Outstaffing is the “rental” of a certain expert to work within the framework of the customer’s project, who is listed on the staff of the contractor company (outstaffer). This expert is a member of the client’s team along with all its other employees, and his work is supervised by managers or a specially authorized person.
The client firm pays money to the contractor firm for outstaffing according to the contract that was formed and signed earlier, and the contractor firm pays remuneration from this amount to a “leased” narrow-profile expert.
A good example: a large-scale corporation plans to thoroughly expand its business, and it needs to recruit new employees to increase its staff. According to the personnel plan, this procedure is several times higher than the annual plan.
To solve the problem, it is necessary to resort to outstaffing — new employees are accepted into the company who work together with other specialists, but in fact they are listed as employees of the outstaffer company.
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Advantages of outstaffing
Among the main advantages of outstaffing are the following:
- Exclusion of labor disputes.
When an employee signs a contract to work with an outstaffer company, rather than directly with the service customer himself, he excludes this customer from various possible labor disputes that may affect this employee. - Significant simplification of personnel management and personnel management.
All vacations, bonuses and sick leave must be issued and signed by the outstaffer company. This significantly reduces the burden on the accounting department of the client’s company and saves it from providing employees with certain social guarantees.
The outstaffer company maintains personnel documentation, administers business trips, generates advance reports, and issues various certificates that employees need. - A simple solution to financial issues. The outstaffer company itself conducts settlement operations regarding the accrual of salaries and compensation payments. The outstaffer pays taxes and fees stipulated by law, optimizes taxation, etc.
Disadvantages of outstaffing
Among the disadvantages of outstaffing, there are only 2 problems:
- There is always a risk of losing money due to cooperation with an unscrupulous outstaffer company. To avoid such a problem, you need to choose the contractor company as carefully as possible, check whether it has licenses to provide appropriate services.
- Due to outstaffing, the rate of job closures may decrease. Not every employee is ready to work in “outstaffing mode”. Therefore, there may be a certain slowdown in the employment of new employees at the enterprise. Suitable candidates may “drop out of the race”, and the rate of vacancy closure will begin to decrease.