Understanding the difference between Labor hire and casual employment

It is important for every business that they have the right number of staff. This ensures maximum productivity, a good profit margin, and happy employees. But, maintaining that balance is hard as productivity needs go up and down throughout the year.

This is why many employers look at reputable labor hire or casual employees. However, there is a difference and it’s important to be aware of it.

The Labor Hire

When you undertake labor hire you’re approaching a company that specializes in providing skilled staff. The agency should have vetted the staff to confirm their skill set and experience. You can then specify what you need the staff to do and set them straight to work

The real benefit of labor hire is that the people are still employed by the agency. In effect, you’re hiring a contractor. You pay the agency who pays the staff. You don’t need to worry about holiday pay and can stop using them at any time. You can even request a different member of staff if the one you have got is not merging with your permanent staff or is not performing as required.

In short, there is much less risk as it’s easy to eliminate the labor hire employees. The bottom line is that they are not your employees. But, you should note that this is the more expensive option. The agency has fees to cover and needs to pay the labor hire wages. They’ll charge you more per hour than it would cost you to take on staff.

You also don’t need to worry too much about keeping them happy, they know they are temporary and need you more than you need them.

Casual Employment

The alternative is to take on casual employees. These are people that you’ve checked out through a standard interview process and selected to join your team. However, instead of offering them a permanent contract, you’ll be offering a limited-term one. The contract may only be valid for three months. It is also sometimes possible to offer zero-hour contracts. These allow you to take someone on but not commit to giving them any work each work. Of course, people have to live, if they are on a zero-hour contract they may need to quit and work elsewhere leaving you in the lurch when you need someone.

The issue with casual employees is that you still need to go through the standard recruitment process and training. You also need to be careful that you don’t renew their temporary contract too many times, effectively making them a permanent employee.

If you have a casual employee you can’t simply terminate them, they have the same rights as any other employee and need to e respected as such.

Of course, the benefit is that they are generally cheaper than labor hire and completely under your control. But, in many cases, this is not the most economically viable option. You may prefer to look more closely at labor hire. The additional expense is negligible compared to the hassle and potential cost of a casual employee.

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