Not arguing whether it's good/bad, but it comes with the territory in the current landscape. You gain in flexibility/autonomy but loose in benefits/treatment.
That set the framework for all contracting that has followed since.
There are a whole lot of different situations that get swept under the TVC umbrella:
- Qualified to work at a firm in their core competency, but bureaucracy makes hiring you hard (e.g. hiring freezes, long interview periods, etc.) You can often make more than an FTE in this position.
- Trying to get your foot-in-the-door and taking any job you can get, regardless of pay. This is the situation you hear about in articles like this one. The pay's probably not great, and you spend all your time working harder than anyone else there to become a "real boy" (FTE).
- Jobs that the company won't admit are valuable, but needs anyway (like testers). You get yo-yoed (in for 2 years; out for 6 months) because the company won't offer these roles to full-time employees, and doesn't want you retroactively deemed one.
- Food/security/massage staff - people who work on-site, but not in a core competency. These jobs are often blue-collar in the outside world, so access to perks like free food and regular clientele who you can form personal relationships with (e.g. other staff) might make these jobs nicer than alternatives serving the public. At the same time, many of these jobs used to be full-time. Moving non-sales, non-product jobs to vendors feels like a regression in treating people like humans, and a thinly-veiled exploitation of a loophole in employment policy.
- Totally external vendors - people like financial auditing, network operations, etc. They have access to internal systems, but operate in clearly defined roles-of-responsibility offsite. I presume the granularity for these roles is whole agencies, rather than individual workers. They fall under the TVC umbrella, but workers have a more clear working relationship with the agency than the other scenarios.
Also note that this path is only available for white collar workers. There aren't any full-time positions available for janitors, cafe workers, security guards, etc., as big companies tend not to employ those positions directly as it's outside their wheelhouse.
A conversion requires interviews (2-3). Candidates usually get statements of support from their team colleagues, which has quite an impact during the hiring committee discussion.
E.g. I'd reckon it's easier passing via the tvc->fte route.
Here, there was no difference on how FTEs and contractors were treated (including company outings, which was very nice) with team composed of both FTEs and contractors. This situation is close to illegal here (I think) as contractor are supposed to be brought only for a specific job that can't be done by a FTE; but since it worked for everyone, no-one is complaining.
Sure it happens, but it's mostly to string along suckers.
Maybe you're confusing temps with employees though; in that case, it is possible but the temp agency will demand a fee. It works the same with consultants, for who the fee will be much higher (think 2-3x their annual wage).