One of the key factors in business success is the ability to focus on the essence of the activity and concrete results. At the same time, without routine processes, the company will not be able to operate. Therefore, businesses are forced to engage in document management, reporting, personnel accounting – actions that do not bring money, but which are required by law.
The situation is complicated when a company enters the market of another country or opens a new direction. Instead of concentrating on what generates income, it has to study local tax payment processes or labor law. Even when hiring local specialists, it is difficult for foreign management to assess their qualifications in such matters. At the same time, ignorance of the laws creates significant risks – fines or other sanctions for mistakes fall on the budget of the company, which during the expansion does not earn as much as it invests. The problem becomes especially acute in countries that are in the process of constant reform, for example, in Ukraine.
The answer to this challenge for management can certainly be outstaffing. This solution, which is legal and acceptable for both Ukrainian and foreign companies, allows the company to resolve most of the routine issues that concern business.
What is outstaffing?
This is a service provided by the contractor (outstaffer) to the client company. From a legal point of view, the essence of this service is as follows: the staff of the outstaffer employs a specialist or a team of specialists, and the contractor provides them “on lease” to the client company. However, in fact it is a comprehensive service that allows businesses to transfer the following issues to the contractor:
- accounting in accordance with the law;
- personnel document flow;
- contracts with staff;
- ensuring the labor rights of employees;
- accrual of salaries, bonuses, fees, bonuses and other rewards;
- accounting and payment of taxes, contributions to funds, etc .;
- admission and dismissal from work, leave, etc.
- staff search.
Registration of the relationship between the client and the outstaffer
The outstaffing company and the client company enter into a service contract. According to it, the outstaffer hires certain employees needed by the client company, and then leases them, concluding a number of related agreements. They alternately regulate the relations of the participating parties:
- outstaffer (a company that “leases out” a specialist or specialists);
- a client (a company that “leases in” a specialist outstaffer or specialists);
- in fact, a specialist as such, who, while remaining in the staff of the outstaffer company, works in the interests of the client, performing his tasks as an employee or contractor.
Settlements between the parties are regulated by the same documents and are carried out as follows:
- the outstaffer issues invoices to the client;
- the client transfers the payment to the outstaffer;
- the outstaffer pays the salary of the specialist as his full-time employee, although the latter works for the client company.
Advantages of outstaffing for the client company:
- opportunity to focus on business;
- security regarding labor law and tax legislation;
- absence of any claims or legal disputes from employees;
- simplification of personnel accounting;
- savings on personnel management issues;
- cheaper financial management;
- minimization of time in case of liquidation of the enterprise;
- lack of personnel and financial problems in reforming the company.
Why Leasing Service?
We have been providing outstaffing services since 2004. During this time, we successfully cooperate with international and local companies of various profiles, sizes, industries, taking into account the background of constant legislative and economic changes.