How Does a Labour Hire Company Work?

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You might wonder how other businesses cope when they have too much work for their team. This is a common issue that can be dealt with by using labour hire companies. With labour hire companies, you can hire staff for just a few weeks, or even a day or two to get the job done.

A labour hire company works by hiring it’s workforce out to other businesses on a short term basis. Labour hire companies make it easy for businesses to cope with an influx of work, seasonal work, pending deadlines and staff absentees. A large benefit to businesses is that a labour hire company reduces administration and costs in hiring short term employees.

Labour Hire Company vs. Recruitment Agency

Labour hire agencies are often confused with recruitment agencies. Their end goals of providing businesses with skilled labour are the same. But, their fundamental process is much different.

A recruitment agency seeks out the best candidate for the job. They do this by combing through their application and matching it to the company’s needs. When the company finds a candidate they like, they must hire them themselves. The company compensates the recruitment agency by paying a finders fee.

When working with a labour hire company, the employees will work for the labour hire company – not the business that needs work done. The labour hire company takes care of hiring the employees, then they ‘loan out’ the workers to businesses.  Like a recruitment agency, a labour hire company conducts the entire finding and hiring process, but it also extends to hiring the employees, paying their wages, taxes, and insurance. The company in need then only pays to use the services of the labour hire company’s fully vetted employees.

There are many benefits to hiring a labour hire agency.  The main point is that they allow businesses to have the greatest flexibility. Labour hire companies let businesses use employees for as long they need.  Here are five compelling benefits for hiring a labour hire company.

Cost and time-efficiency

There is no need to spend more time finding employees. If your business has a high turnover rate of employees, it will be much more time-efficient to let a third-party company handle hiring.  Labour companies can do the paperwork, payroll, and the take over the process. Once a business hires a labour hire company, they have the benefit of skilled, and vetted employees show up to work within a matter of days. In fact, the employees will arrive fully briefed on their tasks.

Quickly cover vacancies and absences

Absences due to illness, accidents, or family emergencies are common. And when they happen, it often takes a toll on the company’s workforce. To prevent falling behind on work, a labour hire company can quickly find a temporary replacement. This keeps the workforce running smoothly. Labour hire companies are also helpful if an employee leaves their position without providing proper notice. In this case, the third-party company can immediately offer a vetted replacement. The employees are always experienced and ready for the job.

Flexibility with increased demand and seasonality

Flexibility is a significant benefit to hiring a labour hire company. For companies with fluctuating seasons, it does not make sense to have an excess of employees year around. With the help of a labour hire company, businesses can decide when they need temporary workers. These workers will then fill in and help with the increased workflow. For example, retail companies are busier around the holidays and need extra work. Agricultural businesses have an increase in work when harvest season comes around.

Work Ethic

Temporary employees, come eager and ready to impress. When a skilled and enthusiastic temporary employee is added to the workforce, they will motivate the regular employees to do their best. High energy and positivity spreads quickly and can inspire your team to be more engaged in their responsibilities.

Prevents overworking

Labour shortages can cause stressful workplace environments. With full-time workers being overworked and stressed, there is less productivity and lower quality of work. By using a labour hire company to supply temporary labour, there will be a better division of labour to ensure employees are not burned out.

What Businesses Use Labour Hire? 

Businesses that need heavy manual work, like the civil construction sector, especially those with high and low seasons, benefit the most from labour hire companies. During seasons with large influxes of work, companies can pay labour hire agencies to ‘loan’ their employed workers for the time needed. Some examples of companies that gain the most advantages from working with a labour hire company include but are not limited to:

  • Builders
  • Tradesmen
  • Civil Workers
  • Landscaper
  • Retailers
  • Event Managers
  • Hospitality
  • Mining
  • Farmer
  • Cleaners

How do Labour hire companies make money?

Labour hire companies make money by providing temporary workers to clients on a fee-for-service basis. These companies act as a middleman between clients and temporary workers, providing workers with specific skills and experience for short-term assignments, often in industries such as construction, manufacturing, logistics, and healthcare.

Labour hire companies earn revenue by charging a markup on the hourly rate of the temporary workers they supply. The client pays the labour hire company for the services provided, and the labour hire company in turn pays the temporary worker an agreed-upon hourly rate. By managing a large pool of temporary workers, these companies can benefit from economies of scale, negotiate better rates with clients, and provide cost-effective staffing solutions.

What Type of Skill Force Do Labour Hire Companies Manage?

Labour Hire companies hire our both skilled and unskilled workers across a huge number of industries, including but not limited to construction, landscaping, mining, event management, fruit picking, cleaning, civil (ie. traffic control, labourers), and security. That is why you often see civil construction labour hire on a lot of commercial sites.

Is a Labour Hire Company Right for Your Business?

Do you need temporary workers but do not have the time to manage the hiring process? You may need to hire a labour hire company. A labor hire company would make the process quick and easy. With the time and money saved by a labor hire company, you will be able to focus on improving your business.

If labour hire is not right for you and you are looking for a permanent employee for your team, Canberra Labour Hire can help you with our permanent recruitment division. Our dedicated team can provide you with permanent recruitment Canberra wide!