WHAT DO LABOUR BROKERS DO?
Labour brokers provide full spectrum, specialist human resource services for a fee.The principal objective of a labour broker is to use its' internal human resource expertise to provide its clients with efficient staff. To do this Labour brokers provide the following services;
- They source staff with the required skills,
- They manage a variety of appropriate employment contracts,
- They ensure that employee administration is comprehensive and accurate,
- Labour brokers engage with the client and the staff to ensure that required productivity levels are met. Doing this requires specialist hr skills and experience,
- Labour brokers deal with any disciplinary and termination issues which arise,
- Labour brokers engage with unions, the Department of Labour and Bargaining Councils,
- Labour brokers do all the necessary legislative tax, uif and sdl deductions,
- Labour brokers pay their staff at least the wage rates stipulated in the industry agreements or the department of labour wage determinations or negotiate market related salaries for specialist skills,
- They then charge a premium for all these services in addition to the wage costs when they invoice our clients.
DO LABOUR BROKERS ONLY PROVIDE TEMPORARY STAFF?
The technical classification of labour brokers as ‘Temporary Employment Service Providers’ does not do justice to actual range of services they do provide and the value they add to the economy.
Although labour brokers provide some clients with short term and project related staff, they also provide many clients with staff on long term indefinite employment contracts.
Labour brokers generally aspire to provide indefinite long term employment opportunities to its staff with all the benefits associated to permanent employment.
WHAT ARE THE ADVANTAGES OF LABOUR HIRE?
The first advantage relates to benefiting from the scope of the human resource infrastructure of the labour broker. Using economies of scale and sharing the costs of the Human Resource infrastructure among its clients, labour brokers provide the benefits of a human resource department at a fraction of the cost. (Read Article)
This enables small business who cannot afford human resource departments to go into business.
Previously disadvantaged persons and entrepreneurs who wish to explore the business world but who are not familiar with labour laws or payroll related legislative requirements can benefit from labour broker expertise and have assurance that the brokered staff are legally compliant. Labour brokers therefore play an important role in real broad based black economic empowerment.
Government institutions can rely on labour brokers to source competent staff whilst reducing corruption and nepotism thus imroving service delivery in our country. Employment benefits payable to staff employed in this sector is fully negotiable.
Foreign multinational organizations who are not familiar with local cultures and laws find that contracting a labour broker makes it easier to invest in our country. (Read Article)
As the employer, the labour broker is accountable and responsible insofar as employment risk in concerned. This translates into reduced legal exposure for the client.
Using modern employment relations development techniques, we continuously endeavour to increase employee stability and productivity. Many of our clients have reported back to us that the increased productivity have more than made up for the premium we charge.
Our clients have benefited from recapturing management time previously spent on dealing with staff related matters. Their management can now focus on core business related matters. (Read Article)
WHERE DOES THE CLIENT SAVE COSTS?
The main cost saving relates to having the benefit of a full service human resource department at a fraction of the cost. They have the benefit of expert recruiters, hr administrators as well as industrial relations experts.
Also other typical human resource costs such as related to advertising positions, screening of applicants, payroll licenses and processing are cut out.
The cost of management time spent on dealing with hr issues is saved.
The costs associated with dealing with attorneys and CCMA awards is also cut out.
WHAT OTHER ADVANTAGES ARE THERE?
Using hr experts means you ret the right skills for the job and you enjoy the advantages of access to vast online CV databases.
There are also no pay queries, disciplinary inquiries or union meetings to deal with.
Instead of having to deal with complex remuneration and tax issues the client now benefits from once off invoicing.
A Xerox survey has shown that 10 years ago, only 2% of South African companies used labour brokers.
Today the figure is 9.4% and rising fast.
The survey also found:
89% of companies that outsource say it enables them to focus on their core business.
84% say it's an effective way to bring in new expertise.
82% say it aids in planning
75% say that it's delivered what was promised and more.
63% say it's an effective way to reduce employee numbers.
59% report that it reduces costs
WHAT ARE THE ADVANTAGES FOR THE EMPLOYEE?
Multiskilling; The employee becomes exposed to a variety of skills and industries.
Greater job security; Employees can be transferred where projects complete.
Legal protection; The employee is secure in the knowledge that the broker complies with all legal requirements of labour law.
WHY ARE LABOUR BROKERS IMPORTANT TO THE ECONOMY?
Labour brokers make significant contributions to the South African economy by keeping abreast of advanced international hr trends, attracting foreign investment, easing employment related burdens and by providing many unemployed with work experience and training.
- Labour brokers provide local companies with the means to stay abreast of international hr trends keeping our companies competitive in a very challenging economic environment.
- Through economies of scale, labour brokers can reduce hr management costs which can translate in more people being employed.
- As vat vendors and taxpaying entities labour brokers generate and contribute extensively to the receiver.
- Labour brokers spend significantly on infrastructure and engage in a myriad of related commercial activities which stimulate the economy.
- Labour brokers knowledge of local cultures and laws make it easier for foreign investors to set up in South Africa.
- Labour brokers make it easier for entrepreneurs to start up businesses.
- Labour brokers provide many people with work experience, as well as formal and informal training.
DO LABOUR BROKERS PAY EXPLOITIVE WAGES?
It is not in the labour broker or their clients' interest to exploit staff. Staff who feel exploited are not productive period.
Labour brokers are subject to the same bargaining council wage agreements and department of labour wage determinations as any other business.
These are the result of agreements which the unions actively participated in negotiating and agreeing to.
DO LABOUR BROKERS TAKE A 'CUT' FROM STAFF WAGES?
Labour brokers provide their clients with the comprehensive scope of HR services including recruitment and screening, payroll services, culture management services, internal dispute resolution services, IR services and Legal services.
As any other business a labour broker is quite fairly entitled to charge the client a premium to do this.
It must also be clarified that it is a premium being charged and not a cut taken from the employees' wages.
CAN LABOUR BROKERS EVADE LABOUR LEGISLATION?
The LRA section 198 makes specific provision for contracting with labour brokers and provides for both the client as well as the labour broker to be held responsible for legal compliance.
Labour brokers are also subject to the same labour laws as any other business. Labour brokers therefore cannot evade any form of labour legislation.
Staff who are employed with labour brokers in fact enjoy more protection as its clients can also be held accountable for contraventions in certain situations.
HOW DO LABOUR BROKERS CONTRIBUTE TO EMPLOYMENT CREATION?
Labour brokers facilitate employment. They make it easier for their clients to employ staff who otherwise might not have been employed.
Labour brokers also employ support personnel across the range such as receptionists, administrators, hr professionals and supervision and management.
OTHER INDUSTRY FACTS
- Size of industry R18 000 000 000-
- 3140 private employment agencies in SA
- 902 350 daily average brokered staff in SA
- 408 646 daily average brokered staff in services industry.
- 32% temp to permanent conversion each year
- 83% black employees
- 50% previously unemployed
- Clients across all sectors
- R112 000 000- annual skills levy
- Global brokered staff 31.6% in SA only 13%
E-mail:
marius@labourbroker.co.za 
