Breaking Down the Basics of Employee Leasing

Posted June 11, 2014 by Layne Davlin
atlanta basics of employee leasing

How did I go without employee leasing for so long?

No, employee leasing is not a new name for slave labor. You aren’t outsourcing work to under-qualified candidates either. When you lease an employee, you work with dedicated professionals who have excellent reputations. You save so many ways, however, it almost seems too good to be true.  Below are the basics of employee leasing.

What is a Professional Employer Organization?

A PEO hires trustworthy employees to manage everyday administrative tasks like payroll or workman’s comp claims filing. They invest in up-to-date training and have the tools available to do these jobs to their best of their ability. They provide these services for business owners who don’t have the staff or resources in place to handle them on their own for less.

By investing in these services, you can lease employees for important roles in your company, either while you focus on profit-making activities or while you get your own staff hired and ready to fill the jobs instead. PEOs shouldn’t be seen as replacements but resources you can use at times when you need a helping hand. Whether or not you decide to stick with PEO staffers instead of expand depends upon your day-to-day operations, your needs and your budget.

Leasing an Employee vs. Hiring a Temp

Temporary workers became very popular over the last decade or so. Instead of hiring employees when there was a gap, businesses established contracts with workers who possessed the skills they desired. When hired through a temp agency, these workers would perform jobs at their business and would often wind up making enemies or performing poorly because of office politics.

When hired independently, it was often difficult to prevent them from qualifying as employees. Between interpersonal and legal problems, temps can be more trouble than they’re worth.

In contrast, when leasing employees through a PEO, the person working on your project is already an employee of someone else. You don’t run the risk of taking on extra responsibilities. They also often work off-site, completely removing any potential for office egos to get in the way of progress.

Jobs for Leased Employees

PEOs tend to deal in HR, accounting and other admin fields, though there are exceptions. Mainly, leased employees work in the following areas:

  • Payroll
  • Time and attendance
  • Employment benefit packages
  • Hiring, compliance and unemployment
  • Worker’s compensation and risk reduction
  • Taxes

Why Employee Leasing is Your Best Option

Firstly, hiring is very expensive and shouldn’t be undertaken untaken until you’re financially ready to do so. “Hire fast, Fire fast,” is an expensive mantra not suitable to every business. Your other alternative is hiring slow, while taking time to find the best people for the job. Unfortunately, you’ll need help while you find the right person to work for your company.

Secondly, hiring someone independently or through a temp agency leaves you at risk for substandard services and office politics. A PEO only hires people with reputable backgrounds and provable skills. Normally, you aren’t dealing with someone taking up space in your office and stirring the pot. In the event there are problems with a leased employee, a PEO has several skilled employees so it is easy to get a suitable replacement.

Business owners can use employee leasing as a short- or long-term resource. The effects on productivity and the accuracy of administration tasks is more than worth the investment. Look into your options today.

Download our free whitepaper on PEO and employee leasing today.