Point Lookout: a free weekly publication of Chaco Canyon Consulting
Volume 25, Issue 23;   June 4, 2025: White-Collar Contractor Sabotage

White-Collar Contractor Sabotage

by

Modern firms in competitive, dynamic markets draw on many types of employer/employee relationships, including contractors. By providing privileges and perks preferentially among these different types, they risk creating a caldron of resentments that can reduce organizational effectiveness.
Pair of Wooden Shoes [right] (Sabots)

Pair of Wooden Shoes (Sabots) [right]. A story widely repeated, and authoritatively debunked, is that during a nineteenth-century labor dispute in France, workers disrupted production by throwing wooden shoes (sabots) into machinery, hence the word, sabotage. The word actually comes from the slang term for an inferior tool or laborer, because those people wore sabots. [Shipley 1967]

Image of two sabots by Paul Gaugin (1848-1903) ca. 1889/1890, courtesy U.S. National Gallery of Art.

Although the term white-collar is outdated and inaccurate, the designation it implies is current and thriving. To work in a white-collar role in the nineteenth and most of the twentieth centuries was to perform professional service, desk, managerial, or administrative work. [Lepore 2014] Today, that description of white-collar work is still apt, though many white-collar workers no longer wear white collars, or, indeed, any collars at all.

Contracting, as a business practice, doesn't trace back nearly as far as detachable white collars. But for decades, in a long-term trend, contractors have been increasing as a share of the white-collar workforce. Contracting is especially significant in technology-driven industries, where rapid change creates short-term needs for people with specialized knowledge. The short-term need can be so short in duration that hiring a direct employee (DE) to meet that need entails a financial commitment for the employer that outlasts the need. Hiring a contractor employee (CE) can meet the short-term need while avoiding the longer-term financial commitment that accompanies hiring DEs.

The long-term effects of meeting short-term needs by means of contractors

As a consequence of hiring CEs to meet short-term needs, the white-collar workforce can come to consist of a mix of workers of different kinds of Employer/Employee relationship. At Google, for example, the mix is generically called TVCs (Temps, Vendors, and Contractors). [Bergen & Eidelson 2018] No doubt other firms have different terminology. But for the present purpose I focus only on DEs and CEs.

When many employers compete for top talent, one result has been explosive growth in value and variety of benefits and "perks." Examples of what employers have been offering direct employees are:

  • They pay DEs more than contractors receive (net of agency fees)
  • They provide DEs a complete benefits package including health insurance, paid time off, retirement plan, on-campus fitness facility, on-campus child care, and so on; CEs receive no benefits
  • They provide DEs free bus service to and from work, but charge CEs a fare to ride the same buses
  • DEs wear white badges, while CEs wear red badges
  • CEs are barred from some parts of company facilities; DEs have free access
  • Free food and refreshments for DEs; nothing or for-a-price for CEs
  • Sandwiches for DEs at the "lunch and learn" seminars; nothing for CEs
  • Signing bonuses for new DEs
  • Valet services for DEs
  • Incentive gifts to incumbent DEs who help recruit new DEs

Some of these examples are extreme, but even the extreme examples can be common in some industries, depending on market conditions.

Over time, the firm accumulates a number of people in different categories with differing levels of access to perks. It isn't unusual to find teams composed of both DEs and CEs, or project teams of mostly DEs led by a CE project manager.

The problems of managing variety

Mixing categories of workers, by itself, might be workable. But because preferential treatment of DEs is such a widespread practice, forming workgroups of mixtures of employee categories tends to produce mixtures of compensation, perks, and benefits packages for people supposedly collaborating to achieve a shared objective. The usual result is a combination of CEs with DEs, and preferential treatment of DEs. And that's a high-risk combination, because we expect them to work together as equal partners, but preferential treatment makes some partners "more equal" than others.

Offering preferential treatment to employees of one category (usually DEs) can lead to perceptions that the people in that preferred category are better people. And implicitly, it can also lead to perceptions that people in non-preferred categories are lesser people. Preferential treatment thus creates a caste system.

Last words

Letting a caste system be visible makes for management problems because visible preferential treatment adds four combustible elements to the mix: jealousy, envy, hope, and aspiration. Those who aspire to DE positions but who currently occupy CE positions might experience jealousy or envy. When these people feel that they're qualified for DE positions, or when they feel that they are more qualified than those who currently occupy DE positions, their perception of unfairness or injustice can turn jealousy or envy to anger. In acts of passive sabotage, they might withhold contributions they might otherwise make. Some might adopt a work-to-rule stance, carrying out assigned tasks at a minimum level of performance, thinking to themselves, "If they value me at a minimal level, I'll perform at a minimal level." And so, preferential treatment of DEs creates low performance among CEs. Go to top Top  Next issue: More Things I've Learned Along the Way: VII  Next Issue

52 Tips for Leaders of Project-Oriented OrganizationsAre your projects always (or almost always) late and over budget? Are your project teams plagued by turnover, burnout, and high defect rates? Turn your culture around. Read 52 Tips for Leaders of Project-Oriented Organizations, filled with tips and techniques for organizational leaders. Order Now!

Footnotes

Comprehensive list of all citations from all editions of Point Lookout
[Shipley 1967]
Joseph Twadell Shipley. Dictionary of Word Origins. New York: Philosophical library, 1945. 1967 Edition. Order from Amazon.com. Back
[Lepore 2014]
Jill Lepore. "Away from My Desk" column in the May 5, 2014, edition of The New Yorker 100 Newsletter. Available here. Retrieved 18 May 2025. Back
[Bergen & Eidelson 2018]
Mark Bergen and Josh Eidelson. "Inside Google's shadow workforce," Seattle Times, July 29, 2018. . Available here. Retrieved 18 May 2025. Back

Your comments are welcome

Would you like to see your comments posted here? rbrenaXXxGCwVgbgLZDuRner@ChacDjdMAATPdDNJnrSwoCanyon.comSend me your comments by email, or by Web form.

About Point Lookout

This article in its entirety was written by a 
          human being. No machine intelligence was involved in any way.Thank you for reading this article. I hope you enjoyed it and found it useful, and that you'll consider recommending it to a friend.

This article in its entirety was written by a human being. No machine intelligence was involved in any way.

Point Lookout is a free weekly email newsletter. Browse the archive of past issues. Subscribe for free.

Support Point Lookout by joining the Friends of Point Lookout, as an individual or as an organization.

Do you face a complex interpersonal situation? Send it in, anonymously if you like, and I'll give you my two cents.

Related articles

More articles on Conflict Management:

Hiding from the truthThe High Cost of Low Trust: II
Truly paying attention to Trust at work is rare, in part, because we don't fully appreciate what distrust really costs. Here's Part II of a little catalog of how we cope with distrust, and how we pay for it.
A lizardfish in a typical poseStonewalling: I
Stonewalling is a tactic of obstruction used by those who wish to stall the forward progress of some effort. Whether the effort is a rival project, an investigation, or just the work of a colleague, the stonewaller hopes to gain advantage. What can you do about stonewalling?
John C. Calhoun (1782-1850), seventh Vice President of the United StatesImpasses in Group Decision Making: I
Groups sometimes find that although they cannot agree on the issue at hand in its entirety, they can agree on some parts of it. Yet, they remain stuck, unable to reach a narrow agreement before moving on to the more thorny areas. Why does this happen?
Monarch butterfly (top) and Viceroy (bottom)Three Levels of Deception at Work
Deception in workplace politics is probably less common than many believe. Still, being ensnared in a deception can be a costly and upsetting experience. A valuable skill is recognizing the three types of deceptions: strategic, operational, and tactical.
A roaring lion, a metaphor for what can happen when comments on the work of another lead to toxic conflictCommenting on the Work of Others
Commenting on the work of others risks damaging relationships. It can make future collaboration more difficult. To be safe when commenting about others' work, know the basic principles that distinguish appropriate and inappropriate comments.

See also Conflict Management for more related articles.

Forthcoming issues of Point Lookout

A screenful of codeComing July 2: The True Costs of Contractors
Among the more commonly cited reasons for hiring contractors instead of direct employees is cost savings. But are these savings real? Direct compensation, including perks and benefits, might favor the contractor arrangement, but indirect costs tell another story. Available here and by RSS on July 2.
Mark Twain in 1907And on July 9: On Being Seriously Funny at Work
Humor is such a valuable tool at work that it ought to be recognized as an official contribution by team members who provide the laughs that keep some teams from auto-destructing. Even if you're not known for bringing the funny, there are a few simple techniques that can change your image. Available here and by RSS on July 9.

Coaching services

I offer email and telephone coaching at both corporate and individual rates. Contact Rick for details at rbrenaXXxGCwVgbgLZDuRner@ChacDjdMAATPdDNJnrSwoCanyon.com or (650) 787-6475, or toll-free in the continental US at (866) 378-5470.

Get the ebook!

Past issues of Point Lookout are available in six ebooks:

Reprinting this article

Are you a writer, editor or publisher on deadline? Are you looking for an article that will get people talking and get compliments flying your way? You can have 500-1000 words in your inbox in one hour. License any article from this Web site. More info

Follow Rick

Send email or subscribe to one of my newsletters Follow me at LinkedIn Follow me at Bluesky, or share a post Subscribe to RSS feeds Subscribe to RSS feeds
The message of Point Lookout is unique. Help get the message out. Please donate to help keep Point Lookout available for free to everyone.
Technical Debt for Policymakers BlogMy blog, Technical Debt for Policymakers, offers resources, insights, and conversations of interest to policymakers who are concerned with managing technical debt within their organizations. Get the millstone of technical debt off the neck of your organization!
Go For It: Sometimes It's Easier If You RunBad boss, long commute, troubling ethical questions, hateful colleague? Learn what we can do when we love the work but not the job.
303 Tips for Virtual and Global TeamsLearn how to make your virtual global team sing.
101 Tips for Managing ChangeAre you managing a change effort that faces rampant cynicism, passive non-cooperation, or maybe even outright revolt?
101 Tips for Effective MeetingsLearn how to make meetings more productive — and more rare.
Exchange your "personal trade secrets" — the tips, tricks and techniques that make you an ace — with other aces, anonymously. Visit the Library of Personal Trade Secrets.
If your teams don't yet consistently achieve state-of-the-art teamwork, check out this catalog. Help is just a few clicks/taps away!
Ebooks, booklets and tip books on project management, conflict, writing email, effective meetings and more.