How To Navigate Organizational Practices When Contracting Becomes Just Another Form Of Exploitation?

Today's question will take a bit of a different format due to the submitter providing the following backstory:

I've always struggled with the relationship between contractors and the organization that I work with. In the beginning of my career, it felt more straightforward: we hired contractors to help with a set scope of work for a set duration (e.g. a client event, a complex product photo shoot, just-in-time training for staff on a new technology). As time passed and I moved up the ladder, things got more complex. Namely, contract roles have been frequently used to "try out" a candidate or to hire for necessary roles during a period of uncertainty. Only rarely in the past 8 or so years have I used contractors on a specific scope for a defined duration - in that case it was for an area of the business that was unsure as to whether their product had legs enough to justify full time staff. (I have to point out that time and my progression are confounds - I can't say if attitudes have changed in the 20 years that I've been in tech or that I'm more privy to the details.)

Question:

Am I overthinking this? How can we do better?

While I see no issue with the idea of contractors for defined contexts, I don't agree with hiring contractors to "try out" a candidate or fill necessary roles when there is not funding for full-time head count available. It feels exploitative since the intent is to fill a role with minimal risk to the enterprise. If the candidate doesn't work out, or if funding gets tight, the enterprise can fire contractors without any severance or other fiscal obligation. If the contractor *does* work out, but funding is still iffy (or there's some organizational policy dictating a contractor/full-time ratio), they remain contract... often for a year or more. This latter situation really pisses me off – that's a year+ of relying on someone to do a role (not a task) without providing them meaningful development or coaching (since that's illegal) or benefits of full-time employment.

B-side question: Did you know that there are contract agencies that prohibit their contractors from converting to full time for the company they are contracted out to? WTF even is that about? How is THAT morally OK?

Answer:

The "independent" contractor/industry relationship has sadly drifted from bringing in someone with specific knowledge and skills to solve a project/scope-bound issue to these individuals being treated as "employees" without the benefit of organizational employment. This shift has played an outsized role in jeopardizing the true meaning and reasoning for enlisting the services of someone with domain expertise. Blurring the line between an ethical, equitable practice and one that seeks to exploit.

I'm intentionally choosing to define "independent" contractors as someone with specific domain expertise because it enables me to cast a wide net while still having defined limitations. This is an intentional effort to acknowledge how domain expertise manifests, from executive leadership to data analytics to curriculum development and so much more. However, it should not be treated as a cheap way to manage the roles and responsibilities within an organization that would be better fitted, logistically and legally, with hiring employees. And it should never, which is a word I seldom use, become a practice that enables organizational leaders to get around industry and employment laws and protections. Building the supremacy-, coercion-, discrimination-, and exploitation-free world that we say we want to experience means that those in organizational leadership must develop a practice that evaluates EVERY decision through this lens, which is NOT a simple undertaking.