When your company faces hiring needs, often the first thing that comes to mind is to make a long term hire. In actuality, there are a variety of alternative workforce solutions available to fulfill hiring needs, each with its own features, benefits, and costs. Employee leasing is a staffing solution that should be considered for the following reasons:
Decrease Administrative Cost Burden
According to United States Chamber of Commerce Statistics, “the average business spends 36.6% of gross payroll on employee benefits, and another 8.5% on payroll administration.”
Considering the costs of HR administration associated with onboarding your own employees and providing ongoing benefits and payroll processing, partnering with a staffing agency to lease employees is a cost effective alternative as the agency incurs these administrative costs at an all-inclusive rate.
Mitigate Employer Liability
Leasing employees means that a third-party staffing agency is the employer of record for your staff. Through an Employee Leasing structures, staffing agencies help by acting as a Safe Harbor for your company, assuming the responsibilities and liabilities that come with being an employer.
Access to Desirable Benefit Plans & Rates
Agencies that offer Employee Leasing services can leverage economies of scale and can therefore negotiate with benefits providers. This means a staffing agency may be able to offer more competitive and desirable benefits, such as extended health insurance, dental plans, and pensions, at a much lower cost than your company could negotiate on its own.
Gain Performance Management Support
If you’re partnering with an active staffing agency that manages their employee’s performance with scheduled reviews and retention programs, the employees you lease will be provided support on an ongoing basis by the staffing agency. While this active management style is not always requested by companies who lease employees, some companies prefer it as it allows for objective feedback to be given to both the employee and the company, and training and development support to be provided when required.
Employee leasing is not simply outsourcing your HR or payroll department. Oftentimes, small to medium sized businesses don’t have the luxury of ‘departments’ to handle these imperative HR functions. With employee leasing, companies are able to offer a much wider variety of HR support to their employees because of the nature of the co-employment relationship.
Partnering with a staffing agency can act as your port in the storm by being the employer of record to shelter you from liability concerns whilst reeling in additional benefits for both you and your employees.