Novelworx
Short answer: The three models differ on two questions: who finds the people, and whose rolls they sit on. In permanent hiring, you employ them directly. In payrolling, you choose them and a firm employs them. In outsourced staffing, the firm finds and employs them. The right choice depends on how core, how permanent and how numerous the roles are.
Most companies don’t pick one model and stick to it. A business might hire its leadership permanently, payroll a project team it found itself and use outsourced staffing for a warehouse. This guide sets out how each model works, what it costs you in time and risk, and when each one fits.
What is permanent hiring?
In permanent hiring, the person signs an employment contract with your company and joins your rolls. You may use your own HR team or a recruitment firm to find them, but once they join, you are the employer in every sense.
That means you run their payroll, register them for Provident Fund and Employees’ State Insurance where they are eligible, deduct Professional Tax in states that levy it and deduct TDS on their salary. You hold the records, handle leave and grievances, and manage the exit when they leave.
Where it fits: core roles you want to develop and keep. Leadership, specialists who hold critical knowledge and anyone whose loyalty you want to build over years.
What to watch: the full cost of employment sits with you, including the people and systems needed to stay compliant. If you hire in a new state, its registrations become your job too.
What is payrolling?
In payrolling, you choose the person, but a payrolling firm employs them. The person works in your team and takes direction from your managers. The firm issues the employment terms, pays the salary and carries the statutory obligations that come with being the employer.
At Novelworx we call this You Hire, We Manage. The people you choose move onto our rolls, and we run onboarding, payroll, PF, ESIC, PT, attendance, leave and exits through a central HRIS.
Where it fits: people you have already found but don’t want to employ directly. Fixed-term and project teams, fast growth that has outpaced your HR team, or founders who would rather not run payroll at all.
What to watch: payrolling is not the same as payroll outsourcing. In payroll outsourcing your employees stay on your rolls and a provider only processes the payroll. In payrolling, the employer changes.
What is outsourced staffing?
In outsourced staffing, a staffing firm recruits the people, employs them on its own rolls and deploys them at your site. You get a ready workforce. The firm carries recruitment, employment, payroll and compliance.
At Novelworx this is Hire & Deploy. We recruit and vet blue-collar, grey-collar and technology talent, deploy them at your site on our rolls, and keep employment, payroll and statutory compliance with us.
Where it fits: volume and site roles, seasonal or project peaks, entering a new city before you have local HR, and headcount you want off your own rolls.
What to watch: when a contractor supplies workers who work at your establishment, the arrangement usually falls under contract labour rules. Your business is typically the principal employer, which carries its own registration and record-keeping duties. A good staffing firm helps you meet them rather than leaving you to discover them at an inspection.
How do the three models compare?
| Question | Permanent hiring | Payrolling | Outsourced staffing |
|---|---|---|---|
| Who finds the people | You or a recruiter | You | The staffing firm |
| Whose rolls | Yours | The firm’s | The firm’s |
| Who runs payroll and compliance | You, or a payroll provider | The firm | The firm |
| Who directs the daily work | You | You | You, at your site |
| Best for | Core, long-term roles | People you’ve chosen, held off your rolls | Volume, site and fast-changing roles |
How do you choose between them?
Work through four questions for each role, not for the company as a whole.
- Is the role core to how you compete? If yes, lean towards permanent hiring.
- Have you already found the person? If yes, but you don’t want to employ them, payrolling fits.
- Do you need many people quickly, or for a defined period? Outsourced staffing usually fits better.
- Do you have the HR and payroll capacity to be the employer properly? If not, either of the on-rolls models removes that load.
A common pattern is a hybrid. Leadership and core specialists are hired permanently. Project teams the business has chosen are payrolled. Site and volume roles run through staffing. Some staffing firms also offer temp-to-hire, so a person can start on the firm’s rolls and move to yours later on terms agreed upfront.
What should you ask a provider before you choose?
- Which models do you offer, and will you tell me when one is the wrong fit?
- Who is the employer on record in each model, and what does that mean for my obligations?
- How do you handle PF, ESIC, PT and TDS, and how will I know each deposit was made?
- What happens when someone leaves, including full and final settlement?
- How are timelines, reporting and reviews written into the SLA?
Where Novelworx fits
Novelworx offers all three routes, along with IT staff augmentation and temp-to-hire, so the recommendation can follow the role rather than the product we happen to sell. We have 3,000+ people on our rolls, and clients whose compliance we manage have recorded zero statutory penalties.
Compare the manpower models, read how payrolling services and Hire & Deploy staffing work, or get a scope and SLA.