Project reference · Outstaffing & employer of record

Sales people in Ukraine, before there was a company.

An international jewellery and accessories manufacturer wanted its own sales people in Ukraine without opening a company there. For four years we were their employer: payroll, contracts, cars, travel and expenses for its account managers and for a business developer of a second business unit, the import of its sample materials, and a way to keep their pay whole when the hryvnia collapsed.

4 years on our payroll, from the first hire to the planned close

Duration

4 + 2 employees, plus two temporary sales staff we recruited

People

2 business units under one contract

Scope

0 company the client had to open in Ukraine

Structure

The people

Two business units, one contract

Each bar is one person we employed for the client, or the import channel we ran for it. Two business units, one contract and one invoice flow throughout.

2012 2013 2014 2015 2016 WHO WE EMPLOYED FOR THE CLIENT Account manager Account manager Business developer, second unit Account manager Temporary sales staff (2) Sample imports new outstaffing law currency crisis service ends
Each bar is one person we employed for the client, or the import channel we ran for it. Two business units, one contract and one invoice flow throughout.

The brief

What the client actually needed

The client sold through distributors and wanted its own account managers in the market, close to customers. A representative office or a subsidiary meant months of registration and a tax presence it did not want. It asked us to employ its people, under its management, and to bill the full cost back each month.

We hired whoever the client chose, wrote the contracts, ran payroll and social contributions, leased the cars, paid the phones, the fuel and the business trips, and had every cost approved by the client's line managers before it was incurred.

Compliance

The law changed in the first year

A new employment law in 2012 made outstaffing a licensed activity and ruled out branch offices as employers. We moved the employees to a group company that could hold the licence and re-papered the client before the deadline, without a day's break in pay.

The hard parts

Where it gets difficult

An employer without a company

The client wanted people on the ground and no tax presence. Every contract, car and phone sat with us, while the client kept control through approvals, timesheets and its own line managers abroad.

Two units, two line managers

A second business unit used the same contract for its own business developer, with a line manager in another country and its own budget. One invoice flow had to serve both.

Pay in a falling currency

In 2014 the hryvnia lost much of its value in months. We designed a lawful temporary adjustment pegged to a dollar reference rate, then reviewed it with the client every month.

Samples are imports too

Catalogues, colour charts and samples needed an importer of record and customs values that matched the paperwork. When a supplier invoice was wrong by a factor of a hundred, we fixed it with customs and the bank.

Billing twice a month

A prepayment invoice on budget, a closing invoice on actuals, an act of services and signed timesheets for every person, every month, in two languages.

Exits done properly

Four very different exits, from a probation that did not work out to a business unit leaving the market. Each one needed the right legal route, the leases closed and the client's property returned.

What we did

Set up, adapt, protect, close

  • 2011–12 — Set up. Proposal and contract within six weeks of the first enquiry, first payroll in January, an import channel for sample materials by the autumn.
  • 2012–13 — Adapt. New contracts under the new outstaffing law, a second business unit added, temporary sales staff recruited for the season, and a third account manager taken on and released.
  • 2014–15 — Protect. Salary adjustment and hedging through the currency crisis, cost-approval and travel procedures, and a cheaper import route through our own company.
  • 2015–16 — Close. One unit left the market, the other ended the service as planned; cars and equipment returned, the last import cleared and the paperwork signed off.

Outstaffing is easy to describe and hard to do well for years. The work is in the details nobody sees: the approvals, the exits and the month the currency halves.

In the client’s words

“Your suggestions have been evaluated internally and approved.”

The client’s regional finance manager, on our proposal to protect staff pay through the 2014 devaluation.

How we work

We do not show you another company’s name

The client, its owners and its people are not named here, and they will not be named in a meeting either. We are glad to talk this project through in detail. What we will not do is discuss the last client that way with you, or you with the next one.

Next step

Need people in Ukraine before you have a company there?

Tell us who you want to hire and how you manage them. We will tell you honestly what an employer-of-record set-up costs, what it covers and where its limits are.