Outstaffing

Outstaffing is the ‘hiring’ of a specific expert to work on a client’s project, who is employed by the contracting company (outstaffer). This expert is part of the client’s team, along with all its other employees, and his work is supervised by managers or a specially authorised person.

The client firm pays money to the contracting firm for outstaffing according to the contract that was formed and signed earlier, and the contracting firm pays remuneration to the ‘rented’ subject matter expert out of this sum.

A good example: a large-scale corporation is planning to expand its business thoroughly, and it needs to select new employees to increase its staff. According to the personnel plan, this procedure exceeds the annual plan by several times.

To solve the problem, it is necessary to resort to outstaffing – the company accepts new employees who work together with other specialists, but in fact they are employees of the outstaffer company.

Benefits of Outstaffing

Some of the major advantages of outstaffing include the following:

1. Elimination of labour disputes. When an employee signs a contract to work with an outstaffing company rather than directly with the service customer itself, it excludes that customer from the various possible labour disputes that could affect that employee.
2. Significant simplification of human resources and personnel management. All holidays, bonuses and sick leave must be processed and signed off by the outstaffer company. This significantly reduces the burden on the client company’s accounting department and saves it from providing employees with certain social guarantees. The outstaffer company maintains personnel records, administers business trips, generates advance reports, and issues various certificates required by employees.
3. Simple solution of financial issues. The outstaffer company itself carries out settlement operations regarding the accrual of salaries and compensation payments. The outstaffer pays taxes and fees stipulated by the legislation, is engaged in tax optimisation, etc. Disadvantages of outstaffing

Among the disadvantages of outstaffing there are only 2 problems:

There is always a risk of losing money due to co-operation with an unscrupulous outstaffing company.

1. To avoid this problem, it is necessary to choose the contractor company as carefully as possible, check whether it has a licence to provide the relevant services.
2. Outstaffing can reduce the speed of closing vacancies. Not every employee is ready to work in ‘outstaffing mode’. Therefore, there may be some slowdown in the hiring of new workers for the company. Suitable candidates may ‘drop out’ and the rate of closing vacancies will start to slow down.