The stigma of a series of short employment stints on a resume allows one's willingness to "commit" to a full-time job to serve as a signaling mechanism. Becaus

The stigma of a series of short employment stints on a resume allows one's willingness to "commit" to a full-time job to serve as a signaling mechanism. Because the potential hire knows he will incur a cost for leaving the job too soon, he must therefore think his likelihood of departure to be relatively low if he accepts the role. Either that, or he's really desperate and has applied a high discount factor to the longer-term resume hit. "Consulting" is just a bi-directional signal that only short-term commitment is required (and from a legal standpoint, a transfer of risk to the contractor). I once worked for a company which, by implying through its actions that life-long employment was possible, was able to convince IT employees to accept new roles such as software maintenance that would have a detrimental medium-term effect on their employability elsewhere. To keep up this system of incentives, inept long-timers were put out to pasture rather than fired -- a signal to those fearing market irrelevance that their own risks were bounded. Offenses entirely under one's own control such as stealing would still result in termination; Because others would not change their own risk assessments as a result and the company had to deter others from such mis-deeds, similar signaling was not required. It was notable that those put out to pasture could end-up fired later if they complained too much about their newfound state of affairs -- a strong signal to shut up and take it. Needless to say, this was not a happy place.