I work for a contractor and I’ve always wondered why they hire us when I get paid $30 a hr and obviously my boss is making a cut on top of that. But the company I’m painting for only pays there employees $18 per hr? Wouldn’t it be easier just to hire an extra employee to preform simple tasks like painting, shoveling stone, ect these are all none skilled labor jobs.
In: Economics
I’m going to assume you are talking about temps. I had 1/3 of my crew that were temps. It is better because you can get more if you get a rush of orders and cut back when you are slow so you aren’t paying people to stand around. I also used the agencies as hiring pools. People will put up a good show for a few weeks but they will fall back into their bad behavior in a few months. Those that keep working well for the 3 month agreement I would keep and fill full time positions with.
If you hire a person for 10 dollars an hour, your net cost after benefits and payroll costs is around 16 dollars an hour. The temp agency charged me 14 per temp and paid them 9.50 so it’s actually cheaper.
Compensation is more than hourly/daily wage. Regular employees should have access to health coverage, retirement benes, vacation. In some states you need to be notified weeks in advance if there are layoffs. I’ll bet there is some insurance considerations. IE: a worker getting hurt will increase your worker comp coverage costs, but you hire a contractor who hires you, even if its yourself, hey it ain’t my problem.
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