Outsourcing and Outstaffing, Is There Any Difference?

Do you agree that in order to achieve a positive result in business, each process, without exception, must be performed by authorized professionals in a certain field? But at the same time, the content of a highly specialized team of specialists to complete each process is not cheap.  You could read article on SpdLoad website where described all details about Outsource Web Development.

If you and your company are interested in minimizing the risks and costs of production processes that are not related to the main specifics and areas, but are only related, this article will be useful to you.

Another problem that every business owner faces is tax cuts and optimization of staff costs.

The solution to these problems has long been found by experts in the west. There you will not be surprised at the terms outsourcing and outstaffing, the difference and advantages of which you will learn from this article.

Outsourcing and outstaffing – both concepts denote a special type of relationship between the company and employees outside the main working staff, which play an important role in the development of the organization and the implementation of individual processes.

In order to understand how these services differ, let’s look at them individually.

What is outsourcing in a company?

This term means the transfer of certain tasks, justified by the agreement, to specialists in the relevant field from another company. Literally translated as external sources “or” resources from outside. “

What is the difference between outstaffing and outsourcing?

Simply put, this technology of personnel management allows you, without the need to control the process itself, to get quality work done on time you specify.

A distinctive feature of this service from staff rental and leasing is the presence of the business process itself and professional support, confirmed by the drawn up contract.

There are two main concepts – outsourcing of personnel and business processes. The first type is the transfer of responsibilities of certain departments of the enterprise (for example, the accounting department, personnel department, computer equipment maintenance services) to the executors from the provider company.

At the same time, business process outsourcing is the deepest form of service, which implies a long and close relationship between the client and the outsourcer. This type of cooperation involves transferring to the contractor not a single task, but a whole segment within their business. Unlike staff outsourcing, it may not be limited in time and a fixed budget.

In addition, the service helps to solve the following tasks of your business:

Search and selection of personnel for a certain period to complete the tasks.

Maintaining full reporting, personnel procedures and paperwork of the enterprise.

Calculation of wages, taxes and contributions

Preparation of documentation and necessary reporting for regulatory authorities

Accounting for personnel documentation.

In what situations would it be beneficial to use outsourcing instead of regular hiring?

Attracting external labor resources will be conveniently used when necessary in personnel for a relatively short period, for example, for seasonal work. You can get a team of highly qualified specialists for a specific period of time, which will help reduce staff costs.

This service is also resorted to when there is a shortage of qualified employees and when the institution cannot afford the expansion of staff. After all, the more employees work in the organization, the more taxes. And often, an increase in the constant number of employees leads only to large costs and burdens on accounting departments.

In addition, you will no longer need to maintain a huge staff staff. All questions regarding work with personnel, including taxes, are decided by the outsourcer company. You will get high results from the business process without worrying about working conditions, workplaces, control and risks associated with the implementation of the task.

What is outstaffing?

Outstaffing is very often confused with outsourcing or accepted as one of its varieties. But this statement is far from the truth. Literally, the name of the service is translated as “off-state”.

Differences between outstaffing and outsourcing

Outstaffing is understood as the formal dismissal of employees and the simultaneous adoption of an outstaffing company. At the same time, the workplace and responsibilities do not change. From a legal point of view, the employee will be an outstaffer, but will continue to follow the instructions of his former management.

Outstaffers provide their customers with the following list of services:

The transfer of personnel from the customer to its own staff.

Conclusion of an employment contract with an employee.

Maintaining full reporting on employees.

Timely pay.

Supervision of compliance with tax and labor laws.

Assessment of workplaces.

Safety briefing in the workplace.

Conducting a physical examination.

Opening a payroll project and tax assessment.

Disability calculations.

Registration of sick leave and travel expenses.

The solution of conflicts and disputes with staff.

Freelance personnel management provides the client company with legal protection in resolving personnel issues. At the same time, all risks associated with employees are transferred to the outstaffer company, which is a legal employer. For example, disputes with the FMS, or industrial accidents, including death.

In addition, outstaffing will help any company to develop dynamically in the regions, while not opening its representative offices and branches there.

So what is the difference?

Thus, analyzing these management technologies, the differences between them are that outsourcing is the transfer of authority to the contractor to carry out a specific business process, and outstaffing is the registration of staff in the contractor’s staff.

In outsourcing, the contractor searches for employees for the customer’s company and draws them up in its own staff, and when it is hired, the contractor draws up the employees of the customer’s enterprise.

To summarize:

If you need to quickly find qualified personnel, solve a number of business problems in another region or not according to your profile, feel free to use the Outsourcing service.

If you already have a staff of employees and you need to reduce tax expenses or expenses for accounting and personnel services, use the Outstaffing service.

In addition, the outstaffing service allows you to completely legalize foreign personnel and forever forget about the checks of the relevant structures.