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Staff Leasing, Managed Services, EOR: Which one is right for you?

BUSINESS TIPS  |  December 16, 2022

From startups to Fortune500 companies, the most essential element to any business is people. But recruiting the right people is easier said than done. It requires a significant investment of time, effort, and other resources which not many startups and small companies can sustainably maintain. 

When you’re at a critical juncture in your growth as a business, outsourcing can provide quick and effective staffing solutions to help you power through the next phase of growth. 

We’ll take a look at three ways that you can outsource work and help you decide which one is right for you. 

  • Staff leasing: A cost-efficient solution for day-to-day operations

Staff leasing allows businesses to outsource talent from a dedicated staffing provider, which handles all HR-related work (from direct hiring and payroll processing to issuing disciplinary actions).  Since employees are directly hired by the staffing provider, the client company has no employer-employee relationship with the workers they engage with. 

The client company can focus on filling job vacancies without having to worry too much about formal HR functions and employee relations. This can also translate to reduced operational costs since workers will be directly paid by the staffing provider based on prevailing wage rates in the country they’re working in.

Staff leasing may not suit companies that prefer instilling long-term commitment in its workers. Further, since recruitment falls solely on the staffing provider, it can be challenging to ensure that each recruit is up to par with a client company’s hiring standards.

  • Managed services: For businesses requiring specialized solutions

Instead of building a human resources department or IT team from the ground up, companies can retain a managed service provider (MSP). Often referred to as an end-to-end solution, MSPs have full control over all the processes under a specific business function. 

Working with an MSP allows businesses to access a wealth of tools and knowledge. They can also learn industry best practices without having in-house experts. 

Cost is the main factor to consider when working with MSPs, especially when you’re considering the most in-demand providers. Specialized knowledge in areas like supply chain management, logistics, human resources, and IT infrastructure usually come at a premium price. 

  • EOR: Offload regulatory and legal compliance 

Some companies want full control in identifying and developing staff, but don’t want to establish an official legal entity in a local area. This is where EOR (employer or record) services can come in useful.

As the official employer on paper, the outsourcing provider is in charge of all HR administrative tasks and compliance with local labor and tax laws. Meanwhile, the client company takes charge of identifying talent, honing employee skills, and providing incentives for better performance. 

In some countries and jurisdictions, EOR doesn’t always grant you full sway in recruiting staff. If there are plans to establish a formal presence in a new market or country, companies may be better off investing in direct recruitment and HR management functions. 

Find the best staffing solution with Dojo

If you’re in need of top-tier talent in web design, software development, and managing digital projects, get in touch with Dojo. Our team specializes in providing next-level outsourcing services to a variety of businesses. Reach out to us at [email protected] to learn more about how we can work together.