Outstaffing

Outstaffing is the way to employ staff through another legal entity (professional outstaffing company) without changing the in-house staff size.

Outstaffing assumes that an employer and outstaffing company conduct a civil contract specifying services rendered ("rent of personnel"). The employees of the host company legally become the employees of the outstaffing company and continue to work at their regular positions at the host company. Outstaffing company is in charge for administration of payroll calculation and personal records management.

As a professional outstaffing company TalentPool becomes the legal employer of outstaffed personnel and undertakes the following functions:

Enroll employees onto its staff and formalise labour relations with them
Manage payroll and pays fees, sick leave compensations, annual leave compensations, business trip allowances, etc.
Calculate individual income tax and other taxes and transfer them to the appropriate tax authorities as stated by the government regulation
Process labour books and time sheets
Process sick lists, holiday records, other paper work
Process obligatory and compulsory medical insurance policies
Open individual bank accounts to transfer salaries

Outstaffing brings the following advantages and opportunities for TalentPool clients:

To transfer expenses to the services expenditure item
To raise performance indexes per employee
To reduce expenses due to reduction in staff numbers in Book-keeping and Human Resources office
To maintain control over employees' work with reductions in administrative and bookkeeping work
To guarantee on-time payments of salary and compensations by the outstaffing company
To reduce legal responsibilities to the employees due to the absence of labour law obligations
To reduce labour, tax and judicial authorities' claims and penalties
To eliminate or reduce dismissal costs at the project completion
To try new employees without setting employment relations
To start business in different regions and cities without opening an affiliate or a representative office
To use best practices of an expert outstaffing company
To concentrate on key business issues and to increase efficiency of the company

Possible reasons for an employer to use outstaffing:

Restriction in headcount (number of employers, salary amount)
Heavy work load of Human Resources and bookkeeping staff members
Lack of Human Resources and bookkeeping staff members
Lack of affiliates in regions
Extension of new employees probation periods
Reduction of company risks in low-qualified employees employment

More information:
Outstaffing — Hows and Whys
What Is Personnel Outsourcing, And Is It Here To Stay?
Temporary Staffing and Staff Leasing in Russia