HR Administration Outsourcing

HR administration is usually seen as a routine subprocess run by an HR department. It looks like any responsible employee can manage it! So, HR administration is often delegated to an employee working on a part-time basis. At first glance a good HR specialist hardly differs from a bad one — both prepare documents, collect employees’ signatures and file signed papers. In fact, errors in HR administration often cause unpleasant situations in case of official inspections carried out by Rostrud, Roskomnadzor, legal or migration authorities.

Hundreds of thousands of rubles in penalties, damage of reputation — this is the price for neglecting the process of HR administration.

There are different reasons for this

To effectively perform functions of HR administration companies usually have a lack of:

  • time and resources
  • dedicated experts in the area
  • deep understanding

Administration of HR documents is an extra task for HR specialists responsible for:

  • hiring and adaptation of employees
  • development of staff motivation system
  • payroll

Significant risks

a company is exposed if HR administration is done inappropriately
Financial and Tax Risks
  • Financial and Tax Risks
  • Legal risks
  • Reputational risks

Example 1

If an employer refuses to register a foreign employee who has not been registered at the place of their actual living, the company is breaking the law 109-FZ “About migration registration of foreign citizens and stateless persons in the Russian Federation”.
The amount of penalty: to an executive – up to 50 000 rub.; to a company – up to 500 000 rub.; to a sole proprietor – up to 500 000 rub.(p. 4 art. 18.9 Code of Administrative Offences RF).

Example 2

If an employment contract is drawn up inappropriately (for example, there are no details of voluntary medical insurance policy or documents allowing a foreign employee to work in the RF – a patent or a work permit), a company is breaking the Russian Labour Code (art. 327.2 p.2).
The amount of penalty: to an executive – up to 20 000 rub.; to a company – up to 100 000 rub.; to a sole proprietor – up to 10 000 rub. (art. 5.27 Code of Administrative Offences RF).

Example 3

If when hiring an employee, copies of personal documents are collected and stored without signing a consent to personal data processing, these actions are considered a breach of the law 152-FZ “About personal data”.
The amount of penalty: to an executive – up to 20 000 руб.; to a company – up to 75 000 rub.; to a sole proprietor – up to 75 000 rub. (art. 13.11, p.2 Code of Administrative Offences RF).

Example 4

If the type of payment is not defined in regulations on bonuses, but it is regularly paid to employees, payments cannot be considered as company’s expenses. Therefore, the company systematically commits over- or underpayments of profit tax.

Example 1

A foreigner has been hired under a fixed-term contract for the period of their work permit. In fact, it cannot be the basis for preferring a fix-term contract to an indefinite-term one. If a foreign citizen is dismissed after the contract has been finished, they will be reinstated in their job through the court. The company will have to cover all legal costs, average earnings for each day of forced absence, working days will be considered when calculating annual paid vacation, and moral damage will have to be compensated.

Example 2

The correctness of HR documents is crucially important in case of employee’s dismissal due to reduction of the staff. Particularly, if the staffing table is not maintained properly, a dismissed employee can appeal against their dismissal through the court. Having proved an employee had not been offered all possible vacancies, they will be reinstated in a job. The company will reimburse average earnings for all days of forced absence, vacation, and legal costs.

Example 3

An employer tries to foresee all possible risks, uses a typical employment contract, downloaded from the Internet (e.g., from Consultant-Plus / Garant law reference systems) and customizes some of the articles. The multi-page document looks impressive and serious! Although, if there is a labor dispute, an overly detailed employment contract can do more harm than good to companies in case of a trial. Only an experienced practicing lawyer can detect articles representing unnecessary details and define which of them can play in favor of an employee, and which ones are needed to protect an employer.

Example 1

If employees see that HR administration is done occasionally, not only the employer’s reputation suffers, but also the loyalty of employees goes down. Being aware of the facts when some documents are signed with delay, and some are not signed at all, an employee can initiate a conflict and even blackmail their employer.

Example 2

Until 2002 the Russian Labour Code allowed to have so-called «salary ranges» in the staffing tables. For example, salaries of sales managers could vary from X to XX. Now such practice is considered illegal. The staffing table should show a definite and similar amount of salary for all employees working in the same position. If there is a local regulation in old format stating ranges of salaries, and employees know the amount of salaries of each other, it can cause unnecessary gossips.

Example 3

Vacation of employees working in rotating shifts cannot overlap the period of their days off. If there is no a proper vacation schedule regulating the mentioned aspect in the company, or the working schedule is not followed, employees, who know their rights well, will be dissatisfied.

3 convincing reasons

to consider HR administration outsourcing
  • 1

    Lack of time and resources

    for preparing a big amount of HR documents. When in the company:

    • there are more than 100 employees (hiring / dismissals of employees, sick leaves, vacations, changes in personal data happen more often than once a week),
    • working conditions are frequently changed (for example, employees work in rotating shifts or their job involves a lot of travelling on business),
    • the company offers an expanded social package to its employees (seniority bonuses, allowances for harmful working conditions, etc.)
    • high level of staff turnover (a large percentage of low-skilled staff, employees for doing some temporary projects are hired as full-time workers, etc.)

    HR administration is delegated to a single HR-specialist and the rest of HR administration is performed by other specialists as some extra work.

  • 2

    Lack of knowledge and qualification

    for designing of non-standard HR documents tailored to company’s business. When there is a need to:

    • make amendments to employment contracts (non-standard responsibilities, terms and conditions, terminal benefits, transfer of related rights, etc.)
    • show special salary and incentive scheme for employees in local regulations (hourly rate, commission fees, allowances for working in northern regions, etc.)
    • employ foreign citizens («expensive» executives or «affordable» low-qualified specialists)
    • maintain staffing schedule which is different from the standard one (flexible, shiftwork, rotating shifts, overtime, etc.)

    Whereas an in-house lawyer is not specialized in labour legislation and an HR-specialist is not qualified enough.

  • 3

    The forthcoming dismissal of

    the current HR specialist or planned reduction of the staff. When some special support is required in terms of:

    • professional interaction with employees when taking unpopular decisions (reduction, switching from full-time to part-time work, liquidation of the company)
    • effective pre-trial outcome of labour disputes with employees
    • fruitful interaction with state authorities over employees’ complaints (Labour inspection, Roskomnadzor, prosecutor’s office, police, migration service, court, etc.).

    HR administration is a business-process with extended risk generally for a company and personally for its head. Consistency in HR administration and independence from the human factor equal to safety here.

Why are we better than your full-time HR specialist?

Why we are different from other outsourcing companies
Your HR documents comply with the current legislation, the company is ready to be subjected to inspection, legal trial in case of any labour conflict
The nature of the problem

The Labour Law of Russia is one of the most changeable ones and it traditionally defends the rights of an employee rather than an employer.

If HR administration is delegated to a specialist who is not enough qualified in the field of the Russian Labour Code and related regulative acts, they are not able to develop / actualize local regulative documents in accordance with the legislation (reflection of all kinds of bonuses and the algorithm of their calculation in the regulation; designing the document, establishing the rules of personal data proceeding, etc.)

The main problem

It is impossible to evaluate the situation with documents in the short term, consequently, the company is not ready for inspections of Rostrud and other state bodies, or legal disputes initiated by employees.

Why we are different

We apply a risk-oriented approach:

  • analyse potentially tricky areas and situations for a company
  • forecast different scenarios and calculate possible material losses
  • determine necessary changes in HR policy and build HR processes in a way to reduce all possible risks – reputational, financial and legal

Our internal experts monitor and analyse legislative changes and inform employees on a regular basis. The knowledge and expertise of HR specialists is constantly checked. Our staff experts and lawyers, who have wide experience in labour law, are always ready to consult members of our team on any professional questions or extraordinary situations.

We have diverse expertise and experience in the area and know how to act in disputes to protect our Client.

You can free up your time and human resources in favour of your main activity
The nature of the problem

HR administration is a routine and time-consuming process as paperwork cannot be postponed for later.

We are sure that you are familiar with situations when documents are:

  • lost
  • not signed by employees (e.g., An order “On employment” / “On giving the employee a vacation”)
  • not provided by employees (e.g., diplomas / certificates confirming education / qualifications / military identity cards, etc.)
  • filled in incorrectly (e.g., medical certificates / (fake) employees’ employment record books / expired passports)
  • not signed by an employee who has already resigned
The main problem

A single HR specialist is not able to ensure the continuity of HR administration, effectively prioritise tasks, control their own activity, and combine dealing with paperwork and communicating with employees.

Why we are different

A team working for each Client includes the following professionals:

  • a lawyer specializing in labour and employment law
  • an expert on migration
  • an HR specialist
  • an HR auditor

HR administration is not an additional but the main professional function, they always have time for quality control, analyzing and checking documents and information.

It is enough just to inform us on an HR event (hiring / dismissal / business trip, etc.), and we will provide you with a full package of all necessary documents (orders, regulations, contracts, etc.).

When altering local regulations, we take a proactive position and suggest amendments to documents or design those of them which have been missing in the company.

Now you can entrust HR administration to us
The nature of the problem

Under the law (tax / administrative / criminal), ultimate responsibility for the violation of the labour-related laws, calculation of employees’ salaries based on HR documents, and payments of payroll-related taxes is imposed on the general director of the company.

Unfortunately, due to a lack of time and special legal knowledge the head of the company cannot always objectively evaluate correctness of HR documents signed every day. Correctness of HR administration is fully delegated to an in-house HR specialist.

The main problem

If an HR specialist makes a mistake leading to financial or reputational losses (penalties, inspections initiated by employees’ complaints), it is impossible to obtain compensation from this HR specialist.

Why we are different

The contract on HR administration services with our company ensures compensation of all penalties mentioned in the Labour Code and in the Code of Administrative Offences, in case they have occurred through our fault.

Being a legal entity, we are liable to you in accordance with the Russian Civil Code, whereas your in-house HR specialist holds responsibility under the Labour Code. Besides, we have resources and opportunities to prevent or correct the situation.

HR Administration Outsourcing

Current HR Administration
  • Current HR Administration
  • Local regulations
  • Labour disputes / Questionable situations
  • Migration and military registration

You do:

Inform us on HR-events: hiring / dismissals of employees, business trips, vacation leaves, etc.

We do:

  • Provide necessary expert support – advise on dos and don’ts of an employer, what documents are needed, and which are not in compliance with labour-related legislation
  • Prepare a complete package of necessary documents
  • Control if employees sign the documents on time

You do:

Inform us on changes in the company which have already occurred or are being planned: establishment of new positions, reduction of the staff, salary modifications, etc.

We do:

  • Design local regulations which have been missing
  • Update existing local regulations in accordance with changes in legislation
  • Correct existing local regulations in compliance with HR policy transformation

You do:

Inform us on current situation and make a request

We do:

  • Our experts (lawyers specializing in labour law, HR specialists, payroll accountants) offer verbal consultations. We foresee how a labour dispute or a questionable situation are going to be developed, evaluate possible consequences (calculate risks, penalties, compensation) and suggest a variety of solutions to the employer.
  • Prepare written responses to state authorities in case of inspections
  • Prepare necessary documents to minimize / exclude any risks for the employer
  • Represent the employer’s interests at government bodies (Rostrud, prosecutor’s office, court, etc.)

You do:

Inform us if you have full-time workers liable to military service or foreign employees in the company

We do:

  • HR administration in compliance with legislation
  • Prepare a package of documents needed for reporting
  • Submit information to the Migration services, the Military registration office

HR administration outsourcing will solve problems you face. In the transition period our methodologists develop a suitable service delivery model tailored to all needs of the Client, even if…

You want to reduce costs on payroll and related taxes / salary to a full-time HR specialist or eliminate this position

Within HR outsourcing service you will be provided with an HR-implant. We will control and monitor their performance, professional skills and replace the specialist with another one if needed in case of their illness or vacation leave.

You want to get rid of storing HR archives

We will be archiving and storing HR documents for you in accordance with legislation. HR Administration outsourcing allows even undergoing official on-site inspections on the territory of an outsourcer.

HR Administration in the previous periods was carried out properly / was not carried out at all

We will offer a free express-audit, evaluate risks and restore HR administration for previous periods

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Your benefits from delegating HR Administration
to our company

  • 1

    High professional standard of HR Administration

    Dedicated experts have more in-depth knowledge on the matter of concern. You get real professionals responsible for quality and result. Depending on specific nature of HR administration in your company, we will choose specialists you need: an assistant, an HR specialist, an HR manager, a lawyer specializing in labour and employment law.

  • 2

    Mitigation of human factor risk

    All nuances of your HR policy and regulations on delivering services to a certain company are stored in CRM. This helps us to continue serving our Client on previously agreed terms even in case of replacing one specialist with another one. (We guarantee the replacement of experts to be smooth and seamless for the Client).

    Uniform standards of HR Administration service, high level of professionalism, the availability of personnel let us relocate human resources or recruit additional staff if needed in case of complicated and urgent tasks required by the Client.

  • 3

    Optimization of internal processes

    Having delegated routine and time-consuming processes to our company, your employees can focus on your company’s core activities.

    For our part we offer a high-quality service of HR administration — considerable expertise in the area allows us to promote best practices which have proved to be effective when serving other Clients. Professional automation level gives the opportunity to support scalability of processes as well as to minimize manual operations when performing typical tasks.

  • 4

    We are financially liable for the quality of our service

    Jointly with AlfaStrakhovanie Insurance Company, we have developed an exclusive professional liability insurance contract. This includes an extended range of risks not covered by standard policies and not insured by most other accounting companies. This gives our Clients the guarantee that, even in cases of serious financial loss, we will be able to compensate them in full.

  • 5

    You are our Client with a capital «C»

    Your questions and requests are welcomed, your tasks are performed timely. You are given all possible opportunities for monitoring our performance.

    In accordance with our service agreement we are liable as a legal entity under the Russian Civil Code.