Transportation and public utilities ... 5.9 14.0 9.4 15.4 9.5

Wholesale and retail trade ............. 11.9 11.9 7.3 5.0 21.7

Finance, insurance, and

real estate .................................... 9.6 1.3 5.0 7.7 4.7

Services ......................................... 30.8 24.9 29.8 23.8 23.6

Public administration ...................... (1

) 3.5 1.0 12.0 5.7

Women, 16 years and older

(thousands) ............................... 2,714 1,015 624 186 52,373

Percent ....................................... 100.0 100.0 100.0 100.0 100.0

Agriculture ...................................... 2.2 .7 (1) (1) 1.3

Mining ............................................ .2 (1

) (1) 1.7 .2

Construction ................................... 3.4 .4 1.5 2.2 1.1

Manufacturing ................................ 4.3 3.2 25.8 6.7 11.9

Transportation and public utilities ... 3.1 4.2 6.0 8.4 4.7

Wholesale and retail trade ............. 15.8 16.9 8.8 8.4 21.0

Finance, insurance, and

real estate .................................... 9.4 2.6 9.8 5.0 8.4

Services ......................................... 60.9 68.5 46.4 53.6 46.5

Public administration ...................... .7 3.6 1.7 14.0 5.0

1

Less than 0.05 percent.

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories. Details may not sum to totals because of rounding. For temporary help agency

workers and workers provided by contract firms, the industry classification is that of the place to which they

were assigned.

Tenure and contingency. Most temporary help agency employees were

relatively new to the arrangement, and

few had been in it more than 3 years.

Just 24 percent had spent more than a

year as a temp. Most assignments were

fairly short term; 42 percent had been

at their current assignment less than 3

months, 72 percent less than 9 months.

While many temporary assignments are

measured in days or weeks, some are

much longer. In fact, 16 percent of temporary help agency workers had been

working at their current assignment for

more than a year.

Two-thirds of temporary help agency employees were contingent under

the broadest estimate of contingency

presented in the lead article, this issue,

and could not work in their current assignment for as long as they wished.

This was the highest proportion of any

of the work arrangements studied. It

may be surprising that the figure is not

higher. On the other hand, only 39 percent of temporary help agency workers were contingent under the narrowest estimate of contingency, which

measures whether the relationship with

the temporary help firm (rather than the

assignment) could be ongoing.

Special characteristics. To increase

their chances of obtaining work, some

workers register with more than one

temporary help agency at a time. In

February 1995, 22 percent had multiple

registrations. Even though some assignments are just for a day or two, nearly

all temps were assigned to only one

work site during the reference week.

Other data sources. The temporary help industry is unique

among the four employment arrangements under study in that

the Bureau of Labor Statistics has produced limited, but regular, information on the industry for some time. The Bureau’s

other major employment survey, the Current Employment

Statistics (CES) survey, obtains, from employers, information

on employment, hours, and earnings of workers on payrolls

in nonfarm industries, including the help supply services industry (SIC 7363). Data from this survey clearly have established the rapid expansion of the industry, which has grown

Workers

in

 traditional

arrangements

Table 7.

 Workers

provided by

contract

firms

Temporary

help

agency

workers

On-call

workers

Independent

contractors

Industry and sex

Workers in alternative arrangements

remaining 10 percent did not state a clear preference or did

not provide any answer to the question.) Dissatisfaction was

higher among men, with 71 percent preferring traditional employment, compared with 57 percent of the women. When

asked why they worked through a temporary agency, a majority of both men and women provided an economic reason,

such as “It was the only type of work I could find” or “I hope

it leads to permanent employment,” in contrast to a personal

reason, such as “flexibility” or “family obligations.” Among

women, however, a sizable minority gave a personal reason.
40 Monthly Labor Review October 1996

Alternative Work Arrangements

from 400,000 employees in 1982 to more than 2 million in

1995.15

At first glance, there appears to be a large discrepancy between the number of temporary help agency workers as measured in the CPS supplement (1.2 million), compared with the

CES survey (2 million). On closer inspection, however, much

of this difference can be explained by important differences

in the concepts and methodologies of the two surveys. The

CES survey provides an estimate of the number of people on

company payrolls in the reference period (the pay period that

includes the 12th of the month). Employees who were paid

by two temporary agencies during that period (a minority of

temps, to be sure) would be counted on both payrolls. In contrast, in the CPS, each worker is counted just once, regardless

of the number of jobs he or she holds. By the same token,

traditional workers who moonlighted as temps would be

counted in the temporary help industry (as well as the industry of their primary job) in the CES survey, but not in the CPS,

where they would be classified according to their main job

only. Also, because SIC 7363 includes firms “engaged in supplying temporary or continuing help on a contract or fee basis,”16 the CES estimate for the industry includes some workers who were reported to be contract company employees in

the CPS and others who worked for employee-leasing firms.

When adjusted for these factors, the CPS estimate comes very

close to the CES estimate. A reconciliation of the two estimates is provided in the lead article,

this issue.

In sum, temporary help agency

workers were disproportionately

young, female, and members of minority groups, and somewhat less educated than other workers. Although

they were found in a variety of occupations, most worked in clerical and

industrial labor positions. They were

relatively dissatisfied with their work

situation: two-thirds said that they

would prefer a traditional job. While

individual assignments tended to be

short term, most workers felt that they

could stay with their temporary help

firm as long as they wished.

Workers employed by

a contract company

The other form of intermediated employment examined in the 1995 survey

was work arranged through a contract

company. Generally speaking, contract

companies supply workers to client

companies to provide a variety of services that the client companies prefer to be carried out by contract staff rather than inhouse employees. Examples of services that frequently are

contracted out include building security and cleaning, construction trades, and computer programming.

Many workers are employed by firms that provide a service to other companies. For this study, it was important to

focus on just those workers whose employment appeared to

be very closely tied to the firm for which they were performing the work. Therefore, to be classified as contract company

employees, individuals had to meet two additional criteria:

that they usually worked for only one customer and that the

work was done on the customer’s premises. According to the

1995 survey, about 650,000 workers met these requirements.

For client companies, contract workers have many of the

same advantages as temporary help agency workers. Contract workers can reduce the size of the client companies’

permanent staff, mitigate the cost of recruiting employees,

moderate the effect of fluctuations in sales, and provide access to specialized skills. Although they work on the client

company’s premises, the workers are employees of the contract company, which pays their wages, supplies whatever

benefits they receive, and generally oversees their work. Dayto-day supervision of contract workers typically is handled

by the client company. When an assignment ends, workers

may be moved to another project, or their employment may

Employed persons in alternative work arrangements, by preference for

arrangement and sex, February 1995

 [Percent distribution]

Total, 16 years and older (thousands) ..... 8,309 1,968 1,181

Percent .................................................... 100.0 100.0 100.0

Prefer traditional arrangement ................... 9.8 56.7 63.3

Prefer alternative arrangement .................. 82.5 36.6 26.6

It depends .................................................. 5.1 4.2 8.1

Not available .............................................. 2.6 2.5 1.9

Men, 16 years and older (thousands)...... 5,595 952 557

Percent .................................................... 100.0 100.0 100.0

Prefer traditional arrangement ................... 9.1 62.3 70.5

Prefer alternative arrangement .................. 83.8 31.2 20.7

It depends .................................................. 5.0 3.7 6.5

Not available .............................................. 2.1 2.8 2.3

Women, 16 years and older (thousands) 2,714 1,015 624

Percent .................................................... 100.0 100.0 100.0

Prefer traditional arrangement ................... 11.2 51.3 57.1

Prefer alternative arrangement .................. 79.8 41.8 31.7

It depends .................................................. 5.2 4.7 9.6

Not available .............................................. 3.8 2.3 1.6

NOTE: Details may not sum to totals because of rounding. Information on preferrred arrangement is

not available for workers employed by contract companies.

Temporary

help agency

workers

On-call

workers

Independent

contractors Characteristic

Table 8.
Monthly Labor Review October 1996 41

be terminated. Assignments tend to be longer with contract

companies than with temporary help agencies, although, as

noted earlier, temporary help agencies sometimes are intermediaries for long-term employment as well. (In the February 1995 survey, an individual’s categorization was self-determined. Those who responded that they worked for a

temporary help agency would have been classified in that arrangement and not asked whether they were employed by a

contract company.)

The 1995 survey represented the first time information on

contract company employment was gathered directly from a

household survey. Previous estimates

of contract company employment

were based on information derived

from surveys of employers, including

the CES survey, and were focused on

selected industries, such as business

services (SIC 73), that were assumed

to involve a significant amount of contracting.17 In one study, Janice

Murphey, a BLS researcher, found that

employers in four manufacturing industries reported significantly higher

rates of contracting out from 1980 to

1986.18 In another study, John

Tschetter, also of the Bureau, examined reasons for the dramatic growth

of business services over a similar period and found no significant shifts

toward contracting out functions that

previously had been done in-house.19

And in a recent article in the Journal

of Labor Economics, Katharine G.

Abraham and Susan K. Taylor identified three factors that influence a

firm’s decision to contract out for

business support services: savings in

compensation costs, volatility of demand, and the specialized skills offered by the contractor.20

Characteristics. Compared with traditional workers, employees with contract firms were disproportionately

male and younger than 35. Most

worked full time. They were somewhat more likely to have attended college than traditional workers were.

The single largest occupation among

contract company workers was security guards, which accounted for 15

percent of the total. Construction

trades and computer occupations—namely, systems analysts

and programmers—accounted for 12 percent each. A relatively large share of contract company employees were assigned to the public sector.

Tenure and contingency. A substantial share—about 40 percent—of contract company employees had been working for

their current client for more than a year. At the same time,

relatively few had lengthy spells in their employment relationship, a finding that is consistent with a comparatively

youthful labor force.

Employed persons in alternative work arrangements, by reason for

arrangement and sex, February 1995

 [Percent distribution]

Total, 16 years and older (thousands) .. 8,309 1,968 1,181

Percent ................................................. 100.0 100.0 100.0

Economic reasons ..................................... 10.0 47.4 64.7

Only type of work could find .................... 4.0 32.4 39.4

Hope job leads to permanent

employment ........................................... .6 8.5 17.9

Other economic reason ........................... 5.4 6.6 7.5

Personal reasons ....................................... 87.0 49.7 33.3

Flexibility of schedule .............................. 19.2 23.5 13.5

Family or personal obligations ................ 3.4 3.4 2.2

In school/training. .................................... .5 5.6 2.5

Other personal reason ............................ 63.9 17.2 15.1

Reason not available ................................. 3.1 2.9 1.9

Men, 16 years and older (thousands) ... 5,595 952 557

Percent ................................................. 100.0 100.0 100.0

Economic reasons ..................................... 10.3 56.8 75.4

Only type of work could find .................... 4.2 38.6 47.4

Hope job leads to permanent

employment ........................................... .6 9.2 18.3

Other economic reason ........................... 5.5 9.0 9.7

Personal reasons ....................................... 86.9 40.0 23.2

Flexibility of schedule .............................. 14.6 15.1 6.5

Family or personal obligations ................ 1.2 1.2 .4

In school/training ..................................... .3 5.0 3.1

Other personal reason ............................ 70.9 18.7 13.2

Reason not available ................................. 2.8 3.3 1.3

Women, 16 years and older

(thousands) ......................................... 2,714 1,015 624

Percent. ................................................ 100.0 100.0 100.0

Economic reasons ..................................... 9.2 38.6 55.2

Only type of work could find .................... 3.6 26.6 32.3

Hope job leads to permanent

employment ........................................... .4 7.8 17.5

Other economic reason ........................... 5.2 4.1 5.5

Personal reasons ....................................... 87.1 58.9 42.4

Flexibility of schedule .............................. 28.7 31.3 19.7

Family or personal obligations ................. 8.0 5.4 3.9

In school/training ..................................... 1.0 6.0 1.8

Other personal reason ............................. 49.4 16.2 16.9

Reason not available ................................. 3.7 2.6 2.6

NOTE: Details may not sum to totals because of rounding. Information on reason for alternative arrangement is not available for workers employed by contract companies.

Table 9.

Temporary

help agency

workers

On-call

workers

Independent

contractors Characteristic
42 Monthly Labor Review October 1996

Alternative Work Arrangements

Employed persons in alternative and traditional work arrangements, by

tenure in the arrangement and sex, February 1995

 [Percent distribution]

Total, 16 years and older

(thousands) ............................. 8,309 1,968 1,181 652 111,052

Percent ..................................... 100.0 100.0 100.0 100.0 100.0

Total reporting specific tenure ........ 98.3 96.8 96.8 97.9 86.9

1 year or less ................................ 17.1 45.4 72.7 50.5 22.5

Less than 6 months ................... 6.2 25.3 45.1 25.6 8.9

6 to 12 months ........................... 10.9 20.1 27.6 24.7 13.6

More than 1 year ......................... 81.2 51.3 24.0 47.4 64.3

Less than 4 years ...................... 16.5 21.8 16.0 21.0 16.5

4 to 9 years ................................ 25.1 19.3 6.4 16.3 23.8

10 to 19 years ............................ 23.4 6.5 .9 8.4 15.8

20 years or more ....................... 16.2 3.7 .8 1.7 8.3

Specific tenure not available .......... 1.7 3.2 3.2 2.1 13.1

Median tenure, in years ............... 6.9 2.1 .5 1.5 4.9

Men, 16 years and older

(thousands) ............................. 5,595 952 557 466 58,678

Percent ..................................... 100.0 100.0 100.0 100.0 100.0

Total reporting specific tenure ........ 98.1 97.1 96.6 98.1 85.9

1 year or less ................................ 14.7 41.7 71.8 47.4 21.6

Less than 6 months ................... 5.1 25.2 47.4 25.3 8.4

6 to 12 months ........................... 9.6 16.6 24.4 22.1 13.1

More than 1 year ......................... 83.4 55.4 24.8 50.6 64.4

Less than 4 years ........................ 15.5 23.1 15.6 23.6 15.8

4 to 9 years ................................ 24.2 18.1 8.2 15.7 22.7

10 to 19 years ............................ 24.4 7.5 .2 9.4 15.9

20 years or more. ...................... 19.2 6.7 .9 1.9 9.9

Specific tenure not available .......... 1.9 2.9 3.4 1.9 14.1

Median tenure, in years ................. 8.1 2.4 .5 1.6 5.3

Women, 16 years and older

(thousands) ............................. 2,714 1,015 624 186 52,373

Percent ..................................... 100.0 100.0 100.0 100.0 100.0

Total reporting specific tenure ........ 98.5 96.5 96.9 97.3 88.0

1 year or less ................................ 21.9 48.9 73.5 57.5 23.6

Less than 6 months ................... 8.4 25.3 43.2 26.3 9.4

6 to 12 months ........................... 13.4 23.6 30.2 31.2 14.2

More than 1 year ......................... 76.6 47.6 23.5 39.8 64.3

Less than 4 years ....................... 18.7 20.6 16.4 15.1 17.2

4 to 9 years ................................ 26.9 20.5 4.7 17.7 24.9

10 to 19 years ............................ 21.3 5.6 1.8 5.9 15.6

20 years or more ....................... 9.8 .9 .6 1.1 6.5

Specific tenure not available .......... 1.5 3.5 3.1 2.7 12.0

Median tenure, in years ................. 5.4 1.8 .6 1.3 4.5

NOTE: Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories. Details may not sum to totals because of rounding. For workers in traditional arrangements, estimates reflect tenure with the current employer. Median tenure was calculated only for those

who reported a specific tenure.

Contract company employees had a relatively low rate of

contingency. Under the broadest estimate of contingency, just

20 percent believed that their current assignment could not

continue for as long as they wished. Under the narrowest estimate, only 8 percent both believed that they could not work

for their employer indefinitely and had less than 1 year of

tenure.As would be anticipated, those

with longer tenure were more likely to

consider their jobs permanent. (Questions on preference and reasons for

working in alternative arrangements

were not asked of contract company

workers, due to the difficulties of

phrasing meaningful questions for that

group.)

Comparison with temporary help

agency workers. As discussed earlier,

the conceptual distinction between the

two types of intermediary arrangements

is somewhat blurred. Interestingly,

though, individuals who worked for a

contract company differed markedly

from temporary help agency workers in

a number of respects. Compared with

temps, contract company workers were

more likely to be male, white, at least

25 years old, and college graduates.

They also were more heavily represented in professional and service occupations and considerably underrepresented in clerical and machine

operator jobs, which dominate the temporary help work force.

Further, contract company workers

had been at their current assignment

much longer than temporary help

agency workers—1.1 years versus 0.3

year—and were more than twice as

likely to report that their assignment was

permanent. Judging from the magnitude

of the differences between the two

groups, it would appear that the distinction between contract companies and

temporary help agencies is meaningful

to workers in those arrangements.

On-call workers

An integral aspect of the job for most

workers is reporting to work according

to a fairly regular schedule. There are

exceptions, however: some workers report to work only

when they are asked to do so. These individuals are referred

to in this study as on-call workers. Once called to work, they

may stay in the assignment for just a day or for several days

or weeks in a row. On-call workers can supplement the

company’s regular work force when needed or fill in for an

Table 10.

Workers

in

 traditional

arrangements

On-call

workers

Independent

contractors

Tenure and sex

 Workers

provided by

contract

firms

Workers in alternative arrangements

Temporary

help

agency

workers
Monthly Labor Review October 1996 43

Total

With alternative arrangement:

Independent contractors ............. 8,309 (1

) 3.8 3.8 96.2

On-call workers ........................... 1,968 17.6 18.0 35.2 64.8

Temporary help agency workers . 1,181 39.4 48.0 66.5 33.5

Workers provided by

contract firms ............................. 652 7.7 11.7 19.8 80.2

With traditional arrangement .......... 111,052 1.6 1.8 3.6 96.4

Men

With alternative arrangement:

Independent contractors ............. 5,595 (1

) 3.1 3.1 96.9

On-call workers ........................... 952 20.7 21.4 40.8 59.2

Temporary help agency workers . 557 37.6 45.9 65.6 34.4

Workers provided by

contract firms ............................. 466 7.1 11.8 20.4 79.6

With traditional arrangement .......... 58,678 1.4 1.6 3.3 96.7

Women

With alternative arrangement:

Independent contractors ............. 2,714 (1

) 5.3 5.3 94.7

On-call workers ........................... 1,015 14.8 14.8 30.0 70.0

Temporary help agency workers . 624 41.0 49.8 67.3 32.7

Workers provided by

contract firms ............................. 186 9.1 11.3 18.3 81.7

With traditional arrangement .......... 52,373 1.8 2.1 4.1 95.9

1

 Not applicable.

NOTE: Noncontingent workers are those who do not fall into any estimate of contingent workers. Workers in traditional arrangements are those who do not fall into any of the alternative-arrangement categories.

Independent contractors, as well as the self-employed, are excluded from estimate 1.

Contingent and noncontingent workers, by work arrangement and sex,

February 1995

over the age of 64. They were somewhat less educated compared with

other workers: 22 percent had a college degree, 7 percentage points less

than the share of traditional workers.

There was an unusually large gender

gap with respect to education that was

reflected in the occupational profiles

of men and women in this arrangement, a point to be discussed shortly.

Among men, only 11 percent had a

college degree, compared with 31 percent of the women.

Another distinguishing characteristic of on-call workers is the large proportion who worked part time. More

than half (56 percent) of those on call

usually worked less than 35 hours per

week, compared with just 18 percent

of traditional workers. Women who

worked on call had an extremely high

incidence of part-time work (71 percent among adult women), much

higher than either their male counterparts (33 percent) or women working

in traditional arrangements (24 percent). Part-timers constituted the majority of on-call workers in every

major occupational group except precision production, craft, and repair.

While part-time work among traditional workers is typically voluntary,

in the case of on-call workers an unusually large share was part time for

an economic reason: about one-half of the adult men and onequarter of the adult women who worked part time would have

preferred full-time work. The large number of on-call employees who worked part time resulted in the shortest average workweek of any alternative arrangement—25.9 hours.

While found in a variety of occupations, on-call workers

were concentrated in several categories, with the men tending toward blue-collar work and the women toward selected

white-collar and service jobs. For men in this arrangement,

two categories accounted for 60 percent of employment: operators, fabricators, and laborers (especially truckdrivers,

freight and stock handlers, and laborers); and precision production, craft, and repair occupations (including carpenters,

electricians, and plumbers). In addition, a sizable number of

male on-call workers were substitute teachers and farm workers. Two other categories accounted for 60 percent of the

women: service occupations and professional specialty occupations. Service occupations with a large number of feTable 11.

Percent distribution

Contingent workers Total

(thousands)

Estimate 1 Estimate 2 Estimate 3

Noncontingent

workers

Work arrangement

and sex

absent employee. Some examples of workers who can be on

call are substitute teachers, nurses, and construction workers.

There were about 2.0 million people employed as on-call

workers in February 1995, making up 1.6 percent of all workers. (People with regularly scheduled work that might include

periods of being on call to perform work at unusual hours,

such as medical residents or computer technicians, were not

included in this category.)

Characteristics. On-call workers constituted the second

largest group of the four examined in this article, yet, up until

the February 1995 survey, little was known about these workers. According to that survey, slightly more women than men

were on-call workers, in contrast to traditional workers. More

than half of the women had at least one child under the age of

18, and nearly half of the mothers had a child under the age

of 6, proportions similar to those of traditional workers. Oncall workers were more likely to be under the age of 25 and
44 Monthly Labor Review October 1996

Alternative Work Arrangements

male on-call workers were food preparation (waitresses and

cooks), health services (nursing aides), and personal services

(child care and teachers’ assistants). Professional specialty

occupations included teachers and registered nurses. Also,

a substantial number of female on-call workers were office

clerks, sales clerks, and cashiers. The types of jobs they held,

foreshadowed by their divergent educational profiles, indicate that on-call work has quite different meanings for men

and women.

For men and women combined, elementary and secondary

school teachers accounted for 14 percent of all on-call workers; construction trades, transportation and material-moving

occupations, and handlers and laborers each made up about

10 percent. In most cases, on-call workers constituted a very

small share of the workers in an occupation. One notable exception was elementary school teachers, 10 percent of whom

worked on call. A large number of on-call workers were found

in the public sector, a major employer of teachers.

Tenure. While the length of time on-call workers spent in a

particular assignment was very short, their tenure in the arrangement was relatively long—a median of 2.1 years.

On-call employees who worked full time had been in the arrangement for 2.7 years, almost a year longer than part-time

workers. Those who worked part time voluntarily had a longer

tenure than those who worked part time for economic reasons

(2.1 years versus 0.8 year), presumably because those who

preferred to work more hours would be apt to change jobs.

Among the major occupational groups, workers in precision

production, craft, and repair had the longest tenure, 4.0 years.

Preference and contingency. A majority of on-call workers

would prefer a traditional job, although women were somewhat more satisfied with the on-call arrangement than men

were. Nearly 60 percent of the men gave an economic reason

for working on call, while a similar share of the women gave

a personal reason. Under the broadest estimate of contingency, about 35 percent of on-call workers felt that their jobs

could not continue as long as they wished, compared with

just 4 percent of traditional workers. Men had a higher incidence of contingency than women—41 percent, compared

with 30 percent. Interestingly, contingency was not closely

related to tenure: even those with a number of years in the

arrangement did not feel secure. (Nearly 1 in 5 contingent

on-call employees had worked on call for at least 6 years.)

Why on-call workers felt such a high degree of insecurity is

not obvious. It may be that some of the jobs which tend to be

on call, especially construction trades and services, are relatively sensitive to factors such as consumer demand and business failures and are inherently less stable. It may be, too,

that even in relatively secure fields, on-call jobs are often set

up to be temporary rather than permanent positions.

IN CONCLUSION, the results of the Bureau's first survey on

alternative work arrangements illustrate the difficulty of generalizing about people in such arrangements. For example,

workers in the largest category, independent contracting, had

high levels of education and job security. Contract company

employees, while a much smaller group, shared these characteristics. On the other hand, temporary help agency employees and on-call workers had less education, as well as

less job security, than other workers. While the nature of

employment relationships is bound to be the subject of ongoing analysis, these data make clear that intermediated, irregularly scheduled, or consulting jobs are not necessarily perceived as unstable by the workers who hold them.

Footnotes

1

 The CPS, the major source of information on employment and unemployment, is a sample survey conducted monthly for the Bureau of Labor

Statistics by the Bureau of the Census. The sample consisted of 56,000 households in February 1995. A combination of in-person and telephone interviews is used; the respondent can be any knowledgeable member of the household aged 15 or older. Periodically, supplementary questions are added

to the basic CPS questionnaire to elicit information on selected characteristics of workers. In February 1995, the first supplement on contingent and

alternative work arrangements was conducted. All employed persons, except unpaid family workers (a very small group numerically), were included

in the supplement. For persons holding more than one job, the questions

referred to the characteristics of their main job (the one at which they worked

the most hours). Because this was a one-time survey, it was not possible

to assess the effect of seasonal variation on the estimates of alternative arrangements or to determine whether such arrangements have become more

common.

2

 Information from the 1995 survey was released initially as Contingent

and Alternative Work Arrangements, Report 900 (Bureau of Labor Statistics, August 1995). An additional analysis of these and other data on job

security appeared in Report on the American Workforce (U.S. Department of

Labor, 1995), chapter 1.

3

 See Anne E. Polivka’s article on pages 3–9, this issue, which presents

three estimates of contingency based in part on actual and expected job tenure. For the theoretical underpinnings of the concept of contingency, see

Anne E. Polivka and Thomas Nardone, “On the definition of ‘contingent

work,’ ” Monthly Labor Review, December 1989, pp. 9–16.

4

 It may be tempting to classify independent contractors who were identified as wage and salary workers in the main questionnaire as workers who

otherwise would have been employees of the company for which they were

working or individuals who were “converted” to independent contractors to

avoid legal requirements. However, the basic CPS questionnaire does not permit this distinction. Two individuals who are in exactly the same work arrangement may answer the question from the main questionnaire—“Were

you employed by government, by a private company, a non-profit organization, or were you self-employed?”—differently, depending on their interpretation of the words “employed” and “self-employed.” It was not possible

with the CPS supplement to collect information on the legal aspects of employment arrangements. 5 Owners of an incorporated business generally are considered paid employees of the business. In the basic CPS questionnaire, therefore, they are

classified as wage and salary workers rather than as self-employed. In the

February 1995 supplement, however, all independent contractors were asked
Monthly Labor Review October 1996 45

the complete set of questions about the characteristics of their business, regardless of their classification on the basic questionnaire. 6

 See two articles by John E. Bregger in the Monthly Labor Review: “SelfEmployment in the United States, 1948–62,” January 1963, pp. 37-43; and

“Measuring self-employment in the United States,” January/February 1996,

pp. 3–9. 7 See Wayne Howe, “Temporary help workers: who they are, what jobs

they hold,” Monthly Labor Review, November 1986, pp. 45–47, for an earlier study of workers in the temporary help supply industry based on a special supplement to the CPS in May 1985. The findings are not directly comparable with those from the February 1995 survey, as different questions

were asked. Also, see Anne E. Polivka, “Are Temporary Help Agency Workers Substitutes for Direct Hire Temps? Searching for an Alternative Explanation of Growth in the Temporary Help Industry,” paper presented at the

Society of Labor Economists Conference, Chicago, May 3–4, 1996. Kevin

D. Henson, Just a Temp (Philadelphia, Temple University Press, 1996);

Maureen Martella, Just a Temp: Expectations and Experiences of Women

Clerical Temporary Workers, report prepared for the U.S. Department of

Labor, Women's Bureau, November 1991; and Jackie Krasas Rogers, “Just a

Temp: Experience and Structure of Alienation in Temporary Clerical Employment,” Work and Occupations, May 1995, pp. 137–66, provide views of

the industry primarily from the temporary workers’ perspectives. 8

 Martha I. Finney and Deborah A. Dasch, A Heritage of Service: The

History of Temporary Help in America (Alexandria, VA, National Association of Temporary Services, 1991). 9

 Lonnie Golden and Eileen Applebaum, “What was Driving the

1982–88 Boom in Temporary Employment?” American Journal of Economics and Sociology, October 1992, find evidence for a demand-driven boom;

Karylee Laird and Nicolas Williams, “Employment Growth in the Temporary Help Supply Industry,” Journal of Labor Research, Fall 1996, pp. 663–

81, find both demand factors (especially economic growth and foreign competition) and supply factors (particularly the increasing labor force participation of married women) to be significant.

10 Steven Pearlstein, “Business and the Temp Temptation: A Permanent

Situation,” The Washington Post, Oct. 20, 1993, pp. C11, C15.

11 Henson, for instance, interviewed several actors and musicians whose

stints with temporary help firms served as “day jobs.” (See Henson, Just a

Temp.)

12 Growth in Temporary Help Reflects the New Way Americans Find Jobs,

news release, National Association of Temporary and Staffing Services, Dec.

20, 1995.

13 Golden and Applebaum, “The 1982–88 Boom in Temporary Employment.”

14 Factsheet on Black and Hispanic Workers (Bureau of Labor Statistics,

April 1996).

15 For an analysis of the temporary help supply industry based on data

from the CES survey, see Max L. Carey and Kim L. Hazelbaker, “Employment growth in the temporary help industry,” Monthly Labor Review, April

1986, pp. 37–44.

16 Standard Industrial Classification Manual, 1987.

17 Richard S. Belous, The Contingent Economy: The Growth of the Temporary, Part-Time and Subcontracted Workforce (Washington, National Planning Association, 1989).

18 Janice D. Murphey, Business Contracting-out Practices, Summary

87–8 (Bureau of Labor Statistics, November 1987).

19 John Tschetter, “Producer services industries: why are they growing so

rapidly?” Monthly Labor Review, December 1987, pp. 31–40.

20 Katharine G. Abraham and Susan K. Taylor, “Firms’ Use of Outside

Contractors: Theory and Evidence,” Journal of Labor Economics, July 1996,

pp. 394–424.