Objective: to resolve issues related to staffing limitations
Posted: Sun Dec 22, 2024 10:18 am
Initial data: Company "A" is a regional branch of company "AA". The growth of company "A" has led to an increase in the volume of work. But the current staff is not able to cope with the flow of orders, and the policy of corporation "AA" does not allow for an increase in the staff.
Solution: After missing two important orders totaling $200,000 within a month, Company A decided to hire additional employees through an outsourcing agreement. Six different employees were hired and outsourced on a permanent basis. After eight months, Company A was able to increase the number of orders it completed.
Read also!
"How to Calculate Conversion: 3 Proven Options"
Read more
Effect: By using outstaffing services and adequate email database lists australia personnel selection, Company A was able to avoid even greater losses of orders and began to grow further. Over 8 months, the organization spent on this: S = I + T + U1 + U2 = 48,912 thousand dollars. Where I = 24 thousand dollars is the salary of new employees, T = 8,592 thousand dollars is the amount of taxes paid, U1 = 70 dollars/month x 8 months x 6 people = 3.36 thousand dollars is the cost of outstaffing, U2 = 1 thousand dollars x 12 months x 6 people x 18% = 12.96 thousand dollars is the cost of selecting 6 specialists with a salary of 1 thousand dollars per month.
At the average order level at the start, the lost profit over 8 months would have been $1.6 million, and the total labor costs to generate that amount would have been just over 3%.
Objective: to improve the management of personnel involved in temporary projects
Initial data: Company "X" is actively implementing projects, each of which lasts on average from 1 to 1.5 years. The company has a small staff, and specialists are hired for each new project. However, after the completion of the projects, most of the employees involved in the implementation are fired, which leads to significant financial costs for compensation payments.
Read also!
"Marketer's KPI - Key Indicators and Accurate Calculation"
Read more
Solution: Company X decided to transfer employees involved in projects to an outstaffing agreement. Thus, 30 people working on one project and 18 people engaged in another were transferred for 14 and 10 months, respectively. Upon completion of the necessary activities, the organization terminated the contract with the agency and did not pay compensation.
Effect: Thanks to outstaffing, Company X significantly reduced its expenses on compensation payments to laid-off employees. The estimated amounts for the first project were over 42 thousand dollars, for the second – over 25 thousand dollars. The agency’s services costs were 31.5 thousand dollars and 13.5 thousand dollars respectively, which equals 45 thousand dollars in total. The net savings were over 22 thousand dollars, which exceeds 33%.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Frequently asked questions about the outsourcing agreement
Although the outstaffing agreement is not widespread enough in Russia today, experts are confident in its prospects, and many enterprises will eventually recognize its importance. If now mainly large organizations apply for such services, then soon medium and small enterprises will appreciate the convenience of this form of work. With the right selection of a recruiting agency, conclusion of legally sound contracts and compliance with legislative requirements, outstaffing allows for significant savings.
How to attract third-party personnel under an outsourcing agreement?
The algorithm for hiring personnel under an outstaffing agreement includes the following stages:
Step 1. The customer contacts the recruitment agency, describes the required personnel. A civil law outstaffing contract for the provision of services is concluded.
Step 2. Employees of a specialized organization begin the process of personnel registration. If necessary, they transfer employees from the customer's staff. In the case of foreign personnel, for example, seasonal workers, the agency organizes all interactions with the Ministry of Internal Affairs and the Federal Migration Service.
Step 3. Hired workers begin working for the customer in accordance with the terms of the contract for the provision of personnel.
Step 4. In case of audits or problems with hired employees, the agency takes legal responsibility.
Step 5. Employees on the staff of the recruitment agency receive their wages within the agreed time frame.
How will labor inspectors react to the withdrawal of employees?
Labor inspectors have no objection if a company outsources its projects to other organizations, cooperates with recruitment agencies, or interacts with other companies under labor supply agreements.
Controllers may ask questions about the reasons for such changes. In this case, it is enough to show the economic benefits for the company. It can be justified that staff optimization helps to manage the company more effectively or gives it a competitive advantage in the market.
Inspectors may express interest only if the agency provides less favorable working conditions to the employees hired compared to similar employees in the customer company (according to Article 341.1 of the Labor Code). In such situations, claims will be directed to the agency, not to the organization.
To avoid additional questions when bringing employees on staff, it is necessary to take into account the restrictions. For example, employees can be hired under a contract with an agency for temporary replacement of absent employees or for periodic work lasting up to nine months (in accordance with Article 341.2 of the Labor Code). This period must also be reflected in the outstaffing agreement for the provision of personnel.
How will tax authorities re
Solution: After missing two important orders totaling $200,000 within a month, Company A decided to hire additional employees through an outsourcing agreement. Six different employees were hired and outsourced on a permanent basis. After eight months, Company A was able to increase the number of orders it completed.
Read also!
"How to Calculate Conversion: 3 Proven Options"
Read more
Effect: By using outstaffing services and adequate email database lists australia personnel selection, Company A was able to avoid even greater losses of orders and began to grow further. Over 8 months, the organization spent on this: S = I + T + U1 + U2 = 48,912 thousand dollars. Where I = 24 thousand dollars is the salary of new employees, T = 8,592 thousand dollars is the amount of taxes paid, U1 = 70 dollars/month x 8 months x 6 people = 3.36 thousand dollars is the cost of outstaffing, U2 = 1 thousand dollars x 12 months x 6 people x 18% = 12.96 thousand dollars is the cost of selecting 6 specialists with a salary of 1 thousand dollars per month.
At the average order level at the start, the lost profit over 8 months would have been $1.6 million, and the total labor costs to generate that amount would have been just over 3%.
Objective: to improve the management of personnel involved in temporary projects
Initial data: Company "X" is actively implementing projects, each of which lasts on average from 1 to 1.5 years. The company has a small staff, and specialists are hired for each new project. However, after the completion of the projects, most of the employees involved in the implementation are fired, which leads to significant financial costs for compensation payments.
Read also!
"Marketer's KPI - Key Indicators and Accurate Calculation"
Read more
Solution: Company X decided to transfer employees involved in projects to an outstaffing agreement. Thus, 30 people working on one project and 18 people engaged in another were transferred for 14 and 10 months, respectively. Upon completion of the necessary activities, the organization terminated the contract with the agency and did not pay compensation.
Effect: Thanks to outstaffing, Company X significantly reduced its expenses on compensation payments to laid-off employees. The estimated amounts for the first project were over 42 thousand dollars, for the second – over 25 thousand dollars. The agency’s services costs were 31.5 thousand dollars and 13.5 thousand dollars respectively, which equals 45 thousand dollars in total. The net savings were over 22 thousand dollars, which exceeds 33%.
Download a useful document on the topic:
Checklist: How to Achieve Your Goals in Negotiations with Clients
Frequently asked questions about the outsourcing agreement
Although the outstaffing agreement is not widespread enough in Russia today, experts are confident in its prospects, and many enterprises will eventually recognize its importance. If now mainly large organizations apply for such services, then soon medium and small enterprises will appreciate the convenience of this form of work. With the right selection of a recruiting agency, conclusion of legally sound contracts and compliance with legislative requirements, outstaffing allows for significant savings.
How to attract third-party personnel under an outsourcing agreement?
The algorithm for hiring personnel under an outstaffing agreement includes the following stages:
Step 1. The customer contacts the recruitment agency, describes the required personnel. A civil law outstaffing contract for the provision of services is concluded.
Step 2. Employees of a specialized organization begin the process of personnel registration. If necessary, they transfer employees from the customer's staff. In the case of foreign personnel, for example, seasonal workers, the agency organizes all interactions with the Ministry of Internal Affairs and the Federal Migration Service.
Step 3. Hired workers begin working for the customer in accordance with the terms of the contract for the provision of personnel.
Step 4. In case of audits or problems with hired employees, the agency takes legal responsibility.
Step 5. Employees on the staff of the recruitment agency receive their wages within the agreed time frame.
How will labor inspectors react to the withdrawal of employees?
Labor inspectors have no objection if a company outsources its projects to other organizations, cooperates with recruitment agencies, or interacts with other companies under labor supply agreements.
Controllers may ask questions about the reasons for such changes. In this case, it is enough to show the economic benefits for the company. It can be justified that staff optimization helps to manage the company more effectively or gives it a competitive advantage in the market.
Inspectors may express interest only if the agency provides less favorable working conditions to the employees hired compared to similar employees in the customer company (according to Article 341.1 of the Labor Code). In such situations, claims will be directed to the agency, not to the organization.
To avoid additional questions when bringing employees on staff, it is necessary to take into account the restrictions. For example, employees can be hired under a contract with an agency for temporary replacement of absent employees or for periodic work lasting up to nine months (in accordance with Article 341.2 of the Labor Code). This period must also be reflected in the outstaffing agreement for the provision of personnel.
How will tax authorities re