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 transfers less important areas to a contract labour company. This company then uses its own staff to fulfil the tasks. For its part, the ordering company does not need to find its own labour force.
In addition, the contract for work then also functions as a kind of upstream trial period. The employees of the contract for work company, who often enough perform their work independently but at the location of the ordering company, are observed. If an employee proves their worth, they are taken on by the main company. This is in fact what politicians want and is therefore a positive development.
However, with the increasing use of contractors, their employees often also appear as a de facto peripheral workforce. This means that they appear in 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 subcontractor only processes orders and is not bound by instructions, it can move its resources freely between different ordering companies and thus never have expensive overcapacity, while still being able to react positively 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. Here, workers who are not better paid and qualified are kept from doing a job for which they were actually hired to perform simple tasks. This would be the case if the core workforce had to take on all tasks. Instead, a capacity is built up expressly for carrying out the simple tasks, which is then paid correspondingly low wages.
Further savings for the ordering company are the elimination of a personnel reserve. As the labour contractors are available when needed, the main companies can concentrate their staffing levels on what they need for normal operations. In addition, there are no costs incurred for management. As entire areas of responsibility are transferred and the contractors work independently, the ordering company saves on expensive management staff.
Finally, the costs associated with the recruitment of new employees and their dismissal are eliminated. This includes the process of searching for and selecting the right candidates, their training period and then the costs incurred for the handling and termination of employment relationships. This also includes legal costs if dismissed employees wish to sue.
The increasing use of work contracts
Flexibility, efficiency, reduced costs, simpler management - these are all factors that significantly promote the use of contracts for work and labour and contractors. Accordingly, the extent to which they are utilised is increasing, as are the areas for which they are used.
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 working more and more 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 differs according to sector and company. Costs are almost always at least partially involved. It is simply cheaper to obtain unskilled labour through a contract manufacturing company, who are given simple tasks to carry out.
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 more favourable to concentrate on the core business and thus generate a good profit and use the profit to employ a company for partial work for which this partial work represents the core business. This means that the ordering company 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 responding positively to it by 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 the freelancer who can work at his or her preferred time to the personnel planning office in the labour contracting company, which can take 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.
Contracts for work can also be used to tap into special, still dormant potential in the labour market. This includes women and older employees in particular, 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 work 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 necessary, we provide tools and machines. Together with them, we draw up a contract for work.
As a personnel service provider, we have specialised in all types of Recruitment from Eastern Europe specialised. In addition to the Temporary workers from Eastern Europe, we also organise Contracts for work from Eastern Europe. We support you in all areas whether Production, Craft, Construction, Industrial assembly, Logistics in contracts for work with Staff from Poland or Eastern Europe.
