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Released at: 01:06, 05/12/2014 HR CONSULT

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Labor subleasing remains a new concept for many businesses though it has been officially recognized by the Government for more than a year. However, as Ms. Nguyen Thi Thanh Huong, Head of Payroll & HR Outsourcing Services at Talentnet Corporation explains, the service is an indispensable tool for enterprises in developing countries.

Most organizations and workers still have trouble distinguishing labor subleasing from seasonal employment. Could you explain the difference?

Labor subleasing involves contracting labor from one firm to another for a fixed long- or short-term period. Basically, seasonal employment is the short-term form of labor subleasing. For example, a firm may need to find a temporary replacement for a receptionist on maternity leave. This would be considered a six-month period of seasonal employment. But if the firm requested a temporary receptionist from another firm, this would be considered labor subleasing.

In reality, labor subleasing services have existed in Vietnam for over ten years but the Labor Law only officially recognized the service in amendments in 2012. This was a huge development, supporting many firms in resolving employee needs during times of economic pressure. In particular, what if a firm only needs employees during peak times or lacks a manager supervising a large number of employees? HR outsourcing provides firms with flexible choices, allowing them to avoid certain costs while remaining effective. Meanwhile, the employee gains the opportunity to cultivate their skills in various working environments, developing their confidence and knowledge.

What has been the feedback from those accessing involved in labor subleasing services?

We have just carried out a survey in Vietnam of more than 600 employees with a contract with Talentnet and being outsourced at over 50 companies. The results show that over 60 per cent feel secure when entering into the contract, over 90 per cent can distinguish the role between the lessor and the lessee, 48 per cent feel they receive adequate consideration from both companies, and 35 per cent believe that they can develop multiple skills by working in various environments.

What is your response to concerns that labor subleasing may lead to employees being deprived of their rights?

When the labor subleasing provider recognizes human capital, especially contractors, as an “asset”, collusion is unlikely to occur. In the long term, such practices would create distrust among employees and eventually they would resign. I believe that when a firm chooses this service, they will have suitable policies that create tight bonds between employees.  
Moreover, organizations accessing labor subleasing services hold their human capital in high regard, since they are still the “face” of the company when  they work with customers. So it is essential for both parties to ensure equality and employee rights. Selecting a reputable labor subleasing company, with sufficient advisory ability, is imperative.

(*) This column was prepared in co-operation with Talentnet Corporation. To obtain more advice on Vietnam’s labor market, email nguyen.t.an.ha@talentnet.vn.

The nature of HR outsourcing services is to support enterprises, providing them with more time to focus on core objectives and reducing administrative tasks. Companies providing human resources may also provide advice and timely assistance on matters regarding the law, or finding new jobs for employees that have resigned.
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