Australia has thousands of construction companies and each uses mixes of contractor businesses and labour-hire agencies or workers to get multiple projects done. When distinguishing the difference between the two it begs the question, is labour hire a subcontractor?
The labour hire agency is technically the subcontractor contracted to provide temporary staff. In most cases individual labour hire workers are staff who are hired out to businesses and not subcontractors. These staff are technically employed by their labour hire agency, but take direction from the business who is hiring them.
Read on to learn more.
How does labour hire subcontracting work?
Subcontracting occurs when a business or person hires a general contractor for a big job to be done by an estimated time. So, a big construction project may be in the works and contractors are seeking labourers to do the job well. They will often approach a labour hire company with descriptions of the roles and jobs needed to be filled. The labour hire team then contact general and skilled labourers that they have on file and know are good workers. These workers will be offered an opportunity to apply for the job.
This saves contractors time and money in the process of recruiting labourers. The contractors can continue to focus on getting everything organised to ensure the project runs smoothly. Labour hire teams are trained to find the best workers for the job that will deliver quality work. Businesses feel comfortable approaching these companies because they know that there will be lots of consideration put into finding workers.
Both the contractor and subcontractor discuss the terms of the contract and the payment of fees. Then a contract is drafted and finalised before being expressed to workers. The labour hire team can work with the contractors to design a job description and contract that is beneficial to both worker and employer.
Most of the business processes between employer and worker are organised and filtered through the labour hire agency. This is because places such as Canberra Labour Hire are contacting out skilled and general labourers to construction projects. So, they have a handle in the contracts and payments that occur.
What is the difference between a contractor and a labour hire?
To understand the difference between a contractor and a labour hire agency you must first know the definition of each.
A contractor is a person hired by clients to plan, monitor, and manage work being done. They are in charge of gathering all the requisite resources like labour, materials, and equipment to facilitate the successful completion of a project with little to no risk.
Labour hire agencies recruit workers and then outsource them to perform labour for a general contractor on behalf of the firm. The agency offers compensation to workers and is a third-party contractor.
The difference between contractors and labour hire teams is that contractors oversee an entire project. Labour hire companies assist a main contractor in sourcing skilled and general labourers to hire. So, contractors will often be the ones to approach labour hire agencies and that’s what makes labour hire a subcontractor.
What are the benefits of using a labour hire agency?
There are many benefits to using a labour hire agency for employers, which is why hiring agencies continue to grow. Let’s look at the biggest labour hire benefits:
Flexibility created through using labour hire
Labour hire agencies create flexibility by evaluating the skills of workers and making the best selection for your project. Labourers begin to work and are not obligated to do any other tasks on the project. If another subcontractor is needed for other areas a labour hire agency provides them on demand. Also, there is no need to employ all workers for days that their skills are not needed. There is a range of flexible contracts that can be created and offered to flexible workers through labour hire.
Labour hire lowers recruitment costs
Using a labour hire agency lowers the cost of recruiting and screening workers in specialized areas. Also, insurance and payroll taxes are handled by the agency. Employers will organise a payment with the labour hire company to undertake the recruitment process. This is often less than what it costs them to do the recruiting their selves. Plus, they get a guarantee of quality workers for the jobs. If they’re not happy with a worker, the labour hire company will be the ones to replace that worker. All these aspects greatly reduce recruitment costs for contractors.
Effective recruiting time management
Without proper time management, there’s no telling when a particular area of a project will be done. Labour hire agencies help you to limit the time spent handling recruiting. They will have workers on file that they can contact if workers are needed immediately. Then contractors aren’t stuck waiting for labourers to apply for work. Labour hire agencies will go in search of the best labourers for the job in a certain amount of time.
Labour hire specialise in meeting specific demands
Labour hire easily adjust to changes in demand for workers and roles. You might need a whole team of labourers for a role. Or you might just be seeking a few skilled labourers. Either way, labour hire companies have the connections to meet these requirements. The same is said for starting with one demand, and then that changing along the way.
Labour hire teams are professionals at sourcing workers. They dedicate each working day to finding the best fits for your job positions. There is no doubt that they can subcontract reliable workers to meet all of your demands.
What are the benefits of using a contractor?
Hand-in-hand with labour hire subcontracts are usually contractors. Contractors are often hired to help with more complex projects within specific time frames. There are different kinds of contractors that can address construction projects of all sizes. So, what are the benefits of using a contractor?
Contractors save your time
Projects can take quite some time to finish depending on their size and the urgency for completion. They may take months or even years to finish not to mention unpredictable factors that could hinder completion. This could include weather conditions and a shortage of material resources. An experienced general contractor will oversee the project and set measures in place to ensure it is completed by the timeframe agreed upon. Or, as close to that time frame as possible.
Contractors can save you money on construction projects
When calculating the entire budget for a construction, remodelling, or renovation project, it often means realising a high cost for quality results. This is where hiring an experienced contractor is great. Their experience has allowed them to build connections and networks within the construction industry. They could find you deals on your materials that are still high quality. They often interact with suppliers and can be used as a middleman for business. If you can establish a good relationship with a trusted contractor, you could save a lot of money on your project.
Direct communication with contractors is a bonus
Communicating with several subcontractors, workers and suppliers can create a very hectic schedule leaving little time for other important matters. Hiring a contractor as a liaison between all participants of the project will create less stress in gathering feedback and updates. Contractors will oversee the project to make sure everything is being completed in the correct way. They take the communication web and become a manager of that. This means that you only need one main point of communication which is your contractor.
This is a similar benefit to using labour hire because a lot of communication occurs through your labour hire team. Sometimes even contractors delegate to subcontractors (labour hire) to further manage and organise workers.
If you’re looking to hire labour workers in Canberra, get in touch with our Canberra Labour Hire team today! Looking for Canberra based labour work? Take a look at our jobs board. Want to learn more about the construction industry? We have lots of resources in our blog, such as ‘is a career in construction good?’