When a production company in Atyrau says it wants to "put its people on contract," it almost always turns out that one wish hides two entirely different services. Staff outsourcing vs outstaffing sounds like a matter of spelling, and the two get mixed up in emails, in proposals, and even in the body of signed contracts — but behind the words sit different legal constructions, a different split of responsibility and, in the end, different money. Getting the term wrong is not a stylistic slip; it ends in a labour-inspection claim and a tax reassessment.

Let us sort it out without the confusion. Over years of staffing oil and gas projects in western Kazakhstan, we at FSSA keep seeing clients ask for "outsourcing" while describing classic outstaffing — and the other way around. The price of that mix-up is measured not in vocabulary but in who turns out to be the employer in a dispute, who answers for occupational safety, and whose people land in your headcount when the foreign-labour quota is checked.

Strip away the marketing wrapper and the difference comes down to four plain questions. Who stays the formal employer of the people? On whose balance sheet and payroll do they sit? Who keeps the HR and tax records and runs the payroll? And, above all, who directs those people day to day and hands them their tasks? Outsourcing and outstaffing answer these questions differently, and the whole practical difference rests on those answers.

Staff Outsourcing vs Outstaffing: Where the Line Really Runs

Outsourcing is the handover of a whole function or process to an external provider who does the work with its own people and hands you a result. You do not hire or manage anyone; you buy a service: a clean rotational camp, a closed accounting period, a working IT system, a staffed canteen, organised crew transport. How the provider recruits, trains and deploys its workers is its concern. Cleaning, catering, transport, security, bookkeeping, HR administration, discrete engineering tasks — these are the typical candidates for handing off a function, that is, for personnel outsourcing.

Outstaffing works the other way. Here you get not a result but specific people — they show up at your site, work under your direction, slot into your shifts and processes, yet remain on the provider's payroll and balance sheet. It goes by several names: taking staff off the books, personnel provision, staff leasing, outstaffing. The essence is the same — the working hands are effectively yours, while the legal employer is someone else, which is exactly how staff outstaffing works as a service. You tell the welder or the rigger what to do today; the company that signed the employment contract with them handles and pays the salary, the leave and the sick days.

Hence a simple test that settles most terminology arguments at the negotiation stage. Ask yourself: are you buying a finished result and would rather not look into how the people work — that is outsourcing. Do you need working hands under your direct control without inflating your staffing table — that is outstaffing. The moment you start handing tasks directly to "outsourced" workers, you have in substance moved into outstaffing, with all the duties that follow, even if the contract says otherwise.

Who Stays the Employer — and What the Law Says

It helps to know that in Kazakhstan the provision of personnel was a legal grey zone for a long time. Back in 2010 the Ministry of Labour stated plainly that outstaffing "in its pure form" did not comply with labour law and advised dressing up a temporary assignment as a business trip. That changed with Law No. 386-VI of 19 December 2020, which added Article 687-1 to the Civil Code (the contract for personnel-provision services) and Article 137-1 to the Labour Code. From that point, personnel provision is a legal service described in statute, not a shadow scheme.

The law assigns the roles firmly. The sending party — the one providing the workers — remains their employer with every obligation attached: it holds the employment contract, calculates and pays the salary, keeps the HR and tax records, makes the deductions, and carries the people on its own payroll and balance sheet. The receiving party — your business — directs and controls the work, keeps the record of working time (including overtime, rest days and holidays), provides the workplace, equipment and tools at its own expense, and ensures safe conditions. At the same time the receiving party may not discriminate in pay: a provided worker cannot earn less for the same work merely because they are "not on staff."

Article 137-1 adds limits that clients often forget. People may be sent to heavy work or work with harmful and hazardous conditions only where the receiving party's workplace certification exists, and the worker must be shown its results. The occupational-risk class must meet the mandatory accident-insurance rules — an uninsured worker cannot be put to work. And there are flat bans: provided personnel may not replace strikers, nor cover idle time, bankruptcy or short-time working that an employer uses to save its own jobs. Any contract term that worsens the worker's position compared with the Labour Code is void.

Outsourcing lives in a different part of the law. It is an ordinary paid-services contract under Chapter 33 of the Civil Code: you pay for a service or a result, and the provider's staff do not report to you — neither formally nor in fact. The HR and tax records of those people sit entirely with the provider, and they do not enter your company's average headcount. Personnel provided under an outstaffing contract, by contrast, do count in your headcount — this is written into the Entrepreneurial Code and matters, among other things, for the ratio against the foreign-labour quota. The salary, incidentally, is paid by the provider in both models; the difference is not whose cashbox the money leaves, but who directs the people and who counts as their employer before the law.

When Each Option Pays Off — and Where People Get It Wrong

Outstaffing is justified when you need specific people under your management, built into your processes, but putting them on staff makes no sense or is not possible. The classic regional case is a rotational crew for a construction-and-installation peak: fitters, welders and general labourers are needed for three or four months, your site supervisor runs them, and you have no wish to keep them on the staffing table once the facility is handed over. The same goes for seasonal spikes, project teams, cover during parental or long-term leave, and situations where a company has hit its approved headcount or is managing a quota for foreign specialists. The payoff is flexibility plus shedding HR administration without losing control over the people; we have looked separately at when outstaffing pays off. On rotation projects in western Kazakhstan this is exactly what makes the tool popular: you need many people fast, the schedule is choppy, and keeping a whole crew on permanent staff between projects is uneconomic.

Outsourcing pays off in the opposite logic: when a function is non-core and you want it off your plate entirely, receiving a result rather than a headache. You do not need to manage cooks, cleaners or drivers — you need the canteen to feed, the camp to be clean and the shifts to reach the site on time. Responsibility for recruiting, replacing a sick worker, training and quality then rests with the provider: if someone fails to show up, finding a replacement is their problem, not yours. For many production companies that is the main argument — outsourcing shifts the operational risk of a non-core process onto the party that specialises in it.

Now to the traps people hit most often. The costliest mistake is mislabelling: a service is called "outsourcing" when in fact it is personnel provision, with people working under the client's direction. This is sometimes an attempt to sidestep the guarantees of Article 137-1 — and it fails, because in an audit the labour inspectorate or a court looks at the actual relationship, not the contract's title, and reclassifies the deal. The second common error is sending people to harmful and hazardous work without workplace certification, which breaks the law outright. The third is using provided personnel in banned situations, such as replacing strikers. The fourth lives inside "outsourcing": if your foreman hands tasks straight to the contractor's workers, you are effectively in outstaffing and must provide what the receiving party owes — safe conditions, time records, non-discriminatory pay.

A separate block of risk is tax. Both outsourcing and outstaffing are billed as services: the provider issues an invoice, with VAT if it is a VAT payer, and your costs reduce taxable income. But if a "service" masks a real employment relationship — for instance, your own employees are taken off the books purely to save on taxes and social payments while they sit in the same seats under your management — that invites reassessment and penalties for actually putting people to work without proper documentation (fines are counted in monthly calculation indices; in 2026 the MCI is 4,325 tenge and the minimum wage is 85,000 tenge). So the choice between the two models is not wordplay and not a way to "optimise" at any cost, but a decision about who really manages the people and who answers for them. Naming the service correctly from the start means knowing in advance who turns out to be the employer and who answers when something goes wrong.

Frequently Asked Questions

What is the difference between staff outsourcing and outstaffing in plain terms?

With outsourcing you buy a result and do not manage the people — the provider does the work with its own staff and answers for it. With outstaffing you get specific workers who work under your direction and at your site but remain on the provider's payroll. The short formula: outsourcing is a service, outstaffing is working hands.

Is staff outstaffing legal in Kazakhstan?

Yes. Since Law No. 386-VI of 19 December 2020, personnel provision is expressly governed by Article 687-1 of the Civil Code and Article 137-1 of the Labour Code. Before that the Ministry of Labour treated outstaffing as non-compliant, but today it is a legal service — provided the statutory limits are observed.

Who pays the salary and taxes under outstaffing?

The provider (the sending party) calculates and pays the salary — it remains the employer, keeps the HR and tax records and makes all deductions. The client (the receiving party) pays the provider for the service and, in turn, keeps the record of working time and ensures safe working conditions.

Do provided personnel count in the company's headcount?

Yes. Workers provided under an outstaffing contract count in the receiving party's average headcount — this is set out in the Entrepreneurial Code and matters when the ratio against the foreign-labour quota is calculated. A contractor's staff under outsourcing generally do not enter your headcount.

What is better for an oil and gas project — outsourcing or outstaffing?

It depends on what you are handing over. If you need a crew under your site supervisor for a work peak, that is outstaffing. If you need the camp, the catering or the transport simply to run without your involvement, that is outsourcing. Large projects often use both tools at once, but for different tasks.

Can I move my own employees off the books to a provider?

Technically yes, but this is the riskiest situation. If after the "transfer" the people stay in the same roles under your management and the deal was arranged only to save money, an audit will readily find the relationship to be employment, with all the consequences. Such a step makes sense only when the actual management model changes, not merely the label in a contract.