What are the differences between having a Labour Hire and a flexible workforce? Having a flexible workforce is sometimes about providing a range of different ways of working that employees can utilise, without necessarily working Monday – Friday, 9am to 5pm.
Labour Hire is accessing skilled, tested and proven workers in short periods of time based on market demands. Essentially this means that employers that have seasonality or fluctuating demand in their businesses can increase or decrease their workforce as they require, on a week by week or even day by day basis.
There is considerable press in Victoria regarding the concept of Labour Hire. Flexi Personnel is a recruitment company specialising in Labour Hire, as well as industrial, manufacturing, trades and white-collar permanent recruitment. Based on that, we obviously have a vested interested in the health of the industry. However, we also have over 25 years of experience in the industry and have witnessed both positive and negative effects to businesses and workers.
What is Labour Hire?
Labour Hire companies essentially act as an employer: This involves recruiting staff, advertising, interviewing them, screening them, skill testing them and managing any issues. Host employers pay the Labour Hire company a fixed fee which is comprised of taxes, insurance, statutory charges and wages.
What are the risks and benefits of Labour Hire?
First, the risks
The main risks of this type of recruitment lie with candidates facing uncertainty of their conditions and guaranteed hours. Much of the press coverage associated with Labour Hire is focused on employee rights and stability of work. These risks can be alleviated depending on the ethics of the Labour Hire companies that the candidates register with. It is generally a space of unskilled or semi-skilled work, which places many employees in a more precarious position than if the candidates were skilled or highly skilled (or even skilled in a niche area). The major take-outs? Employees need to ensure that they check the reputation and ethics of the Labour Hire companies they register with and understand their workplace safety policies.
Labour Hire offers benefits to both employees and employers. For employees, there are benefits of being able to work across many different businesses. If one of our Labour Hire clients is experiencing a downturn, others may require additional staff. It makes sense to re-allocate work to available Labour Hire employees. There are additional benefits of workers being exposed to different industries, host employers and work practices, which ultimately result in increased learning.
The benefits to host employers mean that they aren’t stuck paying wages when their business isn’t busy – it gives them flexibility and reduces their wages commitment. They can also easily scale up or down with regards to their workforce requirements.
How are charges calculated?
Recruitment companies charge a fixed hourly fee which includes the Base Wage, as well as Superannuation, Payroll Tax, Sick Leave, Annual Leave, Public Holidays and other charges.