What is a Labour-Hire Service?
Labour hire is categorised as outsourcing skilled and unskilled labour, with businesses often hiring people for short or long-term assignments/projects. The existence of agencies or companies that specialise in the supply and fulfilment of workers to business enterprises and organisations dates back to at least the 1950s. However, one of the most dramatic aspects of the general expansion of non-standard employment has been the rise in labour-hire in Australia.
Initially, labour-hire companies specialised in providing clerical and administrative staff to workplaces to fill temporary gaps caused by employee absences or short-term peaks of inactivity. Since then, the labour-hire industry has spread to other sectors of the economy, with communications, mining, manufacturing, banking and insurance, and property and business services reporting significant labour-hire utilisation rates.
However, while significant Australian and international academic effort has been focused on explaining the expansion in non-standard employment, little is discovered about the reasons for the rise in the specific types of labour hiring that have gained importance in Australia. The labour-hire business has seen significant expansion in recent years. With roughly 3% of individuals working in labour-hire arrangements, it has evolved as a significant part of the Australian labour market and economy.
In general, labour-hire is defined as a triangular relationship formed when a labour-hire agency on-hires the services of a worker to a host business. Thus, labour-hire is an arrangement in which “a labour-hire firm or agency sends individual workers to a client or host, with the labour-hire company ultimately liable for the worker’s remuneration.”
What Do Labour-Hire Companies Do?
In Australia, the employer is a labour agency, commonly known as a recruiting agency. Employees sign contracts with the labour agency rather than the company to whom they are outsourced, and the labour agency pays them. Nonetheless, the employee must work within the terms and conditions of employment established by the employer or “host.”
Overview of Labour-Hire Employment
Labour is typically hired on a project-by-project basis, especially for professions requiring manual skills.
- The building and construction, and mining industries are among the largest hirers of labour in Australia.
- Employers in the industrial sector frequently hire machine operators, process workers, mechanical assemblers, and electrical assemblers.
- Warehousing will necessitate the hiring of store employees, forklift drivers, and pickers and packers.
- Employers in companies that are suffering from employee underemployment (for example, due to illness), are driven by seasonal business needs, or are at the mercy of unstable supply chains can call a labour agency for additional staff.
- Businesses that are undergoing new construction or fit-outs for themselves may also require labour-hire to keep operations operating smoothly.
- Yearly audits and hectic periods may also necessitate the hiring of outside workers.
What’s the Difference? Contractors Vs Labour Hire
Contractors are typically hired by a builder/construction business to take ownership of a complete project section. They are in charge of their assigned work section’s labour, materials, machinery, tools, and delivery.
Labour-hire agencies are usually hired on an as-needed basis to help with the overall site and the many contractors on site. They are not generally in charge of a specific area/section of a project, major machinery, or materials.
To summarise, there are distinct advantages to using both labour-hire agencies and contractors. However, it is essential to remember that many contractors use labour-hire to find new workers when working on many projects, and their resources are stretched. As a result, we recommend working directly with a labour-hire firm alongside your contractors. Instead of being charged labour-hire rates plus the additional costs of having these personnel on-site through your contractor, this might save you a lot of time and money. Before deciding how to staff a specific position, you must analyse the pros and cons and make your decision.
What is Labour Hire Like for the Employee?
There are many advantages to getting work through a labour agency for employees in a specialised field or who are highly skilled.
A reputable labour agency will have a diverse clientele. This provides much-needed relevant experience for workers, apprentices, and trainees to add to their skills and resumes.
It ensures that workers continue to be employed in their specific field and can provide flexibility in working hours, job diversification, and the opportunity to plan labour-hire work around other occupations.
What Are the Labour Hire Pros and Cons for the Employer?
Assume you are in charge of a major retail warehouse. You are approaching the Christmas season and require additional personnel to work in the warehouse sorting and packing.
The warehouse also requires a significant electrical update. Your employer has informed you that the warehouse will be receiving an extensive new fit-out during the quieter post-New Year’s week.
Even if they had the necessary skill set, your staff are too busy with their usual work to provide a hand.
Do you have enough time to start a recruitment process? Do you have the expertise to know what talents and experience to seek for and how to tell if someone is qualified?
It is significantly easier to call a labour agency in this situation. The agency will have already screened high-quality employees. They can fit their skill set to the job you’re looking for. And instead of wasting valuable time and effort processing payroll, tax, and other worker rights like superannuation, you only need to pay one cost.
A contract is signed with the labour agency by both the labour-hire employee and the employer. On the other hand, the employer is not aware of the specifics of the contract between the labour agency and the employer.
As a result, determining who is responsible for what might become fairly perplexing.
The employee signed a contract with the labour agency but is now employed by the employer.
What happens if that employee is injured on the job? Who handles employment discrimination complaints? Are employees protected from wrongful dismissal?
Nevertheless, many large Australian businesses and companies are turning to the labour-hire market as it offers a cost-effective, time-saving way of gaining skilled labour at crucial periods in the annual work cycle.
Labour Hire Laws: General Labour Laws Apply
Like any other legal industry functioning in the country, the labour-hire sector is subject to the country’s industrial relations legislation. As a result, labour-hire companies in Australia must follow a set of legal duties to protect the interests of stakeholders (i.e., workers, clients, and the government).
In almost all Australian states (excluding Victoria and Queensland), labour-hire companies are merely required to comply with the usual state and federal workplace relations systems, with no additional legal duties. As with other businesses, these laws ensure that workers’ welfare is sufficiently protected.
What is Labour-Hire Management Software?
Labour-hire management software is a tool that self-perform and subcontractors can utilise via mobile apps/desktop computers to increase quality, safety, scheduling, and tracking of work progress. Labour hire contractors can use operations software to digitise workflows such as:
- Staff Scheduling
- Equipment management
- Safety and quality
- Payroll management
- Time tracking
A feature-rich operations software that is customisable to meet the needs of any contractor in the labour-hire business. Furthermore, paperless procedures using the software can aid in obtaining employment from large general contractors and working on government projects.
Why Use Labour-Hire Management Software?
Labour hire software enables you to better understand your business’s multiple tasks and processes by making it easier to share data (such as timesheets, health and safety forms, and equipment locations) across projects, clients, and business departments. By automating tedious activities and improving data collecting from the field, labour-hire software enables an integrated operational approach.
The majority of labour-hire contractors use whiteboards to schedule and paper forms to collect information from the field. In addition, contractors can use labour-hire software to digitise the process and automatically log data for the entire team to access. As a result, labour-hire contractors have reported a 50% reduction in administrative time.
How Entire OnHire Can Help?
Entire OnHire is a cloud-based all-in-one staffing software designed to solve the typical problems labour-hire agencies face.
By integrating recruitment, allocation, compliance, marketing, and finance in one user-friendly system, your business improves efficiency, enhances visibility and control, and increases bottom line profits.
With every aspect of your business connected, aligned and integrated, you can make better decisions, respond faster and do more with less.
Entire OnHire provides a platform that connects the business directly to staff. As a result, employers have the freedom to pick who they want to recruit and how much they want to pay. Employees can also select jobs based on their direct skill set and availability. As a result, businesses find staff that fit a specific skill set to complete a job without manually managing the tasks. Entire OnHire is the most adaptable and comprehensive platform for hiring labour contractors. Request a demo today to learn how labour-hire management software may help you reach your business objectives.
Particularly, would you want to find out more ways to use a workforce management system? Or don’t know how to start using an automated system to manage your staffing issues? We’ve got a lot of blog posts to answer all your questions!
If you would like to have a conversation with one of our specialists today regarding how Entire’s workforce management system may benefit your business, please don’t hesitate to email us at email@example.com or contact us now.