27.01.2023

HR Provider 101: Understanding the Details

This article is aimed at dispelling myths about recruitment agencies, employment agencies, HR providers, and revealing the key principles of such organizations.

But for starters, let’s clarify the terms. The first important term to understand is an employment agency.

Employment agency is an intermediary on the labor market, an organization providing services to job hunters. The employment agency can provide the following services:

CV writing
translation of CV into a foreign language
posting CV in mass media and online
sending out CVs to companies
psychological testing of applicants
trainings
consultations on job search methods and techniques
consultations on job interview issues
consultations on career issues
career guidance
informing about job openings on the labor market.

All of these services are chargeable and shall be paid for by the person seeking the job (an applicant or a candidate).

Indeed, this operating model is not quite profitable: just think how much one person can pay for employment assistance. How often do they do it? Therefore, a lot of agencies use a hybrid scheme, combining the employment agency and recruitment agency services.

Now let’s talk about the second term – Recruitment agency

Recruitment agency VS HR-provider. Smart Solutions

Recruitment agency is also an intermediary on the labor market, but this organization, unlike the employment agency, provides services to employers.

Employers mean a business, an organization, an enterprise, or any company requiring staff. It is the employer that pays the agency for seeking appropriate staff according to its requirements and preferences.

The recruitment agency generally has a broad database of candidates and offers them a job when the employer has an open position. And the agency does not take money from the candidate. But there are those who do… Those who try to have their cake and eat it too. However, recruitment agencies typically earn by helping businesses find employees who will perfectly meet their needs.

The main service of the recruitment agency is obvious – recruitment, but some companies expand the list of services by the following: outplacement, outsourcing, outstaffing, staff leasing, etc.

Let’s figure out what it means.

Consulting is quite clear, the agency provides consultations on HR issues, it frequently includes a staff motivation system, onboarding, grading, etc.

Outplacement is an employee firing procedure. The one who helps to find and hire an employee can also assist in terminating the employment relationship with them in a way that both parties will be satisfied with the outcome.

Outsourcing is a process of delegating certain tasks to the contractor (generally non-essential ones). The main advantage of this option is saving money – tasks are performed by staff that is not hired, recruited, trained or registered by the company acquiring services.

Outstaffing (frequently confused with outsourcing) is the engagement of freelancers or removal of employees from the customer’s staff and registering them as employees of the provider company.

Staff leasing term is considered incorrect from the legislative perspective but it shows the essence. Staff leasing means that employees of one company, such as an HR provider are involved into a project of another bussiness.

Staff onboarding is a process of formal and informal procedures of accepting a new employee into the company staff, which begins with the signing of the offer and can last up to 1 year, depending on the corporate culture.

Grading is the grouping of positions by importance at an organization to define the salary scale. The goal of grading is to establish a transparent, objective and efficient system of labor remuneration as well as to evaluate the compliance of employees with their positions.

However, generally all of these options are offered by HR providers specializing in such range of services.

HR provider is a company offering HR services, allowing businesses to improve or adjust such processes as recruitment, management, development, accounting and dismissal of personnel. Moreover, outstaffing and outsourcing activities are their direct specialization. In general, the HR provider can be in charge of everything related to the company’s staff.

In other words, HR provider is an organization that can relieve any staff troubles, allowing businesses to focus on their core activities.

Reasons to choose an HR provider

Advantages of HR-provider. 3 reasons to choose HR-provider

Advantage #1. Focus of attention. All Human Resources services are provided by one company. There is no need to control, check and manage dozens of different internal services, departments or individual employees, as this responsibility is covered by the HR provider.

Advantage #2. HR provider’s expertise becomes available. The experience of professionals working with companies in different areas, markets, industries becomes available to businesses, which helps to prevent the majority of related problems.

Advantage #3. Reduced monthly expenses. Businesses save key resources such as money and time. HR provider’s services are cheaper than having an in-house full-time specialist in the particular field. Besides, it saves tons of time, which is converted into money for the company.

Advantages for business are obvious. Referring to HR provider is the best possible solution for enterprises aiming to get rid of any HR-related issues.

Smart Solutions has become one of the leading HR providers in Ukraine long time ago. Moreover, it has entered the international level and already offers its services in the European countries – Poland, the Czech Republic, and Central Asia – Kazakhstan and Uzbekistan. Businesses order the following services as a package or separately: