It starts with a staff shortage while scaling up, or a small project that current employees don't have capacity for.

The execs have a decision, find and hire a long term employee(s), train them up, make sure it's a good culture fit, and pay their benefits and compensation

or get a contractor firm to fill seats and pay the contract.

It's all downhill from there once they pick a contracting firm.

The contracting firm is a Trojan horse for the short term philosophy, while also eroding away the skill pipeline of raising juniors to senior talent so the company eventually has to keep going back to firms.

Instead of scaling up and building the knowledge pool as the company grows organically, they want to massively scale up and down and cycle through many people and skim the good contractors off the top. But this does not work.

The bad contractors overflow the org with tech debt. Seniors don't have juniors to train, nor do they work on the core stuff to keep their skills. The seniors and good contractors skimmed off the top turn into contractor babysitters. The juniors don't exist. The seniors eventually turn into managers or leave for greener pastures where their original skills are wanted and respected and fostered.

Eventually the company is left a husk of past talent and mountain of tech debt, and no in-house skill to turn things around, so the options are to stay with contracting indefinitely or start at ground 0.

Combined with not increasing wages to match cost of living and inflation, not giving bonuses when there profits, and now you've got most of corporate America with their burnt out workforce skeleton crew.