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When signing an outstaffing contract, specialists will perform certain work for the host enterprise, while the staff continues to be registered with a private employment agency.
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More and more companies are moving away from traditional ways of managing people in favor of more innovative methods. So what is the essence of such a new, but already quite common concept as outstaffing https://peiko.space/service/it-outstaffing ?
Outstaffing: what is this procedure
If you want to know the essence of outstaffing, and what it is in simple words, then this concept can be described as the withdrawal of staff from the staff. There are three parties involved in this process: the host company, the recruitment agency, and the hired employees. The actual employer of specialists is precisely the intermediary company, and labor relations arise with it. When signing an outstaffing contract, specialists will perform certain work for the host enterprise, while the staff continues to be registered with a private employment agency.
Thus, the intermediary company transfers part of its personnel for another enterprise for temporary use.
Financial benefits from outstaffing
Most are interested not only in the question: “Outstaffing: what is it?”, But also why such a procedure is needed. Traditionally, companies have hired employees to perform the tasks they need, so why change anything? Moreover, you will have to pay for the services of an intermediary company.
On the one hand, everything is true, because such services cannot be free. But if we consider everything in more detail, and then make the necessary calculations, we can understand that outstaffing is very profitable financially.
It should be noted that the process of hiring employees is quite lengthy and laborious. At the same time, if you remove specialists from the staff, you can reduce costs for:
search for a specific job. You can apply to a special recruitment agency both in order to withdraw existing employees from the state, and in order to hire new ones. At the same time, most intermediary companies have a wide base of available employees. Thus, you will not need to spend time and effort searching for suitable specialists;
personnel management. Since the employee does not work for you, you do not need to form his personal file, draw up various certificates, sick leave, take him into account when submitting statistical reports, and so on. Thus, the burden on personnel officers is significantly reduced (as well as the required salary for this service);
wages and related taxes. All this will be handled by a recruitment agency. So you can save on your own accounting service.
Large enterprises that use outstaffing can reduce their costs for these items up to 5 times. Most companies apply for such a service precisely because they are looking for additional financial benefits.