Labor hire refers to the practice of getting skilled and non-skilled employees from an agency. Those employees are only paid for the work they do and they are ultimately answerable to the agency from which your company hired them. This article discusses the different ways through which you can save money when your company contracts labor hire employees:
Lower Training Costs
Getting labor hire employees can reduce the costs you incur to train workers so that they upgrade their skills set. This is because you describe what skills an employee should have then the labor-hire recruitment agency finds that employee for you. In this way, you are able to get the exact kind of worker you need without spending resources on training that person. This saving can increase your profitability since you will have reduced your company's costs.
Lower Social Security Contributions
In most jurisdictions, employers are obliged to contribute towards the social security remittances of their workers. Your company will not have to foot this cost since the labor hire employee is the responsibility of the agency from whom you got that worker.
This reduces the number of employees for whom you have to make social security contributions. That translates into a saving for you since someone will be doing the work that you want done and yet your company will not be obliged to make any payments towards the social security of that worker.
Lower Insurance Costs
Another area where you can save is on insurance. Your company may not be responsible for making workers' compensation insurance payments for labor hire employees. This is because the labor-hire recruitment agency will be responsible for acquiring that insurance policy for those workers since such employees are under contract to the agency. However, some laws may compel you to foot the treatment cost of labor hire employees who are injured while working for you.
Lower Overtime Costs
Your company can also be spared the expense of overtime pay if you employ labor hire workers. This is because such employees may not be regarded as full-time employees of the company so overtime pay is not applicable to them. This can save your company huge expenses since overtime pay is normally computed at a higher rate than the payment for normal working hours.
As you can see, your company stands to realize significant cost savings if you take on labor hire employees. That is why you should give some serious thought to this option of getting workers. To learn more, contact a company like Labour Options with any questions you have.