Managing HR is not something that most small business employers find appealing.
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In fact, many entrepreneurs find it to be one of the least appealing parts of their job because they lack both the time and the employment expertise to adequately maintain their company's employment functions.
Employee leasing offers an escape route for employers who are fed up with in-house HR. In exchange for a fee, employee leasing providers directly hire workers and handle all of their HR tasks including payroll, benefits administration, workers comp, hiring, firing, and more.
But the decision to outsource your workers to an employee leasing firm is not necessarily the end of your HR headaches. If you're not careful about how you set up and maintain your employee leasing arrangement, you could quickly find that leasing employees is a lot more hassle than it's worth. Here are some tips to help you make the most of your employee leasing experience:
- Assess your rationale. There are a lot of reasons why employee leasing is attractive to employers. But unless you are very clear about the reasons why you want to pursue employee leasing, you may find yourself in an employment arrangement that is incapable of delivering the results you'd hoped for.
- Study your contract. The terms of your employee leasing contract will impact your company on a go-forward basis. It is absolutely imperative that both you and your employee leasing provider are in agreement about the terms described in the contract.
- Understand the consequences. As a company that uses leased employees, you will experience less control over your employees because they technically aren't your employees. Although you have complete control over what happens in the workplace, the leasing company is the employer of record – and carries ultimate authority for hiring, firing, and other employment decisions.
- Prepare your staff. If your business is transitioning to an employee leasing arrangement, you'll probably have to fire your employees so they can be re-hired by the leasing company. Unless your staff understands what you are doing and the reasons why you're doing it, it could unleash an HR disaster on your company.
- Solicit input. After the employee leasing arrangement is in place, you will want to conduct periodic assessments and reviews. Go the extra mile to solicit input from employees about the leasing arrangement and whether or not it is meeting their HR needs.