For various reasons, some companies choose to recruit contract employees or staffing agencies when they need additional human resources (HR). Both require HRD to find new people to help companies complete various jobs. Then, where is the difference? The following is the full explanation.
1. Understanding contract employees and staffing agencies
As the name implies, contract employees are recruited by a company to carry out contract work. That is, the company entered into a working relationship with contract employees for a job that lasted for a certain period.
Meanwhile, the staffing agency is an effort to transfer work to third parties. In general, the staffing agency is divided into two categories, namely the submission of part of the work or the employment of staff (employment staffing agencies) and labor service providers or employment agencies.
2. The working period of contract employees and staffing agency
The state has a rule that explains that an Indefinite Time Work Agreement may only be held for a maximum of two years, with a one-time extension for a maximum of one year. If an extension occurs, it must be notified to the contract employee concerned a maximum of seven days before the agreement ends.
Then, for the staffing agency employees, the calculation of their working period depends on the type of contract agreed with the company that recruited them. According to national law, these can be divided into two, namely:
A. If employees will be employed for permanent and continuous work, the company staffing agency must bind them as permanent workers through an Indefinite Time Work Agreement.
B. If employees are employed for work to be completed on time, for example for one or two years, the staffing agency company can contract them through an Indefinite Time Work Agreement.
3. Types of contract employee work:
a. Work that is temporary or once completed
b. Work that is expected to complete in a maximum of three years.
c. Seasonal jobs.
d. Work-related to new products, new activities, or additional products that are still on probation.