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1/ What is Co-Employment?
Co-employment is a three-party employment model involving:
- Client Company: The organization that directs and manages the employee’s day-to-day work.
- Staffing Provider: The legal employer responsible for recruitment, payroll, insurance, and labor law compliance.
- Employee: The individual who works directly for the client company but is legally employed by the staffing provider.
In this structure, the company and staffing provider share employment responsibilities, creating a flexible and legally safe framework for workforce management.
The employer, staffing provider, and employee form a triangle of shared workforce responsibility.
2/ Why is Co-Employment Becoming a New Staffing Trend?
Today’s companies don’t just need to hire—they need to hire the right people quickly. Flexible staffing models like co-employment are emerging as strategic solutions. Unlike traditional outsourcing, co-employment offers a unique mix of speed, compliance, and control over work quality.
2.1 Fast Workforce Expansion
Whether hiring dozens or even hundreds of people for short-term projects, seasonal surges, or market expansion, co-employment significantly reduces hiring lead time. The staffing provider handles sourcing, background checks, contracts, and ensures workers are ready to go.
2.2 Maintain Control Over Work
Companies still manage job performance, assign tasks, and oversee daily progress—just as they would with full-time employees. This preserves operational control while eliminating time spent on administrative tasks like social insurance, tax filing, leave, and maternity procedures.
Professional staffing providers streamline all insurance, tax, and legal procedures.
2.3 Reduce Legal Risks
As the legal employer, the staffing provider assumes responsibility for labor contracts and compliance. This helps companies:
- Avoid complicated labor disputes
- Stay compliant with insurance, taxes, and labor regulations
- Minimize fines and penalties from administrative violations
2.4 Lower Fixed HR Costs
There’s no need to expand HR or accounting departments for short-term staff. All admin operations are handled by the staffing provider, reducing operational burdens.
3/ Comparing Traditional Staffing and Co-Employment
|
Criteria |
Traditional Staffing |
Co-Employment |
|---|---|---|
|
Legal Responsibility |
Client Company |
Staffing Provider |
|
Work Management |
Client Company |
Client Company |
|
Administrative Handling |
In-house |
Handled by third-party |
|
Deployment Speed |
Moderate |
Very fast |
|
Flexibility |
Limited |
High (easy to scale up/down) |
|
Legal Risk |
High (if non-compliant) |
Low (thanks to compliance expertise) |
4/ Who is Co-Employment Best Suited For?
While co-employment isn't ideal for every organization, it is highly effective for businesses needing workforce flexibility. Ideal use cases include:
- Companies needing seasonal or project-based labor
- Foreign businesses or startups entering Vietnam without legal entities
- Organizations undergoing restructuring or cost/legal risk reduction
- Large enterprises needing rapid deployment across multiple locations
Co-employment is ideal for foreign companies without legal entities in Vietnam.
5/ Key Considerations When Adopting Co-Employment
- Choose a reputable staffing partner: Ensure they are licensed, experienced, and have a transparent management system.
- Define roles clearly: A clear service agreement between the company and staffing provider avoids overlapping responsibilities.
- Monitor employee performance: Even without handling paperwork, businesses must still evaluate productivity to optimize workforce performance.
Co-employment offers a compelling answer to the challenge of "hiring without losing control”—something every modern business strives for. When implemented correctly and in partnership with a trusted staffing provider, co-employment delivers flexibility, reduced risk, and enhanced workforce efficiency—a strong foundation for sustainable business growth.
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