• John Macedo

Should You Have an HR Department? Hiring Internally Cost VS labour-hire cost

Updated: Jul 26


What is an HR Department?

The industry has long been considered a risky place to work. Construction workers are often exposed to hazardous materials and working conditions, and the high labour costs associated with construction projects can make them a target for theft and fraud.


Outsourcing HR functions and responsibilities

As a result, construction companies have increasingly turned to the HR department to help manage these risks. The HR department is responsible for all the paperwork associated with hiring construction workers, from background checks to insurance forms.




The Benefits of Having an HR Department

✳️labour costs in the construction industry are always an important consideration. In addition to the cost of materials, the labour required to complete a project can represent a significant proportion of the overall cost.


The biggest advantage of HR

One advantage of having an HR department is that they can help to manage these labour costs. They can also help to ensure that all workers are properly trained and inducted before they start work on a project. This can help to avoid accidents and delays, which can save both time and money. Another advantage of having an HR department is that they can help to resolve any disputes that may arise between workers and management.




How to Decide if You Need an HR Department

If you're running a construction company, at some point you'll need to ask yourself whether or not you need an HR department. It's a tricky question, and there's no easy answer. labour costs are one of the biggest factors to consider.


✳️In Western Australia, the cost of hiring skilled labour has been rising steadily for the past few years. In New South Wales, the skilled labourers market is even more competitive, and skilled labourers are in high demand. As a result, labour costs can eat into your profits if you're not careful.


▶️How Complex is your business?

Another factor to consider is the complexity of your business. If you're a small company with only a handful of employees, you might be able to get by without an HR department.



The decision is entirely up to you

Ultimately, there's no right or wrong answer when it comes to deciding whether or not to have an HR department. It's a decision that depends on your specific business needs.


If you're not sure whether or not an HR department is right for you, don't hesitate to speak to a labour law expert for guidance.


Hiring Internally vs Labour-Hire Cost

▶️Internal Hire process

The in-house recruitment process starts with creating a job advertisement, screening applicants and shortlisting.


The next step involves interviewing the potential candidates to narrow it down before deciding on one person for an interview where they will be asked questions about their skillset or qualifications that match what is needed by your company's standards; this could include things like salary negotiations if there has been no discussion yet between both parties regarding compensation packages when joining up as employee(s).


Finally comes background checks which make sure every candidate fulfils all requirements such as WorkSafe laws



▶️Labour Hire process

In the modern world, there is no shortage of work. With so many people competing for positions and opportunities in this competitive industry- everyone from multinational corporations to small businesses needs help finding talent that they can afford, especially with necessities like healthcare coverage!


That's where Labour Hire Companies come into play: taking on a lot more than just employment rights by managing everything associated such as payroll management services (which includes paying wages), reference checks/background inquiries etc., all while providing clients access through one affordable monthly fee which covers both hourly rates plus taxes + insurance.


Labour-hire companies Benefits

✅External labour-hire can provide numerous benefits for construction companies, including reducing labour cost, increasing labour flexibility and minimising hired labour risks.


One of the main advantages of using a labour-hire company is that it can help to reduce labour costs. This is because labour-hire rates are usually lower than the cost of hiring permanent staff.



The more the workers the less the labour cost

In addition, labour-hire companies often offer discounts for bulk bookings, meaning that construction companies can save even more money by outsourcing their labour needs.


​👉🏻Another benefit of using labour-hire is that it increases labour flexibility. This is because construction companies can vary the number of workers they hire depending on the amount of work that needs to be done.


Pay for what you get and not what you have

This means that construction companies only have to pay for the labour they need, making it easier to manage labour costs.


​👉🏻Minimising labour risks is another key advantage of using labour-hire. This is because when construction companies outsource their labour needs, they are not responsible for managing employee Relations or payroll.


This means that construction companies can avoid the potentially costly and time-consuming problems associated with managing employee Relations and payroll internally.




HR and public liability insurance

Labour costs in the construction industry account for a large percentage of the total cost of a project. To control these costs, many construction companies hire labour from outside their local area.


The importance of Insurance

This type of insurance covers the costs of injuries to third parties and damage to their property. It is important to note that liability insurance is not the same as workers' compensation insurance, which covers the costs of injuries to employees.

✳️Workers' compensation insurance is mandatory in some states, such as New South Wales, but it is not required in others, such as South Australia.


To protect their employees and themselves from the risks associated with construction work, construction companies should ensure that they have both public liability insurance and workers' compensation insurance.


labour-hire rates and cost breakdown

The hourly rate paid to a worker does not just correspond to the work done but involves many other payroll benefits and insurance covered by the employer.


✅Payroll Benefits

This includes taxes and leaves, such as annual leave, sick days, public holidays, and other types of leaves stated by the law.


✅Insurance and other expenses

This includes workover, public liability and damage insurance, personal protective equipment costs and administrative fees.





▶️Can your business afford not to have an HR department?

The recruitment market is competitive and it's getting more so every day. With all these new competitors popping up, you may be wondering if hiring internally would be cheaper than relying on temporary workers from a Labour Hire Company like ours!


✳️We're here to answer any questions about how much things cost when looking at both ends: as in what do employees' costs exactly come down to - their wages or benefits package included- but also why using this alternative might make sense no matter who does the work


HR costs make you bleed money.

It can be tough to decide whether or not to have an HR department. On one hand, it can seem like a waste of money to hire someone when you could just use a Labour Hire Company instead.


✳️But on the other hand, hiring internally has its own set of costs that you need to take into account. In this blog post, we will compare the cost of hiring internally and using a Labour Hire Company. We will look at both the wages and benefits package for employees, as well as other associated costs. Let's get started!


Want to give labour hire a try TODAY?

▶️Our services won't cost you more money, on the contrary, it will save a lot of money, time and stress to hire our skilled labourers.


Managing a worker is just as important as keeping them happy and motivated. You have hours invested in managing the bookkeeper, not only because it takes up time but also for their emotional well-being so they can perform at/her best level every day!


✅With all the problems that can arise on any construction site, it's important to have an experienced and reliable crew.


However, if something does go wrong with one of your workers or they get sick then you'll need a replacement ASAP! It is also up for debate as to what happens when their morale drops - should I fix this problem myself?


What about injuries from accidents at work? These questions might be resolved by outsourcing these tasks because dependable professionals will take care of everything without fail so there isn't anything left undone when things finally calm down. Get in touch today and get see if










Looking for Workers / Looking for Work?

9 out of 10 people who view our content are either looking for work themselves or trying to find extra workers for warehouses or construction projects around Sydney.

 

Click one of the buttons below and learn all about how Spades Labour hire can assist with your recruitment needs!

Super fast response!

New roles daily.

A FREE Bonus for you ◀️

From years of experience dealing with people in the construction industry (Workers - Foremans - Project managers), we've noticed that most of the problems happen due to a lack of communication skills.

👉 We wrote our own Delegation Manual that gives you a 5-step-guide that will END your briefing problems once and for all.

Your labourers and tradies will

listen ➡️ understand ➡️ execute

flawlessly.

x-Delegation-Manual-isolated.png
Profile-Pc.jpg
linkedin-icon.png

JOHN MACEDO

Founder and Director.
I believe together we can create a "people first" Australian Construction Industry 

Call me to discuss

your labour hire needs