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LABOUR-ONLY VS DIRECT EMPLOY: CALL IT A DRAW
00:00 16 Mar 1995
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The so-called self-employed now account for 75% of the total labour
force.
The immediate attraction for the contractor is that the system offers him a highly flexible labour force and substantial cuts in overheads. There are, however, plenty of traps. The unwary contractor may well find the courts treating his 'self-employed' operatives as directly employed and thus entitled to all the benefits of direct employment. And the savings in overheads tend to be matched by higher rates demanded by the self-employed.
At the same time, there is an argument that this labour will, on average, provide 5-10% higher productivity. It is a claim based on labour-only workers being a closely knit, highly motivated, experienced, and stable group.
Once again the CIoB concludes that research in this area is quite inadequate. Parallel arguments can be used in favour of direct labour providing higher productivity.
'It seems wisest to make the conservative assumption that there is no intrinsic difference in productivity between directly employed labour and labour-only subcontractors,' the CIoB concludes.
Other aspects of labour flexibility, however, can provide more certain savings.
Multi-skilling is not regarded as a realistic proposition. But the acquisition of 'top up' skills which enable an operative to complete a wider range of tasks is already a fact of site life on Shell's ground-breaking Stanlow agreement. And the thrust of engineering construction's training policy is to develop four core craft trades plus a range of basic skills common to all trades.
This kind of approach was signposted by a major skills study of 1988 from the Construction Industry Training Board. The central finding was that the traditional boundaries to each trade are being simultaneously eroded and added to.
Operatives now rarely perform the complete range of tasks associated with their trade. And they frequently carry out some tasks usually associated with other trades.
The implications for formal training programmes and labour flexibility are evident. This pattern does mean jobs being done by one man instead of two.
Roger Elford, director of training at the BEC, commented: 'There has been little direct follow-up to that aspect of the 1988 report. But the NVQ system as it is now being developed does provide the structure for that labour flexibility.'
The immediate attraction for the contractor is that the system offers him a highly flexible labour force and substantial cuts in overheads. There are, however, plenty of traps. The unwary contractor may well find the courts treating his 'self-employed' operatives as directly employed and thus entitled to all the benefits of direct employment. And the savings in overheads tend to be matched by higher rates demanded by the self-employed.
At the same time, there is an argument that this labour will, on average, provide 5-10% higher productivity. It is a claim based on labour-only workers being a closely knit, highly motivated, experienced, and stable group.
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Once again the CIoB concludes that research in this area is quite inadequate. Parallel arguments can be used in favour of direct labour providing higher productivity.
'It seems wisest to make the conservative assumption that there is no intrinsic difference in productivity between directly employed labour and labour-only subcontractors,' the CIoB concludes.
Other aspects of labour flexibility, however, can provide more certain savings.
Multi-skilling is not regarded as a realistic proposition. But the acquisition of 'top up' skills which enable an operative to complete a wider range of tasks is already a fact of site life on Shell's ground-breaking Stanlow agreement. And the thrust of engineering construction's training policy is to develop four core craft trades plus a range of basic skills common to all trades.
This kind of approach was signposted by a major skills study of 1988 from the Construction Industry Training Board. The central finding was that the traditional boundaries to each trade are being simultaneously eroded and added to.
Operatives now rarely perform the complete range of tasks associated with their trade. And they frequently carry out some tasks usually associated with other trades.
The implications for formal training programmes and labour flexibility are evident. This pattern does mean jobs being done by one man instead of two.
Roger Elford, director of training at the BEC, commented: 'There has been little direct follow-up to that aspect of the 1988 report. But the NVQ system as it is now being developed does provide the structure for that labour flexibility.'
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