Press Response

DHI & CONTRACT EMPLOYMENT to The Journalist

 

1. Why does DHI hire employees on a contract basis?

DHI's standing mission is to always hire the right talent at right role at right time. The institutionalization of a three-year mutually renewable contract system for DHI and its employees is to ensure optimal retention and performance of employees, and also to facilitate non-contributors or poor performers to exit.

Today's corporate workplace has changed and is changing in Bhutan. Corporate enterprises need to set up their systems and processes in much more faster, supple and strategic ways. Organizations like ours ought to demonstrate results, and to be ahead in whatever that we do, we reckon that talented and experienced people to deliver the set tasks for a specific period of time is critical for DHI. And to do such set tasks in a term-specific employment, you certainly don't want to recruit people on permanent basis.

 

2. What are the merits and demerits of hiring employees on contract?

Either way, contract employment, has both merits and demerits, but I will focus more on the positive aspects. By looking at the circumstances that DHI has come about into its existence and also given its mandate, its preferred choice of has been for contract employees and this is proving to be a very good practice. Some of the reasons why contracting is good for DHI are:

 

  • Cost-effective, faster and suitable since DHI's works are primarily project-based that require readily available expertise in specific fields  (When your resource requirement is for short-term and immediate, why recruit on permanent basis which can be expensive, slow and may not even justify your needs for full-time positions)
  • Provides competent employees for positions that are otherwise difficult to fill-in. Required expertise has a premium to it, and when you need people with competent skills, contract employment is one of the preferred choices in the labor market today.
  • Once recruited, contract employees can start immediately, and go about completing the specific project tasks compared to developing/training a permanent employee up to the level of competence that you would otherwise require.
  • Contract employees can bring in new expertise and diversity into the organization.
  • Basic economics of hiring and retaining employees on contract can be good for the organization as well as for the contract employee. Either parties can terminate the contract – if an organization is not satisfied with the performance of a contract employee, it can easily dismiss him or her. That is why renewal of contract can be based strictly on performance outputs that employees deliver to the organization.
  • Unlike full-time employment, the organization you work for is generally not considered as your employer, instead your client or customer. And that provides an outlook towards sustaining better corporate culture.

 

3. Do you think a worker's productivity will be increased if he/she is hired on a contract basis?

That's a generally accepted understanding between an organization and a contract employee. Of course, employee productivity will depend on host of other factors. Hiring on contract is not just about increasing the worker's productivity but more than that, it is about being effective, resourceful and innovative in delivering the required outputs. Contract obligations and other terms of reference do set out the work productivity and quality levels expected from an employee and the call on whether to surpass or underperform against such mutually agreed obligations can be made by either party.

 

4. Will DHI be implementing the contract hiring system in all its owned and linked companies? If so why?

Most of our portfolio companies have already implemented their own contract system even before DHI was formed. However, we have now "Service Rules Guideline for DHI-Owned Companies 2009" in place. In line with this guideline, hiring of contract employees in all DoCs is provisioned only for positions such as heads of departments/divisions, or specialists reporting directly to the CEOs. These positions are open to competition. And in case if there are no candidates applying or fulfilling the specified requirements for such posts, concerned company can directly seek potential candidates, and accordingly due diligence of screening, interviewing and salary negotiation administered. All such hires are employed on contract so that the positions are open only on need basis. Vacancy for contract recruitment must be approved by the respective board of directors.