Use labour hire firms, cut costs
Nov 21, 2010
SINCE the early 90s more and more companies, especially in the Western world, have discarded a big part of their traditional workforce and use labour hire companies to provide their staff. <br>
HR Insight with Paul Kyabaggu Mukama
SINCE the early 90s more and more companies, especially in the Western world, have discarded a big part of their traditional workforce and use labour hire companies to provide their staff.
It is a very popular way to find permanent staff and an attractive option to use during periods of seasonal peaks and business surges in general.
Labour hire is an arrangement whereby a labour hire company or agency provides workers to a client or host, but the labour hire firm takes care of the workers’ remuneration. It is outsourcing of skilled and unskilled workers for short or long-term positions.
The workers, known as contractors, field employees, field team members, temps, on-hired employees or just employees, are employed by the contract labour organisation. They are not employed by the company (client) to whom they provide labour.
They are screened in accordance with a job description and assigned to roles within the host employers’ organisation as per a request.
The employee works under the practical day-to-day direction of the host employer, but is paid by the labour hire firm. The client firm pays a contract fee to the agency for the provision of that labour.
The advantages of using labour hire include provision of a flexible workforce to meet peaks in demand, enabling firms to maintain a core workforce with the capacity to fill up staff gaps that meets work schedules and reduces costs.
Transfer of employment risk. Many employers use labour hire as a way of minimising their risks. For example, businesses can use casual labour placements as a way of enhancing their capacity to ‘hire and fire’ without exposing themselves to the risk of an unfair dismissal claim.
Typically, if the client does not like a worker sent to their workplace they can simply raise the labour agency and request a replacement, or try another labour hire company.
Many employers see this as more convenient to dealing with dismissals.
Increased productivity. Internal productivity can insulate you against elevating outsourcing costs that are often associated with big contracts.
Short-term contract viability. An ability to tender and accept contracts does not have to be hamstrung by staff shortages. What may have otherwise stretched the current workforce can be allocated to short term workers employed on a casual basis.
Try before you buy method. By utilising alternative staffing solutions, most companies allow host employers to take over the contract of the worker and employ them fulltime.
In some cases, there are fees associated, but in many keys there are zero fees at the completion of a set period of time. It is a great way to ensure you have the right person before accepting full responsibility.
But it is not all flowery. There is a perception that hired workers may not receive the same rights and conditions as direct employees, which ultimately develops an unhealthy “them and us†type of mentality in the workplace.
eresources@consultant.com
Labour hire workers will generally feel a lack of job security with their employment being of a casual nature.
More operational time for management. Less time spent on advertising, recruiting, reference checking and interviewing. More time on internal money making productive issues.
Additional advantages include: No Pay queries, No recruitment costs, No disciplinary enquiries, Simplified once off invoicing, No payroll department needed, Access to skilled workers during times of shortages, Ability to test the workers skills before taking them full-time.
In Uganda today, contract labour is becoming increasingly popular as companies and organisations from all sorts of fields strive to improve bottom lines.
eresources@consultant.com
SINCE the early 90s more and more companies, especially in the Western world, have discarded a big part of their traditional workforce and use labour hire companies to provide their staff.
It is a very popular way to find permanent staff and an attractive option to use during periods of seasonal peaks and business surges in general.
Labour hire is an arrangement whereby a labour hire company or agency provides workers to a client or host, but the labour hire firm takes care of the workers’ remuneration. It is outsourcing of skilled and unskilled workers for short or long-term positions.
The workers, known as contractors, field employees, field team members, temps, on-hired employees or just employees, are employed by the contract labour organisation. They are not employed by the company (client) to whom they provide labour.
They are screened in accordance with a job description and assigned to roles within the host employers’ organisation as per a request.
The employee works under the practical day-to-day direction of the host employer, but is paid by the labour hire firm. The client firm pays a contract fee to the agency for the provision of that labour.
The advantages of using labour hire include provision of a flexible workforce to meet peaks in demand, enabling firms to maintain a core workforce with the capacity to fill up staff gaps that meets work schedules and reduces costs.
Transfer of employment risk. Many employers use labour hire as a way of minimising their risks. For example, businesses can use casual labour placements as a way of enhancing their capacity to ‘hire and fire’ without exposing themselves to the risk of an unfair dismissal claim.
Typically, if the client does not like a worker sent to their workplace they can simply raise the labour agency and request a replacement, or try another labour hire company.
Many employers see this as more convenient to dealing with dismissals.
Increased productivity. Internal productivity can insulate you against elevating outsourcing costs that are often associated with big contracts.
Short-term contract viability. An ability to tender and accept contracts does not have to be hamstrung by staff shortages. What may have otherwise stretched the current workforce can be allocated to short term workers employed on a casual basis.
Try before you buy method. By utilising alternative staffing solutions, most companies allow host employers to take over the contract of the worker and employ them fulltime.
In some cases, there are fees associated, but in many keys there are zero fees at the completion of a set period of time. It is a great way to ensure you have the right person before accepting full responsibility.
But it is not all flowery. There is a perception that hired workers may not receive the same rights and conditions as direct employees, which ultimately develops an unhealthy “them and us†type of mentality in the workplace.
eresources@consultant.com
Labour hire workers will generally feel a lack of job security with their employment being of a casual nature.
More operational time for management. Less time spent on advertising, recruiting, reference checking and interviewing. More time on internal money making productive issues.
Additional advantages include: No Pay queries, No recruitment costs, No disciplinary enquiries, Simplified once off invoicing, No payroll department needed, Access to skilled workers during times of shortages, Ability to test the workers skills before taking them full-time.
In Uganda today, contract labour is becoming increasingly popular as companies and organisations from all sorts of fields strive to improve bottom lines.
eresources@consultant.com