[ivenkys]

I am not sure why this is not self-evident.

Practical Definitions: An Employee is part of the liability on a company's balance-sheet, its a cost to be pruned when the going gets tough. IN any large company worth its name he is just a number on the wrong side of the Balance Sheet, how good/loyal he is almost completely irrelevant.

A Contractor is a resource and his cost comes from the Project's budget. A manager's position is strengthened by managing ever larger(read costlier) projects , it is in the manager's interest to have more resources(read contractors). End Definitions.

Contractors by their very nature have no say in the corporate political power game thereby not threatening a manager's position. If something doesn't work out and its time for a scape-goat , contractors can very easily be dismissed , letting go of an employee is a much more onerous task.Given a choice a Manager will almost always opt for a contractor and to top it all of Contractors earn more cash.

Why would one want to be an employee in any large corporate entity ?

[cookiecaper]

"Given a choice a Manager will almost always opt for a contractor and to top it all of Contractors earn more cash."

This hasn't been my experience at real-world medium-size companies around here. I have friends in several, but almost everyone's IT department has a VP or director that has a policy of "absolutely no contractors", so I can't get a foot in the door at any of these places. If they want something done, they _only_ do it internally. They will buy outside products, but they will not outsource development work.

The other medium-big companies in the area have contracts with big groups like RHT or EDS, which is really frustrating and annoying.

[gaius]

Well, the reasoning behind this is obvious. What is the value of a high tech company? It's not "the brand", it's not that it owns a pile of servers in a datacentre somewhere, it's not even in the code in its version control. It's that it is a group of people able to identify and solve new and commercially relevant problems, and that that group possesses a great deal of institutional knowledge. A contractor has self-consciously decided to discount that kind of knowledge; therefore what they can contribute in such an environment is only what could be automated anyway.

[ivenkys]

My experience has been mainly with large/very large Financial institutions and this is almost always the case.

Manager gets money for Project , hires contractors , if project deemed successful , more money, more contractors , if project deemed failure , fire contractors move on. Cycle repeats.