How to Save Money on Staff Augmentation?

Employee costs are one of the most costly parts of a company's budget. In addition to simple and obvious costs, such as taxes and mandatory payments to various funds, there are many indirect and hidden charges. As well as expenses associated with inevitable losses.

To let this huge financial flow take its course is to sign a death warrant for business. The first thing to do is analyze and budget the entire payout. And then you can begin to optimize and reduce costs. How to do it competently, without breaking the laws, read in our material. So staff augmentation is always in the center of attention.

How to Save Money on Staff Augmentation?

In an increasingly competitive marketplace, entrepreneurs have to look for effective methods to reduce company costs. By cutting costs, the company will be able to lower product prices. This will increase sales and expand its customer base.

There are many ways to reduce the costs of an organization. The relevance of most of them depends on the specifics of the company's work and product features. Outstaffing services can be distinguished among the universal and most effective methods.

Outstaffing is an effective tool for optimizing organizational costs and increasing revenues. This is achieved by re-registering employees in a specialized agency.

Reduce costs with outstaffing

The process takes place in several stages:

  • personnel are expelled from the state by dismissal;
  • employees are registered with an outstaffing agency;
  • the personnel is transferred to the disposal of the former employer.

Outstaffing services are designed to change the formal format of the relationship between the company and employees. But they preserve the actual one. 

Why outstaffing is beneficial

Freelance HR management provides access to several reserves of reducing gross expenses and increasing revenues. The service brings benefits to the company in several ways:

The permanent staff of the organization is being reduced

Since employees are registered in a specialized outstaffing agency, their official number at the enterprise is decreasing. There are special it staff augmentation services, which are aimed at solving tasks of any level of difficulty.

The taxpayer category is retained

The status of a "small", "medium", "large" enterprise depends on the size of its staff. The official dismissal of employees allows the use of an optimal tax deduction system.

HR administration is simplified

The responsibilities for the maintenance and registration of personnel are assigned to the contractor. So the company's own HR and accounting departments get rid of unnecessary workload.

The costs of the company are reduced

Dismissal of staff contributes to a decrease in the wage bill. As a result, the base for tax and social deductions is also reduced.

Fixed costs are optimized

Calculating salaries and other deductions for each employee is a troublesome task. Instead, the entrepreneur periodically pays the contractor for the services rendered, which is determined by the signed outstaffing agreement.

The legal registration of personnel is periodically checked by authorized civil services. If violations are identified, fines are issued to the official employer who maintains employees.

There are many advantages to outstaffing. That is why the service is increasingly used by enterprises in various spheres of business. These advantages allow you to significantly save your corporate budget.

The desire of business owners to reduce employee costs is understandable, but it should be borne in mind that not all optimization methods meet the requirements of labor legislation. Often, attempts to save money turn out to be serious fines for the employer.