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Personnel outstaffing is a method of business preservation in crisis conditions


Conditions of doing business in Russia change every day. And the one that adapts to the changing situation in the fastest and the most efficient way will be today's leader. Probability of a world crisis, international sanctions and currency rate instability all make national businessmen search for new ways to optimize the work of a company.

Personnel outstaffing is one of the most up-to-date methods of countering different negative phenomena in the business sphere. This is HR technology which is still little known in Russia; it helps to considerably decrease expenses of the organization, decrease the load on the payroll, accountancy office and HR department, and reduce the tax burden.

Every year, more and more companies appear in Russia that use the advantages of outstaffing. They not only receive considerable financial advantages, but also disclaim legal responsibility by engaging a third party to manage some of its staff.

Outstaffing: How It Works

The essence of the outstaffing service is simple: some of your employees are documented as employees of another organization (outstaffing provider company). However, all the employees continue to work in their places and perform their duties in full.

In simple words, you retain the required number of qualified employees, but you are not bound by any HR, legal, financial or other responsibility in respect of them. The providing company, being the actual employer, does everything: salary payment, document flow, taxes payment and many other things.

Advantages of Outstaffing

The use of outstaffing is an incredibly profitable and a more and more widely used practice. What are the exact advantages of outstaffing?

  • Optimization of the number of employees: your company officially employs as many people as you need.
  • Reduction in tax payments: you don't pay any more excessive deductions, and you can change the form of reporting.
  • Reduced load on the accountancy office and HR Department: fewer employees means less paper work, reports, routine duties and bureaucracy.
  • Reduction in financial expenses: salary, leave allowance, sick pay, insurance and other payments are now provided by the outstaffing agency.

And these are not the only advantages of the outstaffing. The head of each company is sure to find its advantages here, based on the peculiarities of conducting business in a particular sphere.

Outstaffing: Who Will Benefit

Absolutely everyone! In conditions of financial instability, it is impossible to find a company which would not need painless staff unloading and a reduction in the tax burden. Today, we frequently see the cases when companies leave only the General Director and Chief Accountant and outstaff the rest of the employees.

There are types and areas of business where outstaffing brings special profit and is used more often:

  • Organizations that use the simplified taxation system (STS). According to the law, the number of employees in such a company should not exceed 100 persons (30 in some areas). Staff expansion involves considerable costs, and outstaffing helps to resolve this problem.
  • Companies that are facing redundancy problems. Outstaffing helps to avoid collective redundancies by optimization of expenses. If it is impossible to avoid termination of employment contracts, it is much easier and less expensive to do so on outstaffing conditions.
  • Organizations that employ foreign citizens. Russian laws have a lot of trouble for those that use foreign workforce. And responsibility for errors in this sphere is very high. Outstaffing of foreign citizens will help avoid unnecessary risks and simplify work in these situations. The providing company (outstaffing agency) will undertake all the responsibilities related to salary documentation and payment, and you will receive a qualified employee.
  • Representative offices of foreign companies. Foreign businessmen that open their subsidiaries in Russia often do not quite understand the realia of national legislation. That is why outstaffing in Russia is an ideal solution for those that are not acquainted with the details of bookkeeping and HR records management.

Who provides the outstaffing services?

In Russia, it is special agencies and large HR companies that provide outstaffing services. These are organizations that provide this service on a professional basis and have mastered the procedure of outstaffing to the minutest detail. Here it will be possible for you to use outstaffing for the required number of employees quickly, reliably and in a legally correct way.

Moscow is the most developed city in Russia in terms of outstaffing. However, there are now large players on HR market that can offer this service in practically any city of the country. Thus, outstaffing is becoming a more and more demanded service not only among large companies in the capital but also among small regional companies that wish to optimize their expenses.

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