What Is Staff Leasing? Is It Right for Your Company?

Before you even consider staff leasing for your business, you have to do extensive research about its pros and cons so that you can adequately assess if the strategy is a good fit for your organization. What exactly is staff leasing, and what will it do for your company?

Staff leasing 101

Staff leasing, also sometimes called by professionals as employee leasing, is a contractual business arrangement wherein an employer hires the services of an intermediary organization to help them with employment responsibilities.

These intermediary organizations are also known as professional employer organizations (PEO), and they take care of some hiring, payroll, and other employee management concerns. At the same time, you retain vital management control over the employees’ work.

Many companies these days have been opting to hire PEO’s for several solid reasons, including significantly reduced business operation costs, lessening administrative duties for core employees, and the PEO’s ability to assist employers with various employee performance evaluations.

However, like most things, staff leasing has its list of pros and cons. Know the advantages and risks of staff leasing so you could make an informed decision for your business.

A few risks to take note off when it comes to staff leasing

Whether you own a small start-up or a medium-sized enterprise, in the middle of expanding your business, or are already in the big leagues, you will probably need a lot of staff to address multiple facets of your operations. Some risks you might face when you do staff leasing include decreased power over what types of benefits or incentives you could include in employee job offers.

There are also some PEOs that will source their staff from foreign countries that may or may not work with your business model. There may also be some legal matters you have to look into, as well as cultural and language barriers that you should be aware of in terms of remote work arrangements.

The advantages of employee leasing care of PEOs

After knowing some of its risks, here are some key benefits of staff leasing that you should consider when deciding whether to dive in or not.

• Multiple industries are served

It’s a good thing that staffing companies fill positions that are in the clerical, data entry, organizational, marketing, and graphics, as well as software support fields. Some PEOs stick to one niche, but most cater to a variety of employers in search of fresh talent.

Staff leasing is a solution used in information technology (IT), business processing operations (BPO), healthcare agencies, food services, e-commerce, and many other industries.

• Organizational frameworks are given to start-up businesses

Start-ups typically do not have budgets for human resource matters. Employee leasing takes the load off from these companies because they will be managing employees using their proven framework in place. This will allow new entrepreneurs to focus on the bigger picture, which involves listening to their clients, product development, and providing marketing improvement strategies across the board.

• Flat rates remain stable for the most part

Staff leasing is one of the most cost-effective solutions you could ever apply to your business if you do your research properly. Costs are revealed upfront, which helps companies plan their budgets accordingly. Rates remain stable for the duration of the contract, and both parties are more assured that they will receive what they are due.

• Employees get better benefits with staff leasing in place

Even if the rates you offer aren’t as competitive as they should be, being able to hire more experienced staff in your field is possible with the help of staffing companies. This is because PEOs can access better benefits that can be offered to local employees, especially when it comes to offshoring or implementing remote work.

• Employee evaluations and performance management are taken care of

After you have defined your hiring standards and laid the vital job offer details, staff leasing companies can take care of employee performance management support. Some of the concerns that fall under this category include employee retention, finding ways to boost employee performance, and evaluating the population to optimize systems accordingly.

• Liabilities are brought to a manageable state

When you do hire people as an independent entity, you are a direct hit when it comes to obligations. When you hire staff leasing companies, they can share employment responsibilities when it comes to income tax, payroll, incentives, and other types of compensation applicable to your business model.

• Most staff leasing companies provide reliable human resources support services

No more head-scratching over the nitty-gritty of tedious HR concerns, especially if you know zilch about the field. Fulfilling HR functions and duties can be extremely costly and time-consuming. Staff leasing companies handle a variety of HR concerns to make things run smoothly for their clients, who typically are focused on more significant matters.

Staff leasing will help you gain top talent more easily and cost-effectively. There might be a couple of risks like not having control over what benefits you could give. Still, PEOs will be able to take care of various employee management details that you have no time to nit-pick so that you could focus on growing your company.

Sharing employee management responsibilities also cushions liability matters if and when they arise, which is less likely if you are committed to giving only the best both to your clients as well as the employee base.