Differences between an outstaffing agreement and outsourcing

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When outsourcing, a third-party company is assigned to perform a certain part of business processes, which is not included in the previous agreement. This is the main difference between these concepts, but not the only one. When outstaffing, an employee is allocated a workplace, he performs certain job responsibilities and receives a salary for this.

In other words, he works as a regular full-time employee, but for a certain period of time. And in the case of outsourcing, the employee's task is to perform only the assigned part of the duties. He does not deal with other aspects of the company's activities.

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Alexander Kuleshov
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The table makes it easier to understand the differences between outsourcing and outstaffing agreements:

Parameter Outsourcing Outstaffing
Target

Delegating the execution of certain business processes or functions of your company to third-party firms.

Providing the customer with competent employees prepared to perform tasks.

The place where the activity takes place

Remote cooperation, in which the customer is provided with the final result, be it a project, product or service. The entire process of work is carried out on the territory of the company providing outsourcing services.

All work is carried out in the customer's office. External employees, along with other team members, follow the company's charter and internal rules.

Contracts concluded

Provision of services and data protection (confidentiality).

On the provision of temporary personnel.

What is the payment for?

The completed task is paid for, taking into account its volume and quality of execution. The customer does not need to worry about salaries, taxes, bonuses, sick leave and vacations.

Payment is made for the finished result. The work schedule of employees and other details are of no interest to the customer, the main thing for him is the quality of execution.

Trained personnel provided by an outstaffing company does not require the customer to pay for salaries, taxes, bonuses, sick leave and vacations.

These hired employees work in the office of the company that has applied for the outstaffing service. All stages of work are under the control of the customer. He sets the rules of the work process and monitors their observance. And, of course, pays for all work activities.

Types of risks

Disclosure of sensitive information.

Financial losses due to poor quality of service.

Violation of centralization of budget expenditure management.

Tariffs need to be revised.

Difficulties with taxation of costs.

Issues raised by labour inspectors.

Advantages

Reduce costs by 20-30%.

High quality performance of specialized tasks not related to the client’s main activity.

Stable result.

Reduction of labor costs by up to 50%.

Availability of personnel even for specializations with low demand.

Reducing staff turnover.

The tax system is much simpler.

The process of collaboration

The customer pays only for the service. He has no right to impose any conditions on the specialists involved.

The customer gets access to a certain number of employees (their number is specified in the contract). The execution of the agreement can be entrusted to any organization, including recruitment agencies.

Legislation in force in this area

In accordance with the provisions of Article 779, paragraph 1 of the Civil Code of the Russian Federation, a contract for the provision of services is concluded.

In accordance with the letter of the Federal Tax Service No. 20-12/066875, the agreement is a contract for the provision of services.

Article 56, paragraph 1 of the Labor Code of the Russian Federation (as amended in 2016) contains a ban on temporary employment.

According to paragraph 6 of Article 18.1 of Federal Law No. 1032-1, an employee may be excluded from the staff if he meets a certain set of conditions.

The difference also concerns the nature of the work performed under outsourcing and outstaffing agreements. In the first case, this is most often associated with the performance of intellectual work, while in the second case there are no restrictions on the type of tasks performed.