One of the most profound changes in Australian workplaces over the last few decades has been the expansion of indirect forms of employment. This has occurred not just through the creation of new casualised or 'gig' industries, but also through changes to the ways in which existing companies structure their workforces.
Increasingly, the boundaries of a company’s workforce will stretch beyond its direct employees, to include labour hire agencies, sub-contractors, service contractors, independent contractors, and even gig economy workers. Many companies now outsource a large proportion of their activities to other businesses (which in turn, often outsource again).
This “fissuring” of workplaces has led to the stratification of working conditions—sometimes within the same workforce—and is a key factor in wage suppression and growing inequality.
It has also introduced or increased a number of business and operational risks for companies that may have medium and long term impacts on company and shareholder value. These include:
- Poorer Occupational Health and Safety (OHS) outcomes
- Increased possibility of involvement in modern slavery, labour exploitation and wage theft
- Lower levels of worker engagement and loyalty
- Loss of human and intellectual capital
- Reduced visibility of workforce composition, including diversity
- Reduced workforce development, due to less access to training and skills acquisition
ACCR is currently engaging companies and investors on their use of indirect employment. Companies still have legal and other responsibilities to their entire workforces, not just their direct employees, and investors need to know how these responsibilities are being fulfilled.