Sunday, February 19, 2012

Contract hiring


As the environment becomes more competitive for a company, the resulting cost pressures normally lead to an increased tendency of the firm to hire and fire workers as per the market demand. This just-in-time contract hiring policy has many problems associated with it.
Loss of security
A major problem is the loss of security which a company offers to its workers in the form of health, legal rights and retirement benefits. Independent workers face lower earnings, fewer benefits and legal rights, truncated career paths, and dimmer prospects for retirement income security. 

Training
A company is less likely to send/impart training at its own cost to temporary workers. Thus they will not receive expensive training which is needed by them to keep abreast of technological developments so as to enable them to secure good jobs in the future. Instead they would have to spend from their own pockets to gain access to newer training and skill development. Thus HRM training function may shift from the company to the independent workforce. 

Training becomes even more relevant when newer technologies get introduced within the company. Since the independent worker can simply be replaced by a more competent independent worker.

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