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Labour law changes outsourcing rules
SOMPORN THAPANACHAI
The 2008 Labour Law requiring contracted workers be paid fair benefits has triggered a change in operations among outsourcing firms toward the delivery of work instead of staff, according to the international employment services firm Manpower (Thailand) Co.
The law, effective since late May, states that employers have to pay fair benefits to contracted workers compared to permanent staff, leaving the provision open to interpretation by employers.
Some employers convert their current contracted workforce into permanent staff, allowing them to receive bonuses and other welfare benefits.
Some companies still outsource their non-core businesses but use a new model with the outsourcing firm taking responsibility for the work and receiving fees based on performance.
''Under the old system, our job was finished when we delivered staff to clients. Now we get paid based on performance or outcome of the work, not on providing staff. This is a movement toward a true outsourcing model,'' said Manpower's country manager Simon Matthews.
For example, Manpower provided 30 to 40 staff recently for a call centre, and in the past, that meant its job as a firm was finished. But under a new agreement, Manpower is also responsible for managing the numbers of calls, turn-down rate and everything else that goes into making the business successful.
Mr Matthews believes the new law is aimed at providing benefits to workers whose rights may be abused by unethical employers. However, there are some concerns among industries about the competitiveness of Thai labour in the region as the implementation of the law adds costs.
Manpower has 20-30 clients under its new model and it expects that to double next year. The company needs to establish an understanding among old clients unaware of the benefits of the new model.
He found that the role of a human resource firm had shifted from a transaction base into a business partner giving consultation to help clients find solutions.
''This is a win-win situation as we come to share risk and reward with clients. If we deliver solutions, our clients have better performance so we get better rewards,'' said Mr Matthews.
Due to the transition period for the application of the new law, Manpower revised down its revenue growth this year to 20% from 30-40% earlier from 1.7 billion baht last year in revenue. In the first half of this year, it recorded 18% growth in revenue from placing both permanent and contracted staff.
High-demand positions included sales and marketing, IT, engineers and operators. It currently has 500-600 positions at the shop floor level to fill.
Manpower, which just celebrated a decade of business in Thailand, wants to expand with more branches as well as new business lines in offering cross-border recruitment. The company is in the process of seeking a new licence from the Labour Ministry to become a legal provider of Thai workers to overseas markets such as Taiwan, Singapore, South Korea and Malaysia.
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