LABOR FORCE EXTERNALIZATION IN GROWING FIRMS

Organizational staffing strategies are turning increasingly to workers removed from the core workforce, a practice known as externalization. Our survey of 153 growing firms examined environmental and organizational predictors of three forms of externalization: part‐time workers, temporary workers, and work‐at‐home arrangements. The results indicated that firms externalize in response to labor market conditions, although the predictive role of labor market forces varied across externalization forms. Various employee‐centered human resource management policies were associated with externalization practices, and there was evidence that internal labor market policies are negatively associated with externalization. Findings are discussed in terms of externalization strategies and implications for future research.