May 26, 2020 is a daily online magazine covering small business news. We help entrepreneurs transform ideas and innovations into greatness.

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Employee Leasing


Leasing Employees

You've heard that employee leasing can eliminate the headaches usually associated with HR. Now you're wondering what you have to do to lease employees and eliminate the hassle of having full-time employees? Here's how it's done . . .

Employee leasing gives small business employers another option for hiring and managing their company's human assets.
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Instead of handling the headaches of HR themselves, business owners outsource their HR functions to employee leasing providers. Workers are then hired and employed directly through the employee leasing provider.

Sounds simple, right? Although employee leasing isn't necessarily complicated, there are plenty of places where you can go off-track. Details may vary slightly from one arrangement to the next, but in general here is the process you'll want to follow:

  • Clarify goals. There is a lot of confusion about the terms that are used to describe various employment arrangements. If you are interested in outsourcing your current employees and maintaining a long-term relationship with them, then a Professional Employer Organization (PEO) is probably your best bet. But if you're less interested in a long-term relationship, then temporary staffing or a more typical employee leasing arrangement will suffice.
  • Research options. There are a lot of employee leasing providers out there, so you'll need to do plenty of research to narrow down your options. Contact the most promising ones you find and make a selection based on the provider's ability to offer staffing that is most suitable for your business model.
  • Establish a transition plan. If your employee leasing arrangement calls for any current employees to be hired by the leasing provider, you're going to need to devise a transition plan. Typically, you'll need to fire all of your employees before they can be rehired by the leasing provider.
  • Communicate. Communicate. Communicate. It is absolutely imperative that you educate your staff about the transition to an employee leasing arrangement. If you don't provide adequate information, rumors and misunderstandings will run amok, potentially tanking your efforts to create a more streamlined and more efficient system of dealing with HR.
  • Review and assess. Once your employee leasing arrangement is up and running it will need to be periodically revisited to make sure it is functioning effectively. Does the employee leasing process meet your expectations? Are you realizing the benefits you hoped to achieve? These and other questions will need to be answered before you can determine whether or not employee leasing is a viable long-term HR solution.

Related Articles

Want to learn more about this topic? If so, you will enjoy these articles:

Professional Employer Organization Pros and Cons
PEO Versus Employee Leasing
Advantages of Employee Leasing
Disadvantages of Employee Leasing
Employee Leasing Tips

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