I know companies have to empower their employees however removing them from their payroll system and putting them again under a company name I don’t think that’s empowering.
Several companies have applied this strategy however there is some disadvantages attached to that. 1st their loyal long time employee is not empowered in business skills, people skills and human resources. Another thing is this people are now faced with challenges that the company was facing in running that particular department however the employees were not aware of.
For an example if their employee was in the distribution department now he has to deal with issue of supplier delivering the urgent stock late. He has to rush to get the supply to the client abusing his employees along the way cos he has to cut costs. He is now faced with phone calls from client with regard to wrong stock or incomplete stock. He is now faced with maintenance of said truck bought 2nd hand and because he is only starting out now he has to the truck himself. Staff obviously he will take experienced staff with their problems cos the company could not provide an alternate option for them.
If it was creating jobs why can’t let the now empowered employee hire their own staff. Or even better give him the option of acquiring the assets needed to start the company from somewhere else instead of taking over the problems the company always had.
Another challenge is that the said empowered employee can never offer his or her services to other people in the industry. They have a contract with their former employer and only them. My question is when will the empowered employee now become a fully fledged entrepreneur you know independent? Never. Companies empowering employees must also assist in helping them acquire the necessary skills to run a business.
How does he pay tax, as an individual or company? Seriously we need to assist in that SMME market. There is a serious gap and I don’t think there is enough help offered there.