The Permatemps Contretemps

Some permatemps kept working at Microsoft simply because staying was easier than leaving and trying to find a new job at a different company; others remained with hopes of landing a full-time job. Either way, Cheirrett thinks that her agency played a useful role. "These were not people who would have been good at marketing themselves or at negotiating their own rates," she says. "Our agency handled payroll and benefits for them, and gave them easy access to new assignments if they needed it."

And, says Cheirrett, the setup became more and more convenient for Microsoft as well. "In the old days, much of the demand for technical writers really was seasonal," she explains. "They would jam stuff through during the summer in order to get it out in time for Comdex in the fall, and then they would lay everybody off and go into hibernation for the winter." But as Microsoft expanded its offerings, demand grew for year-round help writing manuals and other technical documents. And individual projects became more complex. "It took three years to write the first version of Exchange, the email program that eventually became Outlook," Cheirrett says. "We had contractors actually bailing out of that one because they didn't want to continue working on such a stressful, troubled product. They wanted to go somewhere else and have a better time."

In the early-to-mid-1990s, with all of this activity going on, Microsoft did hire more full-time technical writers, but the demand for Cheirrett to provide more contract writers also increased. Why didn't Microsoft simply hire more of those writers on a full-time basis? To Cheirrett, the answer lies in the company's DNA. "Microsoft is a hacker culture," she says. The company has always valued people with programming smarts above all else -- followed by those with the marketing skills to find millions of customers to buy the company's software products. "For people who have talent, our doors [to full-time work] are open," Bill Gates told the Los Angeles Times in 1997, commenting on the permatemp controversy. To many temps, Gates's comments confirmed the company's internal division that put programmers at the top -- and assigned to interchangeable temps the lowly tasks of writing manuals and creating content for the company's Web properties.

Cheirrett began to notice that her firm's role in the labor market was changing. It went from being a technical-communications company to being a human-resources services company, and those services were becoming a commodity. "Our profit margins were already around 5%, and we didn't want to see what might happen if competitive pressure pushed them lower," she says.

So, in 1997, Cheirrett and her husband, with whom she owned WASSER, sold the company and signed a three-year contract with the new owner that would allow her to run the agency during the transition. She did not renew her contract this year, and she plans to spend the next several months as a free agent herself.

Her first two self-appointed tasks: researching cutting-edge human-resources policies and studying the Hollywood model of deploying independent professionals. "I can't believe that I haven't looked into this until now," she says. "That model could serve as an example of what to do in the tech world."

Sharon Decker: The Permatemps Director

This is not a morality tale or a Hollywood movie with heroes and villains -- which is why inside Microsoft's verdant corporate campus, you will not find a snarling executive who is responsible for keeping "those lowly temps" down. Instead, for the past three years, the director of contingent staffing has been Sharon Decker, herself a former Microsoft temp who did a three-month stint in customer service in 1985. Decker, 55, began her full-time Microsoft career in sales support, moved on to marketing, and then landed in human resources in the late 1990s.

Three years ago, she moved into her current job. "We are a company that's always been good at technology," she says. "And at that point, we had become a fully grown-up company, so I thought that the human-resources department might benefit from some fresh perspective. It seemed as if the next logical thing for me to do was to try to make change happen by working with people."

At the time, Microsoft's policies on the employment of temporary workers had not changed much since 1989, when the IRS first identified the issue of tax withholding and long-term contractors. To Decker, Microsoft's solution of sending its temps to staffing agencies was neither a grand strategy nor a nefarious plot. It was just a way of going about the company's business. "To my knowledge, there was no 'big decision' where people sat in a room and said, 'This is how we are going to staff the company, and this is why we're going to do it,' " she says. "We've just always wanted to maintain flexibility and to avoid big fluctuations in the number of full-time workers."