The belief is hiring employees instead of using subcontractors will strengthen the company's labor force by teaching the needed skills in-house. For the off-site construction industry, it could mean more vertically integrated construction and less dependence on subcontractors charging higher rates and giving less quality work.
The government is considering how it can encourage contractors to increase direct employment and cut reliance on self-employed workers.
Department for Business, Energy and Industrial Strategy deputy director of construction Fergus Harradence said the government will draw on past experience to promote more direct employment. “We are currently looking at how we can use some of the mechanisms that are under our control to encourage higher levels of direct employment in relation to the delivery of government projects, building on successful examples of things like the Olympic Development Authority,” he said.
“I would say that this is going to be one of our objectives over the next few years; we will want to see more people directly employed,” he added.
More direct employment would see skills improve, Harradence claimed. “Our general position is that we support direct employment within the industry for exactly that reason. There is a correlation between direct employment and greater investment in skills and also in greater investment and more successful management of things like health, safety and wellbeing of the workforce, because firms tend to regard their people as an asset rather than just people that they have employed to do a job,” he said.
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