10 Jan Labour Hire vs Contractor – Understanding the Difference

What are the Main Differences Between Labour Hire & Contractors?

Australia has over 70,000 registered construction companies. Each of these companies operates slightly differently to the other, however, a common area for discussion between these companies is whether it is more beneficial to use contractors or labour hire. And so in this post we’re going to take a look at what are the main difference between labour hire vs contractor and when, where, why would you use one instead of the other.

What’s the Difference? Contractors vs Labour Hire

Contractors are generally engaged by a builder/construction company to take ownership of an entire section of the project. They are responsible for the labour, materials, machinery, tools and delivery of their designated section of work.

Labour Hire Agencies are generally engaged as and when required to assist with the site as a whole and to assist the various contractors on site. They generally wouldn’t be responsible for a specific area/section of a project, large machinery or materials.

Benefits of Using a Contractor

Now that we know the key difference between using a contractor and a labour hire agency we’ll now have a look at some of the benefits of using a contractor.

• Contractors take full responsibility for their section of the job.
• Contractors manage the delivery and distribution of the material for their section of the job.
• Contractors manage their own labour hire.
• Contractors who specialise in a niche industry often have better availability of workers for that specific trade or skill and more control over them due to contract agreements etc.
• Contractors often provide all the large equipment and tools specific to the tasks/work they are contracted in to complete.
• Site managers spend less time managing the above items from day to day.

Benefits of using A Labour Hire Agency

Now that we’ve looked at the benefits of using a contractor let’s have a look at the benefits of using a labour hire agency.

• Labour hire agencies allow complete flexibility as the project evolves. Numbers of workers can fluctuate up and down daily without causing the agency any issues. You are not obliged to keep workers for days you don’t need them.
• Labour hire agencies have access to a huge database and pool of workers.
• Most labour hire agencies would have one main point of contact/account manager. Therefore, making it much easier for the site manager to order multiple trades/skilled workers rather than having to contact each contractor individually.
• Labour hire agencies handle all the recruitment, interviewing and payroll for the workers. Therefore, saving site management time in resourcing suitable contractors and companies to complete the work in hand.
• Labour hire agencies don’t charge penalties for rain days, bad weather, delays with other trades e.g. if the labour is cancelled 1hr before the job start time.
• Labour hire is essentially risk-free. If you don’t like the workers, you can send them back and have them replaced immediately.
• Labour hire agencies don’t just focus on one trade/skill and can offer solutions to all your on-site needs.
• Labour hire agencies generally get more exposure and a better response to their job advertisements due to investment in SEO, marketing etc. Therefore, sourcing the skills required is easier.

Differences Between Labour Hire and Contractors

To summarise, there are clear benefits to using both labour hire agencies and contractors. However, it is worth bearing in mind that a lot of contractors do tend to use labour hire to source new workers when they take on multiple projects and their resources are stretched. Therefore, engaging a labour hire agency directly alongside your contractors would be our best advice. This could save you a lot of time and money rather than being charged the labour hire rates plus the add on costs of having these workers on-site through your contractor.

Specialists in Sydney Labour Hire

If you would like to have a conversation with one of our specialists today regarding how labour hire may benefit your business then please don’t hesitate to send us an email to info@hunterlabourhire.com.au, call us on 02 8985 2019 or contact us online now.