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Any type of company needs a reliable workforce to handle daily operations and responsibilities. This often includes employees who are responsible for the business’ core operations like production, marketing, and actual selling.  On the other hand, there are also those who are in charge of administrative responsibilities like recruitment, payroll, and employee benefits.

Unfortunately, most SMEs (small-to-medium enterprises) may find it difficult to achieve a sufficient number of employees to carry out all these necessary tasks.

Not only would a startup company find difficulty in hiring, but it would also have problems preparing all the nitty-gritty tasks concerning employment. This is especially true if there aren’t enough finances to hire everybody on a full-time basis. Thankfully, there are ways on how to bridge this gap in order to succeed in the early years of business.

What is Employee Leasing?

Employee leasing is an arrangement between a company (client) and a service provider who then ‘leases’ members of its staff in order to take care of some or all the administrative tasks of the client. The goal is to take off as much burden as possible from the client’s shoulders so that its full-time employees can focus on its core competencies and other related services.

Companies that offer employee-leasing programs are also referred to as professional employer organizations (PEOs). Today, the advent of the Internet and the advancement of Information Technology have allowed even better collaboration strategies between clients and PEOs.

In an employee leasing setup, while the leased worker directly gets instructions and details from you, it is the PEO that will take care of his or her pay, as well as other employee benefits.

Staff leasing has been around since the 1980s, and it has continued to gain popularity because of the way it supports startups until they can stand on their own. Surely, there are reasons why staff leasing is still a popular option both for SMEs and non-SMEs even after all these years. If you want to know more if it would benefit your business, then you’ve come to the right place.

Is It for Your Company or Not?

Knowing whether employee leasing is for your company or not is easy. Most of the time, it all boils down to two crucial factors: cost and efficiency. Cost pertains to your ability to pay for all the manpower you need to fulfill every responsibility, ensuring smooth company operations. This also includes the different employee benefits that you are willing to provide to keep your workers satisfied and loyal.

Meanwhile, efficiency is your workforce’s capacity to finish every task promptly without sacrificing quality. As a startup, your business’ primary goal should be to put as much time as possible to what you specialize in. This can help your employees gain more knowledge and skills that are relevant to what you’re actually selling or promoting.

Below are some of the different administrative and specialist tasks that can be provided by a PEO for your business:

  • Recruitment Procedures – This may include recruiting talent and hiring new employees, implementing screening procedures, as well as conducting training.
  • Payroll Tasks – Taking care of payroll duties including taxes, reporting, etc.
  • Employee Benefits (Insurance, Dental Benefits, etc.) – Calculating and providing the different benefits within and beyond what’s mandated by law.
  • Professional Skills – Human resources and risk management skills are essential additions to any startup to prevent or solve mishaps.
  • Law Compliance – Provides assistance to the client in complying with state and federal laws.

If you don’t think you have enough to cover all employment-related expenses, or if your employees fail to complete all given tasks promptly, then outsourcing some responsibilities can definitely help.

Why Staff Leasing Can Be Effective for Your Business

If your business is experiencing difficulty in either cost or efficiency or both, then it’s good to know that there is hope. You may want to consider staff leasing as you take note of its many benefits:

Reduced Employee Workload

One advantage of having leased employees is that it will reduce the workload of your full-time workers. You don’t need to get your own HR or administrative staff because the PEO’s staff is already working to fulfill back-office assignments like payroll, headhunting, training, etc.

Because the leased staff does the outsourced tasks, your employees can focus more on responsibilities that matter to your company’s advancement. If your company provides the latest cutting-edge technology, then that’s exactly what your professionals will be doing. If you’re in the business of selling something, then your team can focus on doing just that.

Lower Employment Expenses

Hiring a single employee on a full-time basis is costly, and building an entire staff or department is even more expensive. Oftentimes, startup companies face the difficult decision of building a team that will be dedicated to taking on administrative work. This is usually made up of the recruitment officer, a payroll employee, and a human resources administrator. Administrative tasks and tedious paperwork are essential to any company to function properly, but these responsibilities hardly help in pushing the business forward.

By getting leased employees, you’re not only saving money by working with a professional employer organization, but you can also save time – one important company resource that is often underestimated.  It takes an expert leased professional less time to finish a certain task than a full-time employee who has just started doing administrative work.

Better Employee Benefits

Most of these PEOs specialize in providing leasing services for admin tasks and human resource management responsibilities not just for a single company, but also for multiple businesses. Because of this, they may be able to enjoy certain group discounts when availing different kinds of employee benefits such as health and life insurance, and medical and dental coverage. Startup companies rarely enjoy these employee benefits due to high company contributions.

So, what’s the big deal about better employee benefits? If there’s one thing you need to learn as a new entrepreneur, it’s that your employees are your company’s greatest assets. In relation to this, you better make sure to do whatever it takes not just to provide proper training, but also make sure they remain satisfied and loyal to you. Getting the extra benefits for them is one way to achieve this.

More Experienced and Skilled Leased Employees

Since your company is acquiring leased employees, you can be confident that they’re not just amateurs in what they do. Expect your leased staff to be among the best in the business. Equipped with years of experience in doing the same tasks over and over again, this group of professionals would not just comply with instructions. They will also make sure to take care of any issues and problems that may arise while they’re working.

Instant HR or Administrative Framework

Creating a task workflow is one of the most difficult things to do when you’re starting a business. Usually, it will take a supervisory level officer to be able to work out something from scratch for other employees to follow. Unfortunately, at this stage of the game, hiring a single supervisor level admin officer may not be too beneficial for your long-term goals, especially with only a handful of employees.

This is where leased employees play a crucial role. Once they come on board the team, they’ll certainly bring with them the expertise, tools, know-how, and experience of doing HR and administrative work. They’ll hit the ground running, making sure that they provide the finest services to you, the client. While working with your leased staff, you may simply adopt their strategies and framework for your own use in the future.

Find a Staff Leasing Company Today

These are just some of the many benefits of employing leased staff for your startup. Remember that it takes a competitive admin staff to get the momentum your company needs. However, you just have to admit the fact that at this point, hiring your own is not the most cost-effective solution.

Working with professional employer organizations is not difficult. It only takes a few simple steps for you to lease the employees you need. First, make sure to set up a consultation meeting with your chosen PEO, and talk about what your company needs. The leasing company would afterward send a proposal letter, including all the terms and conditions of the contract.

Review all the terms and ask for clarifications when necessary. Then, sign the agreement, select the qualified professionals, and then implement the employment of the leased staff. Depending on the length of the leasing agreement, it is ideal to conduct an evaluation every few months. This will ensure that you and the leased employees are still on the same page.

Once you begin working with leased professionals as your administrative team, you will notice a more efficient workflow from your full-time employees. The small leasing fees won’t even compare to the worry and trouble-free operation that your company will enjoy for the next few months, or years.

So, what are you waiting for, start asking around and check the different PEOs that you may tap to lease employees?

Written By
Regina del Rosario is from Booth & Partners. With a solid background in conducting interviews with multiple candidates to identify the one with the most potential. Hired over 100 applicants for positions in dozens of industries and campaigns, at levels ranging from interns to upper-level management.

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