How the Outsourcing System Works: Pay, Contracts and Disputes
The outsourcing system explained: how outsourcing companies supply contract workers, who pays the wages, and what happens when clients and staff clash.
An outsourcing company supplies workers to other companies. The outsourcing system works on the concept of contract employees who are placed at other companies that need staff for certain positions. A client company can order or request workers from an outsourcing company to fill roles that are often not key positions in the client's business. Your company can use outsourcing services in Jakarta for outsourced staff such as security guards, cleaners and even mining workers.
Outsourcing companies supply these workers according to market demand, and they must also comply with Law No. 13 of 2013.
In general, outsourced workers are employed under a specific work contract whose length is agreed between the outsourcing provider and the client company. A number of internal agreements between the two parties are also not disclosed to the assigned workers. For that reason, outsourced workers in Jakarta are expected to perform to the best of their ability under the terms of their work contracts.
How Outsourced Workers Are Paid
An important thing to know about outsourced workers is how they are paid. An outsourced worker receives a salary from the outsourcing company that assigned him or her. The client company, meanwhile, pays the outsourcing company an agreed amount for a set duration, both fixed from the start. So the client company does not pay its workers directly. The money goes through the outsourcing company as an intermediary.
Outsourcing companies generally earn their income by taking a share of the worker's salary. The amount is not fixed, but it can be anywhere from 20-40% of the employee's salary. Other benefits, such as the THR (the religious holiday bonus) and severance pay, are the responsibility of the outsourcing provider. The client only pays the fee agreed between the two companies.
Problems Between the Client Company and Outsourced Workers
Conflict between an outsourced worker and the company where he or she works can happen. The client company has no direct authority to decide the worker's fate. This is where the outsourcing company steps in as the mediator between the two sides. The client company also has no authority to make an outsourced worker permanent. If it is satisfied with the worker's performance, it must negotiate a new contract with the outsourcing company at the end of the contract period.
The decision to extend a contract is a decision between the two companies. One obstacle that comes up often is that the outsourcing company in Jakarta inflates the price of its workers when it offers the client a contract extension. This can be a burden for the client, especially if the position is not a key one at the company. In that case, the work can be shifted by bringing in outsourced workers.
Here is an article on an introduction to the outsourcing system in employment. We hope it helps.
