Employee Leasing

Advantages of Employee Leasing

Other business owners are leasing employees while you continue to do things the old-fashioned way. What do they know that you don't know?

You've probably heard about employee leasing.

Some business owners swear by it as a proven and convenient method for outsourcing time-consuming HR functions. Other business owners, however, aren't so easily convinced.

The truth is that employee leasing can offer significant advantages for small business employers. The way it works is that instead of employing workers directly, your company's human assets are employed by an outside company–an employee leasing provider. The employee leasing provider handles everything from hiring to HR administration, freeing your business of the burden typically associated with maintaining direct hires.

As a business that uses leased employees, you can expect to benefit from a handful of specific advantages that simplify the task of small business ownership and can improve your ability to compete with other small to medium-sized employers.

  • Focus. Hands down, the number one advantage small business owners receive from employee leasing is the ability to focus on their companies' core competencies. Keeping up with your company's HR responsibilities is a time-consuming and thankless job with little direct influence on your primary business functions. Employee leasing lets someone else handle your HR headaches so you can focus on what you do best.
  • Efficiency. There is a cost associated with employee leasing. Leasing companies assess a per worker charge each pay period. But when you weigh their fee against the amount of time you could spend solving HR problems, handling your own payroll, and filing your own payroll tax reports, there's a good chance employer leasing will result in a cost savings for your business.
  • Better Service. Employee leasing companies specialize in HR functions and issues that matter most to employees. These providers are often large companies that can take advantage of economies of scale. Because of the number of people they employ for all their clients, it's easy for them to offer things like automatic payroll deposit and online account access. Employee leasing companies are also able to offer lower rates than you can for health insurance and other benefits.
  • Risk Management. In an employee leasing arrangement, your workers are employed by the leasing company. This – combined with the specialized HR skills the leasing provider brings to the table – translates into fewer employment risks for you and your business.

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