SummaryPersonnel leasing in Russia: past, present, future

Personnel leasing

From a legal point of view, the term personnel leasing is not entirely correct and in Russia it is most often used in a professional environment by employees of recruitment agencies and their clients, who call personnel leasing leasing.

By and large, personnel leasing is a legal relationship that arises when an employment contract is concluded between a recruitment agency and an employee with the subsequent assignment of this person to work in another organization for a relatively long period of time, usually from one or two months to several years, we recommend a recruitment agency https://many-work.ru .

Experience, history of appearance and problems of use in Russia

Foreign experience shows that recruiting firms have long gone beyond recruiting qualified specialists to provide them under leasing agreements. In addition, they have learned to cultivate their own leasing potential by selecting candidates from talented youth.

Investments in them over time make it possible to have highly professional specialists on the leasing staff, who are always in demand among tenant companies.

In Russia, this type of service is developing at a slower pace for several reasons:

• imperfection of legislation;
• lack of transparency in the activities of recruitment agencies;
• there is no constant demand from companies for the temporary rental of highly qualified specialists.

The main problem in the development of this area in the Russian labor market is the lack of laws in labor law regulating legal relations in practice between recruitment agencies, employers and workers.

However, despite these difficulties, personnel leasing in the future may become one of the options for optimizing the use of freelance employees in the production of various Russian companies.

The first step on this path has already been completed: starting from 2021, the Labor Code of the Russian Federation included the concept of agency labor, which previously did not exist in any of the regulations. What labor legislation will be approved next, only time will tell.

Advantages and disadvantages

In legal relations in the presence of a personnel leasing agreement, there are advantages and disadvantages for each of the three parties involved in the implementation of its obligations.

Why not two? Because, despite the fact that the text of the agreement includes only two legal entities signing it, in fact it applies to the employee himself, the employing company and the recruitment agency.

What are the pros and cons for each of the parties during personnel leasing in labor relations?

For employees

The benefits for the employee are as follows:

• flexible work schedule;
• there is a real opportunity to work in large industries with an entry in the work book;
• length of service is not interrupted when changing jobs at different enterprises;
• stable salary is not lower than that of the main personnel working in the employing organization in similar positions.

The disadvantages are that you can only work for a limited time or you need to constantly move from one company to another, again delving into a new field of activity. But at the same time, he learns new skills and gains invaluable experience.

For employers

Typically, the need to sign a staff leasing agreement with the main employer arises when it needs to use additional employees without expanding the existing staff.

Sometimes you need to save on the costs of maintaining workers.

By concluding a personnel leasing agreement, the customer receives the following benefits:

• there is a reduction in the list of full-time employees, without losing qualified specialists without losing qualified personnel;
• projects are brought to life thanks to the labor of temporary workers without concluding employment contracts with them;
• expenditures for social benefits, insurance contributions and taxation are reduced;
• there are no disputes in labor relations with freelance specialists;
• painlessly expands or contracts the number of persons required to solve production problems;
• replacing the main employee while he is on vacation or sick leave;
• The work of the accounting and personnel departments is relieved.

The disadvantages in this situation are:

• hiring a freelance employee who perfectly performs their job duties for a period of no more than 9 months;
• calculating the salary of a temporary employee in the same amount as is indicated in the salary of full-time workers in similar positions.

Recruitment agencies make their income from leasing full-time employees. At the same time, they take upon themselves the decision on personnel and accounting issues.

In addition, all social benefits, legal proceedings, consideration of emergency situations and injuries that occurred during work should be carried out by recruiting firms.

Find out how to restore a work book if lost from our article. Who is entitled to an annual salary increase? See here.

Read about documenting salary deductions here.

What personnel can be leased?

Abroad, supporters of working for companies through the use of leasing are people who cannot work in one position for a long time.

The main characteristic feature of such employees is leading a free lifestyle.

Inexperienced students can gradually become highly qualified specialists thanks to this type of employment. In addition, continuous work experience is accumulated and decent wages are provided.

This type of service is in great demand in Western countries, both among specialists of various professions and among employers.

In the Russian Federation, the following personnel are most often used in this area:

• technical personnel;
• blue-collar workers;
• employees in the office administration;
• professionals to expand the staff of sales departments.

However, the rental of temporary specialists is not large-scale, because their wages in Russia are lower than those of the main full-time employees.

Examples

In Russia, cunning schemes for using personnel leasing are often revealed during audits of enterprises by tax agents. There are organizations that really try to save on the costs that make up the wage fund by periodically attracting specialists.

However, tax services are faced with another type of staff loan, based on savings on budget fees. Moreover, such contractual relations during the use of leasing services cover violations of the approved tax rules committed by the employer.

One example of such circumstances was the discovery of the fact of the simultaneous dismissal of the entire workforce from a furniture factory.

Thus, accountants, carpenters, cabinetmakers, cleaners, and tinsmiths left the organization's staff. But after 3 days, all the dismissed workers were hired by the organization of the disabled people’s society, which sent them to perform work duties back to the plant in their previous places under a personnel lease agreement.

Thus, furniture production resumed, despite a significant decrease in the number of workers.

Read on our website how civil servants' salaries are calculated. How is the regional wage coefficient calculated? The answer is here.

Scheme for provision of personnel on leasing terms

To begin work in the direction of leasing temporary personnel, a recruitment agency searches for the necessary specialists, introduces them to all the intricacies of the upcoming labor relationship and accepts them into its staff on special conditions.

Further, the scheme for providing workers on leasing terms consists of several main stages:

1. Identification of problematic aspects in the personnel issue of the customer of the personnel leasing service and determination of the most optimal way to solve them, that is, which specialists, in what quantity and under what conditions will be provided by the agency.
2. Approval of a personnel leasing agreement: employee salary; the amount of commission payments to the agency, usually amounting to 10-20% of the employee’s salary; timing and volume of work performed, criteria for their quality, and so on.
3. Selection of specialists to perform the work specified in the contract.
4. Preparation of all necessary documentation for the entry into force of a tripartite leasing relationship between the recruitment agency, the customer of the service and the employees provided.
5. Control of the quality, volume and compliance of the work specified in the contract by the recruitment agency.

Financial side of the issue

The cost of personnel leasing services for the customer is an important point when signing the contract.

There cannot be a single figure in this case, because it is influenced by quite a lot of factors. What does the customer need to know about setting the price for renting a specialist in order for signing the contract to be beneficial?

Cost of services in 2021

There are few recruiting firms in Russia that name the price for renting out their existing specialists.

This is due to the fact that there is little demand for personnel leasing in the labor market. Therefore, it is quite difficult for them to accurately predict the cost of their professional.

Usually, when agreeing on the terms of a contract, clauses are stipulated that indicate the specific requirements of the customer for the contractor. In accordance with them, the price for renting a specialist is determined, agreed upon by the parties when signing the agreement.

As an example, the table shows the average cost of providing personnel leasing services in the Moscow region:

The average hourly cost of working personnel in Moscow averages 130-150 rubles/hour, in other regions, for example, in Tula from 90 rubles/hour.

When a customer contacts a recruitment agency for the purpose of renting working personnel, the cost and conditions for their provision are always discussed before concluding a contract.

Factors influencing price

There are several main factors influencing the rental price of employees from private recruitment agencies:

• the amount of working time that a specialist must work in the customer’s company;
• the expected volume of work and the number of workers to complete it;
• professionalism and qualifications of a specialist;
• seasonality of work;
• type of production duties;
• remoteness of the customer's enterprise.

There is a lot of information about staff adaptation methods in our article. Is outstaffing of foreign workers allowed? Find out here.

How to calculate additional salary? Read here.

Features of labor leasing

Leasing, including for employees, has some features, among which are the following:

• Leasing relations in the field of labor supply are regulated by the law on agency labor.
• Leasing of working personnel is resorted to mainly in cases where the services of certain workers are needed periodically, not on an ongoing basis.
• The duration of a personnel leasing agreement is relatively long.
• Legal relations within the framework of employee leasing are formed through several independent agreements: a personnel supply agreement, an agreement on the search and selection of personnel and employment contracts.
• In fact, personnel leasing is a type of personnel outsourcing agreement.

Advantages and disadvantages of personnel leasing

Advantages of personnel leasing

Personnel leasing has many advantages, such as:

• Significant reduction in costs for maintaining personnel and accounting records, generating various reports, especially when it comes to foreign workers.
• Quickly attract the necessary personnel in a short time.
• The right to replace employees an unlimited number of times.
• Opportunity to hire highly qualified employees.
• Helps to avoid losses and downtime in the event of employees being absent from their workplaces for any reason.
• If necessary, it reduces the costs of attracting highly qualified, highly specialized and other specialists.

Disadvantages of leasing workers

Also, staff leasing has some disadvantages:

• There are options when an employee provided under a leasing agreement will cost the customer a little more than a full-time employee, since recruitment agencies charge a commission of 10-20% of the employee’s salary.
• VAT is usually charged on the entire commission amount.
• The customer of the service may face disloyalty of the staff provided.

Certain advantages and disadvantages of personnel leasing depend on the scope of activity of the customer of the service, the leasing scheme used in a particular case and other factors.

Concept, essence and reasons for use

The crisis existing in the Russian economy has forced employers to resort to cost minimization in all areas of production. This also affected the use of labor.

By reducing production costs, companies are trying to cut costs by reducing the cost of social benefits and taxation when paying contributions to casual workers. Reducing working and administrative personnel and renting them from another organization can significantly reduce the wage fund.

However, under such conditions, in order to maintain production volume at a profitable level, it is impossible to do without employing labor and managers. Therefore, they are borrowed by adopting labor rental methods from foreign countries.

Thus, in Russia, contractual relations gradually developed between the main industries and companies that rent out their workers for some time.

The main directions for the use of agency labor include 3 concepts:

• personnel leasing;
• outstaffing;
• outsourcing.

Contractual relations of leasing of workers can be based on the following main purposes of its use:

• Searching for temporary employees for the main employer. This option is used when a manufacturer needs temporary performers of labor duties for a period from several hours to 2-3 months. For example, you urgently need to replace a sick accountant or hire service personnel for promotions and exhibitions.
• Renting employees from another company for the purpose of transferring to them the management of external contractors, or performing other functions. For example, research in the field of marketing, filing financial statements, cleaning premises, maintaining computer networks, etc.

Agency labor services are increasingly provided in the Russian Federation. They have some similar and distinctive features depending on how the activities of other people's workers are used.

How legal is it in the Russian Federation to conclude an agreement providing for the leasing of freelance personnel?