Which is Better, a Company-hired Employee or a Contract-based (Contractual) Worker?

Will I Regret Hiring You?  (courtesy of doitsolowithnolo.com)

When I was the Plant Administrative Services Manager of an Integrated Textile Mill south of Manila, I was in charge of a 1,200-man workforce of which about 300 were contract-based (contractual) workers and the rest were unionized regular (company-hired) employees. There lies the dilemna faced by many charged with managing a work force, to wit:

1.  In the Philippines, a contract-based or contractual worker must be regularized if his/her work tenure reaches 6 months of continuous work.  In almost all cases, contractual workers are let-go by the time their service reaches 5 months.

2.  In a skill-based industry such as a textile mill, our expatriate-technicians used to say it is a waste because the first month or two, the contract worker would just be learning the task \& hence exhibit high quality defects and just as she goes over the learning curve, she is laid-off.

3.  The unions have always condemned the use of contractual workers as this was a means to evade unionism (contractuals are not members of the union).

Company-hired or Contractual?  (courtesy of learnthat.com)

4.  When I asked our then Spinning mill manager where the bulk of the contractual workers were, it was mentioned that contractual workers are more conscientious with their work as they know that they can be let-go anytime if their performance do not meet company standards whereas regular workers tend to take their job for granted as they know they cannot just be removed from their jobs. (In my plant, we have 3 unions of which one of the unions calls themselves the February 21 Movement, a militant group of the Federation of Free Workers in the Philippines)

Of course, not all regularized employees are like that (I believe most regular employees care for their jobs especially as jobs are hard to come by) but one cannot help to play it safe and just bite the bullet (learning curve ills) & stick to contractuals.

Reach truck operator putaway of goods (courtesy of mhedcm.blogspot.com)

Take for example a Reach Truck or Forklift operator for a Logistic Distribution Center:

1.  The Reach Truck could cost upwards of P1.4 Million (USD 28,000);

Reach truck operator in a Warehouse

2.  Because operating a specialized equipment like a Reach Truck requires skills & years of experience, it is very difficult to hire good operators;

3.  A Reach truck operator would tend to know where all the SKUs are located in a Warehouse Racking System because of the day-in/day-out putaway/picking activities that he does & that has a very distinct bearing in the speed of storage or issuance of products;

4.  So, do I let-go of him after 5 months or not?

5.  Or do I just outsource the function and let the manpower agency worry about what to do with the reach truck operator if he turns out to be a "Bad Egg"?



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