In theory, the contract for work and services gives an ordering company everything it needs to buy in special expertise when it is needed. In addition, bottlenecks in personnel planning can be covered by transferring less important tasks to a contractor. Order peaks can also be handled by expanding existing capacities at short notice through contracts for work and labour. Ultimately, a contract for work and labour offers the ordering company the opportunity to concentrate on its core business and leave other parts of the work to others who can perform these parts better and more cheaply.
Contract for work and labour - theory and practice
While the theory is still valid today, the practice has developed beyond this. Contract labour companies are also known as recruiter utilised. This means that if a company needs more staff, it outsources less important areas to a subcontractor. The subcontractor now has its own staff and takes on the tasks so that the ordering company no longer needs to hire its own labour.
In addition, the contract for work and labour can also be regarded as a kind of preliminary trial period. The employees of the contractor company, who often enough perform their work independently but at the location of the ordering company, are observed. If an employee performs well, they are taken on by the main company. This is exactly what is intended - and a good thing for everyone.
However, with the increasing use of contractors, their employees often also appear as a de facto peripheral workforce. This means that they appear at the customer's company and carry out work there that was previously carried out by the customer itself. This takes place over a long period of time, so that the ordering company saves on permanent staff and the associated costs in this area. As the subcontracted company often works more cheaply, it is ordered again and again instead of expanding the main company's capacities in this area. In other words, the subcontractor effectively replaces part of the core workforce.
This development can also be seen as positive. Here, the main company saves costs, which allows it to remain competitive. At the same time, work that is often carried out by unskilled labour is carried out by a company that has established itself in this area. This means that it can adapt and react flexibly to demand by moving labour from client to client and thus always following demand.
The savings from contracts for work for companies
The savings for the subcontractor result from several factors. Firstly, these are simple tasks that can be carried out quickly. This makes it easy to find suitable labour. As the labour contracting company only processes orders and works independently, it can distribute its resources flexibly between different clients. This means there is no costly idle time and it can still react quickly to increasing demand.
In addition, the subcontractor has the relevant experience when it comes to rapidly increasing or, if necessary, reducing capacity. This means that it has exactly the right skills at hand when it comes to increasing or reducing personnel.
Salaries & cost savings
The salaries for the simple jobs that need to be done are also very low. In this case, the more qualified workers are not held back by very simple tasks. This would be the case if the core workforce had to take on all the tasks. Instead, a capacity is built up specifically for carrying out the simple tasks, which is then paid correspondingly low wages.
The ordering company also saves money because it does not have to keep any replacement staff on standby. Because labour contractors step in when needed, companies can limit their personnel to what they need for normal operations. In addition, there are no costs incurred for management. Because entire areas of responsibility are transferred and contractors work independently, the ordering company saves on expensive management staff.
The costs associated with the recruitment of new employees and their dismissal are also eliminated. This includes the process of searching for and selecting the right candidates, their training period and then the costs incurred for the processing and termination of employment relationships. This also includes legal costs if dismissed employees wish to sue.
The increasing use of work contracts
Flexibility, efficiency, lower costs and simpler management - these are all clear arguments in favour of using contracts for work and labour and contractors. Accordingly, the extent to which they are used is increasing, as are the areas in which they are utilised.
This intensive utilisation means that the contract for work and services is becoming more and more widespread in its application and that ordering companies are also increasingly working towards transferring more and more areas to another company. Instead of being able to do everything on their own, companies want to work together as a whole. Where exactly the attractiveness of the offers lies varies from sector to sector and company to company. Costs are almost always at least partially involved. It is simply cheaper to hire unskilled labour through a contract manufacturing company to carry out simple tasks as a service.
At the other end of the spectrum are demanding projects carried out by experts. Here, the focus is not on low prices, but on buying in expertise at a good rate. While this is more expensive than employing a skilled worker to apply the expertise, it is cheaper overall. The purchased expert is only paid for the preparation, while the skilled worker as a permanent employee always expects a wage, even if his expertise is not currently required.
Then there is efficiency. It is cheaper to concentrate on your own core business and thus make a profit. This profit can then be used to commission a company that specialises in precisely this type of work. This means that the company placing the order does not have to be a jack of all trades and does not have to have a large management team to keep all sub-areas under control.
By focussing on a core business with a core workforce that is sufficient for day-to-day operations, expensive idle time is avoided. This makes personnel planning much easier and still allows us to react flexibly to workloads.
Conclusion
The contract for work and labour has become an integral part of the economy. It simply offers too many advantages for too many market participants and on too many levels. As a result, the labour market is also reacting positively to it, with it being used more and more by different companies in different sectors.
There are many opportunities here for the workers concerned. They can find a way into the labour market. They can gain experience and, depending on the contract work company or working as a freelancer, expand their qualifications.
Employment relationships can be organised more flexibly. This ranges from freelancers who are free to decide on their own working hours to the personnel office of a labour contracting company, which takes into account the life models of applicants with a small workforce.
Digitalisation has given a further boost to the contract for work. This means that projects in specialised areas can be processed completely independently of location. This also allows freelancers and contractors to be commissioned by any customer anywhere in the world.
Work contracts can be used to find new labour. This primarily includes women and older employees as well as young newcomers who do not yet have any experience.
Contracts for work with skilled workers from Eastern Europe
Are you looking for personnel for a specific task in your company? With our company and our partners, we can advise you in the area of labour contracts or service contracts from Poland or Eastern Europe.
We take care of accommodation and logistics, legal matters and outsourcing or production in Poland or Eastern Europe. If required, we provide tools and machinery. We draw up a contract for work and labour together with you.
As a personnel service provider, we have specialised in all types of Recruitment from Eastern Europe specialised. In addition to the employee leasing from Eastern Europe, we also organise Contracts for work from Eastern Europe. We support you in all areas whether Production, Craft, Construction, Industrial assembly, IT sectors - with Staff from Poland and Eastern Europe as part of contracts for work and labour.
