The Permatemps Contretemps

But as the move played out, it had both unforeseen and unfortunate consequences. By the time Decker started her job overseeing the temps in 1997, there was clear dissension in the ranks over Microsoft's personnel policies. At that point, the class-action suit that was filed by the temps had been wending its way through the legal system for five years, publicly pitting the company against a number of independent contractors who worked in its Seattle-area offices. The effect on morale was subtle but profound.

Decker knew that the time had come to make major changes in her company's culture. At the same time, she knew that there were certain things that she simply could not fix. Take, for instance, seemingly trivial -- and presumably easy-to-change -- rules that restrict temps from using the company's ball fields. Because the temps are not on the company payroll, Decker says, Microsoft's insurance company will not permit it to allow its contract workers to use its corporate ball fields or to get a free membership at a local gym through Microsoft's benefits program. As for policies that would exclude temps from bowling nights or forbid them from buying software at the company store, those were generally set by Microsoft's lawyers specifically to enable the courts to see a clear line between full-time employees and contract workers.

Decker eyes the party line carefully. "If agency employees want to participate in parties and outings, they need to ask their employers to contribute to the cost of their attending," she says. "Rarely have we been turned down when we've asked one of the agencies to do that." Decker has also approached the personnel firms about providing temps with discounts at the Microsoft store so that they wouldn't have to pay full price for the products that they had helped create. "We should have done it before now," she says.

In other areas, Decker has had more leeway to improve the standing of temporary workers at the company. In 1998, for example, she instituted a platform of changes that requires every temp agency that works with Microsoft to pay for at least half of a temporary worker's medical and dental insurance, to give workers at least 13 paid days off each year, to grant them at least $500 worth of training annually, and to establish a retirement-savings plan with at least some matching contribution from the agency. And, for the first time, all temps in every job category have a choice between at least two agencies that they can sign up with. "If you're going to use a contingent workforce, then you need to make sure that there's a safety net in place for those workers, and you need to underwrite the costs associated with that net," Decker says, noting that Microsoft now pays 20% more per worker to agencies than it did just a year ago.

This year, clearly tired of bad press and union pressure and wanting to put the lawsuit behind them, Decker and Microsoft declared that permatemps will no longer be fixtures on company grounds. Most recently, the company announced that it would not allow anyone to work as a temp at the company for more than a year. Once contractors hit the 365-day mark, they must take 100 days off before working for the company again. Decker insists that she'll strictly enforce this policy -- a departure from past performance -- and the announcement has compelled Microsoft managers to make tough decisions about which positions are truly temporary.

"They're going to have to map out each assignment and determine whether it has the characteristics of a regular, long-term position that fits into their long-term strategy," Decker says. "Are they part of an emerging group in a growth area, or a mature area that's downsizing? What sort of unique skills might they need year-round?"

As Microsoft creates more full-time jobs as a result of this analysis, many of those positions are open to contract workers. At any given time, Microsoft has about 3,000 openings for full-time jobs, and Decker figures that at least 40% of those jobs will go to former temps this year. Another result, however, could be that contractors who never wanted full-time jobs will be unable to string together one temp position after another. "It's unfortunate," Decker says. "But we have no other way to really make sure that people are filling positions in a manner that makes them true temporary employees."

Given that the courts have taken eight years (and counting) to figure out when a job that's labeled as temporary is actually a full-time position, it's hard to expect Microsoft or any other company to sort out such matters without continued experimentation. In the meantime, Decker thinks that the company deserves some credit for trying harder to make itself hospitable to everyone. "We haven't done a good enough job of telling people what we're looking for and what we're trying to do," she says. "We want temps to be in temporary assignments, and if it turns out that those assignments require long-term work, then we want to make those jobs permanent. We want people to choose to work for us and to like us -- no matter what sort of career they're thinking about. We'd like to think that we can offer the best of both worlds."

Ron Lieber (Rlieber@fastcompany.com) is a senior writer at Fast Company. Some of his best friends have been Microsoft permatemps.