The concept of permanent employment is dwindling and for most businesses, labour is not their core function.
Labour is of course necessary to run a business, but it is not the business itself. Where labour resources to run production and operate the business were traditionally acquired through permanent employment, organisations now have other options.
Given that up to 90% of business overheads can be attributed to employment-related functions such as wages and payroll administration and HR management, there is an opportunity to outsource the entire spectrum of the company’s staffing requirements.
By partnering with a temporary employment service (TES) provider, businesses can effectively hand over the burden of all their non-core functions to a specialist.
Focus on the money
For companies with employees split between weekly, bi-monthly, and monthly payment schedules, the administration of these processes can become overwhelming because it diverts focus from day-to-day operations and other functions that require resources and time.
Instead of hiring more people to handle these processes, it’s smarter to outsource them entirely. TES providers have made it their core business to take over the responsibility of handling employment-related functions for their clients. These include remuneration, legal disputes, strike mitigation, employee wellness, interactions with unions, and all other human resources (HR) / industrial relations (IR) concerns which can be extremely resource intensive.
By entrusting all non-core labour requirements to a TES provider, organisations can return their focus to revenue-generating activities, giving their time and attention to the business growth and innovation that brings in the money.
Business growth support
Here, TES providers can play a supporting role in the growth of businesses by being able to meet an increasing demand for flexible resources. With the ability to manage the scaling quickly and efficiently up or down of the staff component based on changing business needs, TES providers can help their clients ensure that they are never over or understaffed.
By having a database of candidates that have already been interviewed, screened, and vetted, a TES provider can quickly source the right candidate for any position.
From fixed to flexible costs
In having their labour needs met through a TES provider, businesses gain the benefit of flexible staffing solutions at a variable cost as opposed to a fixed salary overhead expenditure, which can provide businesses with much-needed financial relief, especially in the current tough economic environment.
Pair this flexibility with the fact that payroll responsibility is shifted to the TES provider, and this gives businesses a lot more breathing room from a cash flow perspective. The TES provider ensures that their workers are paid on time, usually allowing for a 30-day payment agreement with their clients if they meet the qualifying criteria.
To play a proper supporting role to businesses that facilitates their growth, it is imperative that the TES provider chosen is reputable, certified, and compliant with all necessary laws and regulations. This means ensuring that the TES provider ticks all the right boxes in terms of Broad-Based Black Economic Empowerment (B-BBEE) status in addition to being registered and compliant with the Labour Relations Act (LRA), Unemployment Insurance Fund (UIF) and that there are good working relationships with the relevant bargaining councils.
Transparency is essential for organisations seeking to unlock the benefits of flexible employment solutions as this is the foundation for the mutual trust that is required for this business model to truly flourish.
Opinion piece by Wayne Alcock, managing director at Quyn International Outsourcing