The history of outstaffing as an activity


Like most business innovations, outstaffing came to us from the USA. In the years 60-70, outstaffing service was provided by individual freelance entrepreneurs. But soon separate outstaffing companies began to appear, which the local government took as an attempt to deviate from taxes. But, in fact, this business is aimed at something completely different – cost and process optimization, therefore, in the 90s, outstaffing began to be defined as one of the types of services of recruiting agencies.

But there is another theory that this type of service came to us from Japan, where only a third of all employees work officially. The rest are outside the state, but they retain all the required benefits, insurance and payments.

Between 1998 and 2000, the American Small Business Administration increased the number of laws governing employment by 60%, with the main focus on protecting workers’ rights. All these actions have significantly complicated the work with staff for entrepreneurs, because the demand for outstaffing has grown by 25% and continues to grow every year. Thus, the owners of the companies remove the burden from the hr-department and close a lot of issues related to benefits and insurance, by the wrong hands.

Today, outstaffing companies operate in America that define their type of activity as a Professional Employer Organization. In total there are about 700 in 50 states. Total revenue is approximately $ 40 million.

In the post-CIS space, outstaffing is ordered to remove unskilled and seasonal personnel from the state. However, for the IT sector, this service is determined by a slightly different functionality, although it reserves the accepted standards in the legal field.

The Recruit Alliance company has extensive experience in removing staff from the state in Ukraine. If you have any questions regarding the process and its legality, we will be happy to advise you in a format convenient for you: at a personal meeting in Kiev, online or by phone.