The difference between labour hire and contractors

If you're running your own business you need to know the difference between labour hire and contractors. This will help to ensure you employ the right people and know your legal obligations regarding them and their benefits. They are different from the rights of your permanent staff.

Labour Hire

This is often referred to as outsourcing. The principle is that a third party, such as Brix Projects will supply you with a member of staff as and when you need them.

You can specify the skill set you need and they will find someone from their pool. It is then possible for you to interview them to confirm their suitability; or you can simply get them to start working.

The major benefit of getting staff through labour hire is that you do not need to waste your time advertising for staff, screening their applications and interviewing them; just to find out their skill set is not what you thought it was.

You can get labour hire staff to cover a short term need in your business or you can even use them to help you find a new, permanent, member of staff.

If you take on labour hire for a short term contract it is likely that they will remain employed by the third party agency and they will handle all the legal matters pertaining to their employment. But, it is worth checking with the agency; permanent contracts will convert these workers into regular members of your staff.

Contractors

A contractor is usually someone that is listed as self-employed or part or another firm. They will be specialized in certain skills, such as Information Technology, electrics or perhaps marketing.

A contractor is generally taken on to cover a short term need. This can be an increase in sales but is usually relating to a specific project.

The contractor will tell you a price for the job you wish them to do. They will then perform the job either with their own resources or using yours. This can work either way depending on what you specify.

You'll have no control over the methods used, although usually you'll set a timescale to have the job completed in and you can expect it to be completed to a satisfactory standard.

Key Differences

• Timing

Contractors or contract workers will have a set contract and you'll find it is very difficult to get out of the contract; even if the work is not up to standard.

In contrast labour hire can be changed daily. If you don't like the worker you simply tell the agency which sends a different person the next day.

• Contract Negotiation

A contractor or contract worker will need to be advertised for and then interviewed to ensure you find one that you think will do the job and that you can communicate with.

This can be time consuming and will prevent you from driving your business forward.

In contrast a labour hire worker will be pre-vetted and simply turn up when you need them.

There is a place for both in the workplace; you just need to consider your short and long term needs before you commit to which is right for you.