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Staffing and body leasing services (the two terms are interchangeable) are provided by third party agencies who ‘staff’, or fill, their partners’ vacancies with qualified professionals. These professionals are contracted to the provider but work on behalf of end client for an hourly, daily or monthly fee paid to the agency. The fee charged by the staffing agency represents the salary and associated expenses, plus a margin.
Organisations usually use staffing/body leasing agencies for roles and projects that require more flexibility than making fulltime hires on permanent employment contracts allows for.
Staffing companies often specialise in a particular sector eg. IT, or hospitality. Those that focus on filling short term vacancies are also sometimes referred to as temp agencies. Outstaffing is another term used for the service it can be argued more clearly indicates the involvement of a third-party service provider.
*Please note the term staffing can also refer to a form of workplace bullying where, as a group or ‘mob’, employees unfairly target or persecute someone in a more senior role to their own. That is not the meaning of the word addressed here.
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Staffing vs recruitment – what’s the difference?
A staffing/body leasing service differs from a pure recruitment service in that the individuals are contracted to and paid by the third party provider and not the end-client who assigns the tasks. Recruiters source and present candidates suitable for roles their end client wishes to hire a permanent employee for. However, their role ends when a candidate is either hired or declined by their client.
The business model of the two services is also different:
Recruiters – receive a fixed fee (split into instalments paid when a candidate has signed an employment contract and after an agreed time in the position, often the probation period) that usually equals 1-3 monthly salaries.
Staffing companies, meanwhile, are paid an agreed hourly, daily or monthly rate by the end client. Day-to-day, professionals provided by a staffing agency work on tasks and projects assigned by the end client in much the same way as an in-house employee would. However, their employment or freelance contract is with the staffing agency, which is responsible for paying them. The staffing provider invoices the end client.
Staffing vs outsourcing – what’s the difference?
A staffing service is also distinct to an outsourcing service. Outsourcing partners provide a managed service rather than just the professionals that the end client is then responsible for managing, as is the case in staffing relationships – hence the term ‘body leasing’.
Outsourcing can involve fuller or more stripped-back management and HR functions than staffing based on the needs of the end client and provider’s business model. However, there is usually a degree of management involved and the outsourcing partner has a level of responsibility in ensuring the quality of the output of the professionals provided. In staffing, the provider’s level of responsibility is usually confined to recruitment, payroll, and other limited HR functions.
When and why do organisations take the strategic decision to use staffing?
Staffing services can and are used to fill almost every professional role imaginable. However, some roles and circumstances are particularly suited to a staffing solution. Among the most common roles staffing agencies are relied upon to fill include:
- Software development and IT infrastructure
- Security and stewarding
- Hospitality and events
- Cleaning and maintenance
- Secretaries and PAs
- Construction
- Agriculture
Staffing agencies are most relied upon to fill roles that are temporary in nature. At the extreme that would mean positions that only need to be filled for several hours to a few days, such as staffing events like concerts, festivals, sports events, conferences and cocktail parties.
Staffing is also a popular solution to filling seasonal roles such as in the tourist industry and agriculture. Or to cover permanent employees expected to return to their roles such as after maternity leave, illness or injury.
Roles that are reliant on project cycles such as in construction and software development are also a natural fit for staffing solutions. Lots of hands are needed during the building phase of a digital or physical project and then they aren’t when it’s finished. Or far fewer for maintenance or further development while the product is already operational.
In summary, taking advantage of third-party staffing services makes sense for organisations in need of extra hands or professional expertise but who don’t need or want to commit to hiring fulltime employees, or lack the in-house resources and expertise to make temporary hires directly.
Staffing is a good fit when:
- You have temporary roles to fill.
- You have roles to fill but would prefer to retain strategic flexibility and not commit to a permanent employment contract.
- Accounting convenience – it can be preferable to account for certain human resources as a variable service expense rather than have them on the books as employee contracts.
- You lack necessary recruitment resources in-house.
- You’d prefer to absorb staffing expenses as a margin paid on regular invoices issued by an outstaffing partner than pay larger one-off fees to recruiters.
- You want full management control of staffed positions and don’t require additional delivery or project management – just the qualified human resources.
- You want to minimise payroll admin or recruit internationally from territories where you lack payroll capacity.
Staffing may not be optimal for you when:
- Functions to be executed by the roles that need to be filled are long term and strategically core to your organisation.
- You are outsourcing an entire business process which also requires management. An outsourcing model may be a better fit.
- There are regulatory or security reasons why functions and processes are sensitive and should be executed by direct employees.
Staffing/Body Leasing is a growing sector
The three trends of flexibility as a strategic priority, project-based recruitment and remote, internationally distributed teams, especially for IT roles, have all supported the strong growth of the staffing sector globally. The Covid-19 pandemic has had a clear impact on those trends, as evidenced by a 20.5% growth rate in global revenue between 2019 and 2021, discounting lockdown-ravaged 2020.
Global staffing industry revenue from 2008 to 2020 with a projection for 2021 and 2022(in billion U.S. dollars)
Source: Statista
Estimated year-on-year sector revenue growth between 2021 and 2022 has continued to show strong momentum with a 9% increase from $599 billion to $653 billion. The increasing popularity of staffing solutions for well-paid software development and other IT specialist roles is another factor influencing the staffing industry’s global value growth.
K&C – nearshore IT staffing agency
At K&C we offer a range of IT outsourcing cooperation models that range from stripped back staffing and body leasing and team augmentation to full delivery management of enterprise-level software development projects.
If you require a staffing solution, or a fuller service model, to help you manage your IT project cycles flexibly and efficiently, please do get in touch. You can reference our case studies or ask us directly for references from enterprise-level partners including Nestle and Bosch to some of Europe’s most exciting start-ups.
We’re looking forward to supporting your current and upcoming software development staffing needs with fantastic nearshore tech talent!
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