Any company forms the staff of its employees based on criteria for ensuring business performance. Nevertheless, sometimes it is necessary to face a situation when the cost of funds and time for the selection, adaptation or professional training of new specialists is not economically feasible. In this case, staff outstaffing comes to the aid of entrepreneurs, acting as an effective tool for attracting freelance employees.
Consider what the essence of these services is, what is the subject of the contract with outstaffer, what are the advantages for a customer working in conditions of fierce market competition, what risks he may face and how to avoid them.
Outstaffing: revealing the concept
Acting in the interests of the client, the outstaffer provides him with competent specialists with the necessary level of qualification, experience and professional knowledge for the period of the implementation of a certain project or seasonal work .
In other words, staff outstaffing is the registration of a provider company, which is actually a formal employer for the personnel involved, and some of the employees of the customer company. At the same time, all routine work related to personnel management, compliance with civil and labor law (including the provisions of federal legislation on the employment of foreign citizens), transfer of taxes, accrual and payment of wages, falls on the shoulders of the outstaffer.
Briefly about foreign experience
USA, Canada, countries of Western Europe are well acquainted with what staff outstaffing is. Over the decades that have passed since the first outstaffers appeared (during the recession of the 70s of the XX century), they managed to appreciate the potential of material benefits from the services of temporary provision of freelance specialists.
For clarity, you can give just a few numbers. For example:
- outstaffing services market volumes are estimated at billions of dollars (7 billion - Germany, about 38 billion - the UK, 80 billion - the USA);
- the number of employees employed under the contract with outstaffers - from 7 to 10 million people (in the countries of the European Union and the USA, respectively);
- the growth of demand for the supply of outstaffing industry annually is about 30%
The specifics of the Russian market
In Russia, the start of the popularity of this type of service began in the late 90s of the last century. First of all, this was due to the economic crisis, which was persistently pushing entrepreneurs to solve the issue of optimizing personnel policy through the rational and economically sound use of labor resources.
Today, staff rental (outstaffing) is a completely mundane and familiar practice in Moscow and many other major Russian metropolitan areas. Initially, the ranks of “retired staff” were replenished by specialists of narrow qualifications who performed a small segment of work of a certain profile, and top managers. Over time, they were joined by ordinary freelance workers (for example, cooks, workers in packaging workshops or warehouses, stewards, waiters, movers, etc.).
Preparation of contract
Staff outstaffing services are provided to the customer on the terms of the contract. In order to really ensure the economic benefits of the agreement and to prevent the possibility of undesirable questions from representatives of the supervisory authorities, due attention should be paid to this document. Without fail, it should include specific and maximally complete information about the rights and obligations of the parties, the boundaries of their authority, the terms of interaction and the services provided.
The functions performed by selected specialists in the interests of the contracting party, as well as the requirements regarding the qualifications of these non-staff employees are described in detail. The amount that will be paid to the outstaffer for the services provided is clearly specified. In this case, the contractor agrees to bear the costs of providing social guarantees (payment of sick leave, benefits, etc.), transfer taxes and insurance premiums, pay wages to employees involved in the framework of a civil law contract. In addition, the outstaffer takes over the resolution of labor disputes and disagreements.
When is staff outstaffing necessary?
Consider the feasibility of attracting a certain number of employees for temporary work on the example of a commercial organization.
- The company is expanding the range of products being marketed and needs sales representatives who will actively stimulate demand for new brands. It is indisputable that in this situation it is much more profitable to use workers “from the outside” than to fill them out with a staff taking into account the subsequent dismissal.
- The company has an employee who perfectly copes with his duties, perhaps he is not even fully loaded. However, for the period of his illness or vacation, the services of outstaffers will be quite appropriate.
- The staffing table does not provide additional specialists for the implementation of the seasonal project, or there is a need to carry out work that was not planned under the current budget.
Benefits
In comparison with direct hiring of labor, outstaffing allows a customer to receive a number of tangible advantages. What is it about?
- The burden on the personnel service and accounting department is reduced, as a result, administrative costs are reduced.
- There are no risks associated with holding liable for violations of labor laws (including laws on the labor activity of foreign citizens) and the occurrence of insured events.
- There is an opportunity to ensure maximum correspondence of the number of employees to the actual volume of work and flexible personnel management.
- The money required for the organization of training and staff development is saved .
What is the difference between staff outsourcing and outstaffing?
Outsourcing means the actual transfer of certain functions of the customer organization to an external (external) contractor. Thus, labor and financial resources are freed up, which can be used to resolve issues requiring priority consideration and increased attention. What else is the key difference between business models such as outsourcing and staff outstaffing?
The task of employees hired under an outsourcing agreement is to provide the agreed services (bookkeeping, personnel records, legal support or otherwise). Moreover, they are employees of the outsourcing company and can carry out their activities on the territory of the customer or on the territory of the contractor without direct interaction with the client of the outsourcing company.
Outstaffing is of a different nature. This service involves providing the customer with certain specialists who work at his location, without directly entering into labor and civil law relations with him.
Outstaffing as a tool for hiring labor migrants
It is no secret that the hiring of foreigners in the Russian Federation is associated with certain difficulties caused by strict requirements of the migration legislation, which provides for significant penalties for violations, and the presence of quotas. In these conditions, outstaffing of foreign personnel avoids many problems.
The outstaffer company carries out all personnel procedures within the framework of existing laws, drawing up a full set of permits, which gives the right to attract foreign citizens to work. As a result, the customer saves on the purchase of specialized teaching aids or magazines and the training of full-time specialists in courses and seminars on hiring labor migrants. But most importantly, he relieves himself of any claims from the labor inspectorate, the migration service or the prosecutor's office.
"Pitfalls" procedures
For objectivity, it should be noted that, in addition to advantages, staff outstaffing can be fraught with hidden risks. In particular, there is a possibility of concluding a knowingly unfavorable contract with a company specializing in the provision of services of this profile.
Such a document containing provisions that are contrary to legislative norms may be invalidated in court, and therefore, will become the starting point for considering the issue of bringing the contracting party to legal liability and imposing penalties. Avoiding negative consequences will allow cooperation with professionals who take into account all the requirements of the FMS and the Federal Tax Service when developing the contract.
When is outstaffing prohibited?
The right to provide personnel is vested exclusively in legal entities with appropriate accreditation (No. 116- dated 05/05/2014). The ban on outstaffing (as a type of activity) applies to individual entrepreneurs and companies that do not meet certain criteria in terms of the size of the authorized capital, seniority of the head, etc.
In addition, federal law prohibits the use of outstaffers to replace workers participating in strikes when hiring crews of river-sea vessels and sea vessels, or specialists to perform work in industrial areas with harmful working conditions (grade 3, 4) and hazardous facilities (I, II class).
In other cases, with a responsible professional approach, staff outstaffing is an excellent solution for business representatives interested in optimizing the staffing, reducing costs and maximizing concentration on solving strategic problems.