The pros of using a Labour Broker | Articles | Umkhonto Labour Holdings

Labour brokers remove the burden of non-generating functions and components within organisations. This is achieved this by providing administration, human resources, labour relations and the placement of suitably qualified temporary and contract labour on a site for the duration of a contract. This is especially beneficial to employers that require the flexibility to draw staff as and when required, and without the threats and costs associated with permanent employment. In addition, it reduces costs, increase efficiencies and re-focus critical resources.

Unfortunately, the term labour brokerage has a bad connotation associated with it as a number of companies have not followed the labour broker legislation; paid their staff well below minimum wage, exploited their staff members; have not complied with the legislative requirements set out by the department of labour; have not supplied the correct contract employees as specified by their client; have not offered a comprehensive service; and so forth. Due to this, the legitimate and law abiding brokers have taken a lot of slack because of the fly by night companies that have the audacity to call themselves a labour broker.

The services of a labour broker include taking away the burden of tedious, pain staking, time consuming, non-revenue generating activities such as sourcing the correct candidates for a job; employing and up-skilling them; conducting all the relevant HR, administration and payroll functions; and ensuring other related levies and costs (such as UIF, pension, Workmen’s Compensation, Skills Development, etc) are up to date and paid.

A labour brokers’ responsibility to its clients include:

• Supplying its clients with contract employees at competitive
rates, as and when required
• Ensuring that only staff that meet the clients requirements are
placed on a site
• Ensuring that all employees are medically fit before they are placed
on a contract
• Ensuring good communication with employees regarding their roles and
responsibilities in relation to the client’s workplace, its policies
and practices
• Conducting thorough orientation and induction training before
employee are placed on a site
• Implementing disciplinary procedures as per legislated labour laws
• Continuously assess its employees
• Registering all staff members with the relevant statutory bodies
• Maintaining comprehensive records on each employee
• Providing clients with a payroll report after each payroll run

Reasons why companies use labour brokers is because they can gain access to resources that are not available internally; they can keep a headcount to a minimum; they can now reduce and control operating expenditure; the employee risk is transferred; the burden of sourcing, screening and employing workers is removed as a flexible staffing solution with the right set is provided; the labour broker imports greater efficiency at a lower cost, thereby enhancing competitive capabilities; companies no longer have to carry the threat or cost associated with permanently employing staff, the risks associated with unfair dismissal or other labour disputes as a consequence of the ever changing labour legislation.

In addition, there are no recruitment, advertising or administration costs or time spent selecting potential staff members; employee’s salaries and wages are paid, statutory obligations and pay queries are attended to; the burden of dealing with union meetings and demands, wage negotiations, strikes, unfair dismissal cases and CCMA disputes are removed; companies no longer have the costs associated with labour consultants or attorney fees; all staff members are employed by the broker, and therefore cannot claim unfair dismissal from the company; and the labour broker is always updated on the latest developments and changes in the labour environment and have the resources to keep abreast of the changes in the legislation and regulations set out by government.