Labour Hire – How It Can Benefit Your Business
Quality labour is as important to a business’s success as it is hard to acquire. With a quality workforce, even a business with a limited number of resources can compete favourably with the biggest companies. In short, labour can make or break a business. Like every other business asset, quality labour can be expensive. Couple this with the ever changing labour needs of a typical business and you have a problem; maintaining an optimum workforce at all times while keeping the labour bill at a minimum. There are two main reasons why labour needs keep fluctuating. These are:
Employee Absences. Sometimes workers miss work for extended periods due to illness, annual and maternity leaves. Their absence creates a labour shortfall that needs to be plugged, requiring the hiring of new employees. Fluctuating workloads. Demand for products is always fluctuating; sometimes it’s low, other times it’s high. When demand is high, additional employees are required to help increase production capacity.
The cost of hiring The process of hiring an employee is expensive, especially when being repeatedly done for temporary positions – such as those resulting from the above situations. But the cost of hiring a new employee goes beyond paying a wage. Factor in recruitment costs and employee training costs and you will realise that hiring an employee is quite an investment. Recruiting costs come in the form of advertising for the vacant position, evaluating resumes, conducting interviews and checking references and backgrounds. All these tasks require both time and money to carry out. After recruitment, the employee needs to be trained before they can become productive. It’s estimated that on average a single employee will require about 32 hours of training at a cost of
$1,200 per year. And these figures are for employees already working in the organisation. New hires will require more time for orientation and the initial job training. (Source: https://www.td.org/Publications/Magazines/TD/TD-Archive/2014/11/2014-State-of-the-IndustryReport-Spending-on-Employee-Training-Remains-a-Priority) Labour hire reduces the time and cost of hiring employees by providing your business with workers who can be put to work immediately. Labour hire – what is it? The concept of labour hire is pretty simple; it’s a labour arrangement where a third party – commonly referred to as a labour hire agency/company – provides outsourced workers to your business either on a temporary or permanent basis. The workers provided by the agency (often referred to as on-hired employees, temps, or contractors) are employees of the agency, not yours, even though they’ll be working in your organisation. All employer obligations such as remuneration and benefits will, therefore, remain with the labour hire company. In its infancy, labour hire was only able to provide workers for a limited number of job roles, but as it gained popularity throughout Australia, labour hire grew and can now serve clients and projects across a large variety of industries with varying labour needs. From unskilled to highly skilled workers, labour hire is now able to fulfil virtually any business’ labour requirement. Benefits of labour hire to your business Labour hire is beneficial to all businesses regardless of their size and area of specialisation. We have compiled some of the major benefits your business can gain from using labour hire. They are: 1. Reduced costs. Labour hire effectively shortens the hiring process by eliminating most of the steps such as advertisement for positions, CV evaluation, conducting interviews, initial training and induction among other recruitment obligations. In addition to this, labour hire smoothens out labour supply meaning that you don’t need to keep an excess number of permanent employees for that one time you require them. Because the hiring process is swift and effective, you can keep a core workforce of permanent employees and bring in temps for projects or to help out during high demand. You, therefore, won’t have to pay for employees you don’t need. Employer obligations such as payment of wages, workers compensation insurance, superannuation, payroll tax and record keeping are also taken care of by the labour hire firm. Wages payments are
made by the labour hire firm as are all employee administrative overheads and record keeping. This frees your company to concentrate on its core mandate and reduce administration costs.
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2. Workforce flexibility. Labour hire provides you with the ability to adjust your workforce quickly, which gives you the flexibility to adapt to changing workloads at a moment’s notice. This ensures that your workforce is at an optimum level at all times depending on your current workload, keeping your labour costs low while ensuring customer satisfaction. 3. Expertise and experience. Workers provided by your labour hire agency have already worked for other companies in your industry and will bring the wealth of experience they have acquired to your organisation. The fresh and new approaches they bring could be exactly what your business requires to get to the next level. On-hired staff will also provide the skillsets you require for one-off projects that you may lack inhouse. It’s a cheaper alternative to training your employees for a skill that will not be required again after the project is complete. 4. Specialised recruitment. Labour hire companies are specialised in providing labour, it’s what they do. We understand the ins and outs of the labour market within all fields and industries. Utilising an expert to help you source workers for your business or project will ensure that you get the best employee to suit your specific needs. 5. Efficiency. Labour hire firms maintain large databases of skilled workers who have already undergone a rigorous assessment and have prior work experience. The firm is, therefore, able to provide high-quality workers for your business who are ready to begin
work immediately. And because of their large database, workers can be provided in bulk without compromising quality. This effectively reduces downtime due to labour shortages.
Benefits of labour hire to your workforce Labour hire is not only beneficial to your business but to your workforce as well. Benefits to your workforce include: 1. Exposure. On-hired employees, through interactions with your core workforce, will share their knowledge and the experience they have gained from working in different companies in your industry helping your employees improve their performances and better their own careers. 2. Reduced stress. Labour shortages caused by employee absences and increased production requirements can result in overworking of employees. This could stress out your core workforce leading to reduced productivity and high employee turnover. Labour hire ensures that your employees only take on the right amount of work for maximum productivity while ensuring they maintain a healthy work-life balance. 3. Opportunity for career advancement. For employees who need to take some time off to advance their skills, labour hire offers the perfect solution by providing temporary replacements to hold the fort, as they develop their skills. Everybody wins with labour hire Labour hire is loved by business owners and job seekers alike because of the benefits it provides to both. Job seekers who work for labour hire companies are happy because they get the opportunity to work for a variety of companies at a considerably higher pay rate. Labour hire also provides people who do not want the rigidity of permanent employment with the flexibility to choose when they want to work. On-hired workers are therefore able to take time off when they require to focus on other aspects of their lives. Small businesses also use temps for a trial period before recruiting them permanently into their workforce. Labour hire gives job seekers looking for permanent employment a chance for them to demonstrate their skills to potential employers while still earning from their services.
How to choose a labour hire company The benefits of using experts with extensive experience in the labour industry for your labour needs is clear, that is why thousands of businesses across Australia are using labour hire for their business needs. But with so many options out there, it can be difficult to choose the right labour partner for your business. Here are some of the aspects you should look at before enlisting the help of a labour hire company: 1. Industry knowledge. The labour hire agency you select for your company should have the knowledge and experience to recruit for your specific industry. 2. Worker follow ups. A good labour hire firm should follow up on workers placed in your company to ensure consistent performance and client satisfaction. 3. Guarantees. Although it rarely happens, your labour provider should be able to guarantee replacement of workers who do not perform satisfactorily after a certain observation period. 4. Capacity. The labour hire company you choose should have a large enough database to cater for your labour needs, especially if your labour needs are large. Don’t just consider labour hire for your next business project, give it a try and you’ll realise that this is an outstanding business solution that no business can afford to ignore.
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