Today outstaffing sprinkles in business circles with increasing frequency. Some consider it as a panacea, others as a regress for business. Obviously, this phenomenon does not suit all types of entrepreneurship. What is this tool and how to use it?
Outstaffing in simple words
Currently, many companies in developed countries use outstaffing as an essential element in organizing their activities.
Outstaffing is a special technology for staff management, which consists with transferring employees to another company.
The use of outstaffing has benefits not only for companies, but also for employees, as they can enjoy the full social package and the various benefits that ordinary small businesses can not provide.
Advantages for business
Outstaffing, first of all, is aimed at actively optimizing of the enterprise and reducing the costs.
What gives outstaffing:
- Reducing the expenditure of funds for the maintenance of employee’s records and administration, getting rid of the need to calculate and transfer taxes for each employee, and draw up the relevant documentation.
- Reducing the costs of finding qualified personnel and retaining valuable employees in their workplaces, getting rid of other problems associated with recruiting.
- Ability to use the labor of workers to perform seasonal work without registering in a permanent staff.
- Solving problems associated with filling out «unpopular» vacancies.
- Reducing of legal responsibility for employees.
- Absence of the problem of excessive staff turnover.
- Ability to optimize staffing table as much as possible.
- Ability to use a simplified taxation system, even if the number of employees exceeds the allowable rate.
- Growth of investment attractiveness of the enterprise.
- Getting rid of problems related to inspections of working personnel by third-party services (for example, migration services).
Outstaffing can effectively reduce the number of employees, and therefore reduce the amount of work of the personnel department. It is possible to transfer almost all personnel (except for administrative and managerial) to a position «out of staff». In this case, the need for personnel service disappears completely. Also, the time and money expenses for staff recruitment and hiring are reduced.
In the event of disputes arising from labor law, the responsibility is divided between the contracting company and the outstaffing organization, in some cases the responsibility is completely shifted to the organization providing the services of outstaffing.
Employees hired «out of staff» are not counted as enterprise’s staff and are not taken into account in determining the size of a company by the number. Therefore, it is possible to function as a small enterprise and enjoy preferential tax regimes by resorting to outstaffing services.
Outstaffing in practice
The most popular example of outstaffing is employees «out of staff» using with seasonal, periodic works and projects.
For example, launching a new product for the end user requires a large number of sales representatives who will promote products. It is inappropriate to hire specialists for the duration of the project, and at the end to put people out of work. Outstaffing services are simply necessary. For the time of promotion of a new product, an external organization provides sales representatives for temporary disposal.
In general, outstaffing is used in cases where a company has to go beyond its normal activities. For example, when a new product / service appears, you need to advertise it and attract as many new customers as possible to the company. Hiring for this purpose a whole staff of sales representatives, marketers, etc. is unprofitable if the main direction of the firm’s activity is not connected with innovation and promotion. Therefore, the owner of the company can hire a sufficient number of people listed in another company. People will have the opportunity to earn extra money, and the outstaffing company will provide advertising and promotion services.
Otherwise, most of our clients use our outstaffing services for months and years, especially in IT.