Make a choice between outsourcing or outstaffing with the “Financial Chain Corporation”
In order to save their financial resources, many companies shift from conventional work methods to modern ones. So today most of them choose outsourcing or outstaffing for organization of their production processes.
Company managers in Ukraine met with these two terms relatively recently. Our country is surviving not the best times, economy is a complete mess and, consequently, in order to save money companies are forced to gradually transit to alternative ways of doing business.
Three is no need in reinventing the wheel, since everything has already been invented and field-proven by many leading successful world corporations quite a while ago. Proven effectiveness of those two advanced methods and practical experience have shown that in a down economy many companies still adhering to the old principles won’t survive, unless they start using the successful achievements of global management. In order to understand rational of both types of relations and benefit from all advantages resulting from them, one should learn more about the economic concepts of “outsourcing” and “outstaffing”.
Outsourcing: concept and benefits
The term “outsourcing” used in management is translated from English as “use of external source”. What does it mean?
This means that companies using outsourcing in practice, transfer a number of functions of their separate units (for example, accounting department, legal department, HR, IT, transport services, etc.) to the competent external contractor. The latter, in turn, on the basis of a formal contract undertakes to fulfill all the obligations imposed on it, staying within the effective legislation of Ukraine. All responsibility for meeting deadlines and correct performance of functions rests with the company that has undertaken the obligations, that is, with the provider of outsourcing services.
What are the advantages and benefits of this method? Companies that have left a number of functions behind and reduced staff of entire departments, release additional funds for other, more meaningful purposes, due to the fact that there is no need to maintain often inflated personnel.
A number of cost items is reduced, there is no need to:
- pay salary to employees and charges on them to all extra-budgetary funds;
- maintain entire department (purchase office furniture, computers, office equipment, and consumables for them);
- buy expensive licensed software, including antivirus protection;
- pay bills for phones, internet, utilities, etc.
The funds released as described above can be reallocated to the development of production, which is especially effective in recession times.
Outstaffing: sum up
The term “outstaffing” is translated from English as “freelance”. It is understood as withdrawal of part of company’s employees under external management.
In this case, cooperation algorithm between the client and the provider (outstaffer) is as follows: part of personnel of the client company is phased out of the regular staff, legally they are registered in a specially created third-party company. Under the third-party management, phased out employees perform their functions related to the client activities. In fact, all employees are at their places (often even without moving out of their cozy offices), perform the same functions as before, but are actually under the jurisdiction and management of the provider. In this case, the outstaffer is responsible for management of the personnel entrusted to him, but responsibility for the work itself is assigned to his employees.
The main goal of transition to such relationship is company’s focus on minimizing its risks and reducing financial costs. The client, as if he rented his personnel to the outstaffer, waives direct responsibility for them, does not bear the costs of their maintenance, but at the same time he receives the deliverables that always satisfied him, at the acceptable cost. Knowing competence and professionalism of his employees (albeit former), manager does not worry for the quality of their work.
A choice between Outsourcing and Outstaffing
Both methods which are increasingly used today by many companies, regardless of their organizational and legal form and scope of activities, have their merits and minor differences. Both are conceived in order to save money for the client company, and both of them are doing this excellent. The choice of this or that system of relationship depends on the goals pursued by the client.
Judging by the practice, outsourcing is often chosen by the clients. Having transferred their functions to a third-party company, managers, as necessary, maintain contact with their employees. For them, the deliverables (same timely formed and submitted reports, properly drafted contracts with counterparts, etc.) are more important. For the scope of work assigned to the executives, done at quality and in time, managers are ready to pay the outsourcing company against the acceptance acts.
Companies that require permanent presence of former employees “on the spot” and that have a complex technology or production process, more often choose outstaffing as the most efficient way of labor relations.
Cost-efficient offer from the Financial Chain Corporation
We, the “Financial Chain Corporation”, that specializes in provision of professional services in the legal and financial consulting, are ready to offer our partners a beneficial cooperation within the framework of a formal contract, aimed at reducing their personnel costs.
With our support, it is really possible to transfer accounting to outsourcing or outstaffing, as well as functions of HR management, legal services etc.
Availability of professional practitioners in the staff, extensive experience of work with companies in various fields of activity allows us to grasp the nettle in supporting businesses of any scale and specialization, guaranteeing them an excellent result. Cooperating with us, you will be able to:
- optimize administrative costs;
- increase productivity and controllability of business processes;
- work without the risk of stopping;
- timely receive the necessary information for doing business and competent consultations of our professionals;
- identify bottlenecks in your company and timely remove them with the help of our experts;
- timely submit reports to all state authorities;
- be aware of all changes in the legislation, 100% legally insured against serious trouble, etc.
If you made a decision to cut costs, get away from routine and bureaucratic obstacles that hamper the normal doing business in the company, choose outsourcing or outstaffing services from the Financial Chain Corporation!
We accompany you on the way to inevitable success!