Global Cloud Team

Outstaff company, its pros, and cons

Outstaff Development Company

Transfer of business personnel to external management is carried out using so-called outstaffing service, which helps to optimize staffing and tax expenses. They will help the company to increase investment attractiveness and increase its profitability.

Outstaffing is a reasonably new business structure. It became increasingly popular as it is an excellent option for saving businesses finances and organizing a personal time for employees. It requires high responsibility, both from employees and from management.

Outstaff development companies provide third-party organizations with their personnel for temporary or long-term work. The peculiarity of this form of recruitment is that employees remain registered to the outstaffing company.

Drafting the contract

Personnel outstaffing services are provided to the customer on the terms of a temporary contract. Due attention should be paid to this document to ensure the economic benefits of the agreement. It must include specific and complete information about the rights and obligations of the parties and the services provided.

The functions performed by the selected specialists in the interests of the customer party, and the requirements for their qualifications, are described in detail.

The contractor undertakes to bear the costs of providing social guarantees, transfer taxes, pay salaries to employees involved in the framework of the civil contract.

Advantages of outstaffing

In comparison with direct hiring of labor, the use of the outstaffing service gives the customer many definite advantages.

The main idea behind outstaffing is that companies hire employees from around the world, without being tied up to a specific location.

By re-registering the company's employees in an outstaffing agency, the entrepreneur achieves economic benefits like:

Through outstaffing, the company's management significantly reduces its costs and increases revenues.

Disadvantages of external staff maintenance

Concerning outstaffing, there are several myths about its shortcomings:

Employees are removed from the permanent staff and re-registered with the outstaff company. This encourages them to look for new jobs because of the feeling of second-rate. In practice, organizations have been cooperating with proven personnel for years because the working conditions and wages remain the same.

The contractor needs to pay for personnel management services. However, such costs are more than offset by the savings that the company seeks. Fraud and security of personal data of the company are guaranteed by signing a bilateral agreement. It remains only to find a worthy outstaffing company and re-register their employees with it.

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