Distinguishing between a labour hire firm and a recruitment company

DISTINGUISHING BETWEEN A LABOUR HIRE FIRM AND A RECRUITMENT COMPANY At a glance, the job of a labour hire firm looks quite similar to that of a recruitment company – which can be a bit confusing to a lot of people. But take a closer look and you will realise that although they both specialise in providing labour for businesses, there are substantial differences on how they go about it.

While both are experienced recruiters aiming to save you money and time by simplifying the often long and expensive process of hiring new employees, understanding how these seemingly similar firms operate is important to ensure that you achieve your desired staffing outcome.

To help eliminate the confusion between the two, we shall be taking an in-depth look at each type of firm, how each works, the benefits of each and which one would be best for your specific needs.

Labour hire firm – what is it and how does it work?

A labour hire firm in a few words, is an organisation that provides workers to businesses under a labour hire arrangement. Labour hire is defined as the provision of outsourced skilled and unskilled blue-collar workers for both long-term and short-term positions.

(Source: https://en.wikipedia.org /wiki/Labour_hire) The main term here is ‘hire’ which means that workers provided to the client, either on contract or on a permanent basis, are not employees of the client company but are actually employed by the labour hire firm. What this means is that your business does not pay the workers’ wages or entitlements directly. Payments are made to the labour hire firm which maintains the employee payroll.

The provided worker will work at your organisation just like your regular employees, use your company’s tools and even wear the company uniform where required, but the direct employment relationship falls under the domain of the labour hire agency.

The benefits of labour hire Labour hire has numerous benefits to businesses that use it. They include: 1. Reduced costs. Labour hire reduces recruitment and hiring costs that include advertising for the position, CV evaluation, screening and training. Furthermore, labour hire firms maintain the payrolls of their employees taking the task off your hands.

2. Reduced downtime. Labour hire is perfect for covering emergency employee absences which can affect production. These could be as a result of illness, employees taking maternity leave or annual leave. Labour hire ensures that you have ready to work employees on standby at all times to take over duties for absent employees thus reducing downtime.

3. Expertise and experience. With labour hire, your company will be able to access specialised skills that your staff may not possess and aren’t required regularly. Instead of spending a lot of resources training employees to carry out a one-off task, you can bring in an expert on labour hire basis for the duration of the project. Your business could also reap from the wealth of experience brought in by on-hired employees who have been on assignment in numerous companies.

4. Flexibility. Labour hire enables ou to change the size of your workforce on a moment’s notice so that you keep production at optimum at all times. The large skill pool also gives your business access to a variety of skills and a large number of workers that can be called upon when needed. This ensures that seasonal labour needs are satisfied without bringing in permanent employees that would become idle once the peak season is over 5. Trying before hiring. This kind of arrangement provides the perfect opportunity for you to evaluate candidates on the job before making the decision on whether to hire them permanently or not.

According to the American Staffing Association, businesses gain from labour hire firms (referred to as staffing firms in the U.S.) in the following ways:

(Source: https://dev-test.americanstaffing.net/staffing-today-v2/staffing-stats/how-clientsbenefit-from-working-with-staffing-firms/)

Recruitment company – What is it?

A recruitment company acts as an intermediary between organisations looking for employees and individuals looking for employment – a middleman of sorts. Its main function is to source the best person to fill a job vacancy that they have been asked to fill.

How it works Although all recruitment firms do not work the same way, the general pattern is as follows: –

The organisation with the vacant position (client) sends in the job description for the

open position to the recruitment Agency.

–

The agency sifts through their CV database to find individuals who best match the

client’s requirements and draws up a shortlist.

–

The client then selects their preferred candidates from the CV selection after which

the agency arranges and coordinates interviews.

(Source:http://www.lse.ac.uk/intranet/CareersAndVacancies/careersService/CareerPlann ingJobHunting/JobHunting/RecruitmentAgencies/RecruitmentAgencies.aspx) Once a candidate is selected to fill a position, they enter into a direct employment relationship with the client and become employees of the hiring business. The recruitment agency is then paid a ‘finder’s fee’ for the role they played. Wages and other entitlements will be settled by the employing company and not the agency.

Benefits of using a recruitment agency.

1. It saves time and money. Recruiting and hiring new employees takes a lot of time and money. By using a recruitment agency, companies are able to cut on these by utilising the recruitment firm’s database to find suitable workers to fill vacant positions.

2. Large skill pools. Recruitment agencies maintain large databases with workers who poses a myriad of skills. Virtually any position can be filled by recruitment agencies saving you the trouble.

3. Convenience. By using the services of a recruitment firm, getting a worker to fill a vacant position becomes very easy and convenient.

Which option to choose for your business?

So, now that we know what both firms do, which one will work best for your business?

Well, which one you choose depends on your needs. For one-off hires of permanent employees, a recruitment firm would be a good fit.

For companies that have short-term and varying labour needs, however, labour hire proves to be most beneficial as it can effectively reduce recruitment time and costs. By using labour hire, businesses can tap into large pools of highly trained temporary workers at any time to solve immediate labour needs without the time-consuming constraints of training and recruitment; and the expense of hiring permanent staff.

A recruitment company isn’t the only labour provision solution there is, evaluate your needs first to find out which solution will best suit your business.

For labour hire services talk to Blue Collar People:

http://www.bluecollarpeople.com/