Every once in a while, businesses require extra “hands” to help out with work overflow or to cover for an absent employee. Because of the short-term nature of these kinds of positions, businesses often prefer to hire employees on a non-permanent basis. It is at this moment that the manager in charge has to decide on the terms of employment to use for the temporary workforce. The two major options are hiring contract workers or on-hired employees.

The two are similar in that they provide workers on a temporary basis but differ significantly on other details. Contract workers are completely separate from your business and the relationship you build with them can be defined as a contract for the provision of a service. The contractor will perform the work for your business (known as the principal) either using their own resources or yours depending on the arrangement. This kind of worker maintains control over the method and time he/she uses to perform the work.

On-hired employees, or “temps”, on the other hand, are workers provided by another company (known as a labour hire agency) to work at your organisation. The workers provided by the agency are not your employees so the obligations of the employment relationship remain with the agency. The work arrangement is between your business and the agency and not your business and the workers.

The differences between contract workers and labour-hire workers are:

  1. The employment period. With contract workers, the employment period is defined at the beginning of employment when the contract is being drafted. If you need to increase this time for whatever reason, you will have to negotiate a new contract with the worker/s once the current one expires. Labour hire arrangements are more flexible as compared to contracts as the employment period can be extended indefinitely for however long you require the worker. This makes labour hire ideal for situations in which you are not sure for how long you will require the extra help.
  2. Ease of changing workers. Once you get into a contract with a worker, it will be quite difficult to get out of it if their work does not meet your standards. It might require some legal proceedings and sometimes even cost you money. Labour hire arrangements, on the other hand, provide an easy way of changing workers. If you – the client – are not satisfied with a worker, all you need to do is to contact your agency and they will have a new worker replace the non-performing one.
  3. Cost. With contract workers, your company will have to advertise the positions, vet the applicants and then negotiate the terms of the contract. This will be costly to your organisation in terms of money, time and human resource. With labour hire, all this work is done by the agency which looks for candidates, vets them, and even provides training and onboarding in some cases. This makes labour hire cheaper than using contract workers for your short-term labour needs.

At Blue Collar People, we provide highly qualified employees for our clients and provide the necessary support to ensure that our candidates are successfully integrated into your organisation. Contact us for more information, we’ll be happy to hear from you.