Abstract/Summary

The construction industry is one of the largest and most complex industrial sectors in the UK. The industry's failure to adopt progressive human resource (HR) practices is routinely blamed on the challenges of operating in a fragmented, project‐based environment reliant on subcontracting. This research examines the extent to which existing HR theory accounts for the particular employment context of project‐based organisations operating in volatile markets. Drawing upon case study research from two different divisions within a large contracting firm, this article explores the extent to which different contracting arrangements impinge on attempts to reposition human resource management (HRM) as a strategic function along the business partnering model. Elevating the role of the HR function is found to be difficult to reconcile with the concurrent demands of managing multiple forms of employment arrangements. The research reveals a need for HRM models that account for the specificities of complex, differentiated organisations that operate in multiple environments.