The service we call Staff Outsourcing

What does my company do?

So, my company only does two things, one of them is in our name…recruitment. That’s the obvious part, apart from a few people who annoyingly use the term ‘head-hunting’ (which is a specific kind of retained search) everyone uses the same word for recruitment and it is widely understood.

Something that we have dealt with regularly since we set up the service is that the other thing we do has many names and is often mis-named. This other service basically does all the employment contracts and the admin, taxation and payrolling for companies which either can’t or choose not to do it themselves. Basically, if you don’t have a company in Cambodia you can’t legally hire staff here and a lot of companies have projects or orders (like garment and footwear orders) here which need staff to carry out tasks. Our other clients for this service are companies which are registered here and need staff, usually extra headcount or project staff, but they don’t want to hire them directly so they use us.

So, what do we call this service? Well we call it Staff Outsourcing, we think that’s pretty clear. The company ‘outsources’ the staffing to us. So, what are its other names? Put simply it is often called Staffing, but that is very general and often refers to a headcount-focussed service which includes temporary staffing and flexible workforces. Very often informally a client will talk about ‘parking’ staff inside our company and although that is clear we really don’t like to think of our outsourced staff as parked cars.

Some American companies call us a PEO and this stands for Professional Employer Organisation which highlights that we are a company that offers the service of employing people. But in the USA a PEO takes on all the employees of a company and that is something we don’t usually do, we only take on the employees in Cambodia. Another American term is EOR which means Employer of Record. This reflects that we employ the people and do all the documentation – but we don’t direct them, our client does that. Both of these terms describe the company though, they don’t say clearly what the company does – which is outsourcing staff, which is why we call it that.

Compliance is the point behind the terms PEO, EOR and compliance is the bedrock of what we do. When anyone uses the word ‘compliance’ a lot of people in business switch off. They associate it with the kind of rules and regulations which hold back the forces of the market from doing their job, but actually the opposite is true. Compliance means a level playing field, competition actually flowering and growing because none your competitors obtain an unfair advantage by breaking laws. In reality, in a market like Cambodia increasing compliance is good for everyone. Compliance doesn’t actually mean much more than following the law, and who is truly in favour of breaking the law?

Although I said earlier that you can’t employ someone in Cambodia without having a company here what I should have said is that you can’t employ someone ‘compliantly’ without having a company (or an entity like an enterprise or an organisation which is registered in some way). Saying that, a lot of ‘non-compliant’ employment still goes on. Sure, you can get someone to work for you without a contract, you won’t make any tax deduction or register them in the social fund but they will come to work and do the job, and you will probably pay them in cash.

Some companies outside Cambodia who have orders or projects here offer someone a ‘consultant’ agreement. The company doesn’t treat them as staff but it solves the immediate problem of getting tasks done on the ground. However, this solution causes massive compliance issues and it exposes the company to risk. The first risk is that the company is acting illegally in Cambodia – some companies don’t have an issue with that and are quite happy to break the law in a country where they are not registered. The risk only becomes real and costly however is when there is a dispute. The consultant here usually has no legal standing as a representative of the company in any kind of dispute, and the other side of that is the consultant cannot be held accountable for their actions.

Apart from the illegality and risk issues there is another huge issue with ‘informal’ or ‘consultant’ employment contracts. Putting on my other hat, as a recruiter I would tell you that by only offering this kind of employment then you have identified yourself as a fourth-rate employer and that means you can only have access to the fourth-rate candidates. This sounds a little harsh but in the Cambodia labour market there is a shortage of skilled and experienced staff in a lot of areas. Competition for the best staff is fierce, the best candidates know this and they all aim to work for the best employers. It is a perfect example of the market at work.

Some days I wish I had called the company ‘Top Recruitment and Staff Outsourcing Cambodia’ – but that was done years ago, and besides, the official name of the company is Khmer Top Service Ltd. That name was chosen to reflect that we are a service-oriented company offering top quality services. Whatever we call the service we offer which is not recruitment is always going to be a problem because it isn’t as clear as I would like it to be, but, after 14 years or so I really ought to be used to it.

Whatever you want to call it, if you are looking for this service you should contact Tim Montero who will give you full details of service levels and pricing.


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