Why Staff Leasing is a Smart Move for Small- to Medium-sized Businesses

As the owner of a small- to medium-sized business, you may already considering outsourcing as part of your strategy for growing your business. One form of outsourcing you may be seriously considering is staff leasing, which has become increasingly popular in recent years. This strategy is somewhat of a cross between outsourcing and keeping things in-house because the leased employees work exclusively for you, though they work in an offsite location. There are several reasons why this form of outsourcing can be ideal for small- to medium-sized businesses like yours.

Staff Leasing Benefits for Small- to Medium-sized Businesses

Among the best reasons for small business owners to lease some of their staff are:

1. Focus – Most small business owners are pretty hands-on when it comes to running their business, but that doesn’t have to mean you should do everything yourself. In fact, it would ultimately be best for your business if you focused on the core aspects – the things you know best. This can be achieved either by hiring an in-house team to handle the non-core processes that are necessary for the smooth operation of your business or by leasing a team for this purpose. Later we will discuss why leasing is often deemed the better option.

2. Productivity – When you get the opportunity to focus on the things you do best and your employees (both in-house and outsourced) also get to do the same, you can expect the entire team to become significantly more productive. After all, you’re all able to focus your energies on the things you know you do very well and you’re not burdened with responsibilities that may not really be your strong point. Such focus will also enhance the sense of professionalism in your organization, since every member of the team knows exactly what he or she is doing.

3. Savings – Now, this is perhaps the number one reason why many business owners choose to lease staff rather than hire an in-house team if they want to focus on the core of their business. You see, keeping an in-house team requires you to provide office space, equipment, materials, and of course, salaries and bonuses. When you lease, you get to save on the overhead expenses and either save the money for rainy days or spend it on other important business-related expenses. You can save even more by leasing employees from an offshore location, particularly countries where the cost of labor is relatively low, but the quality of the workforce is high.

These are the three most significant reasons why staff leasing is deemed a viable solution for small- to medium-sized businesses. Of course, you’ll have to weigh your circumstances carefully and take some specific factors into account to determine if this solution is also viable for your business or not. Should you decide to take advantage of this form of outsourcing, don’t forget to go through a careful screening process to make sure you hire the right outsourcing company.

How to Avoid the Pitfalls of Staff Leasing

Many of today’s companies are taking advantage of staff leasing services and the perks they bring. However, staff leasing comes with the possibility of several pitfalls. After all, no business strategy can claim to be completely fail-safe, right? The good thing here though is the possible pitfalls of this staffing arrangement can be easily avoided by the clients.

Here now are some of the pitfalls that skeptics have often cited to counter the perks touted by long-time

clients of employee leasing companies. They are followed by tips on how they can be avoided.

1.       The quality of the service matches the cheap rates of the service providers.

This is a very condescending statement which suggests that staff leasing companies cannot be expected to give high-quality services because their prices are very little to begin with. What detractors fail to consider is that many of these companies are from developing countries in Asia and Latin America. Once currencies and conversions are applied, that “little” amount becomes a significant sum for the service provider. Hence, it cannot be said that they are operating on very cheap costs.

TIP: It’s actually right to question if a leasing company charges too little. “Too good to be true” rates aren’t really good sometimes. So when you are screening companies to hire, don’t immediately choose the one that offers the lowest rates.

2.       Since employee management is in the hands of the staff leasing company, clients will have less control over the leased personnel and the work they are doing.

This is an erroneous assumption. In fact, clients will always have the highest authority when it comes to SOPs and delegating tasks to specific employees. The leasing company is always free to give their recommendations; but if the client is adamant about a specific preference, the service provider will comply to keep him satisfied.

TIP: As the client, you need to give clear instructions and make your preferences be known to your service provider because the latter will do what it can to please you.

3.       It will be difficult to train leased personnel, especially if the service provider is overseas. Hence, the arrangement will not benefit the client because the staff won’t know what to do.

On the contrary, staff leasing companies boast highly trained and skilled employees. Clients who pay for their services will in fact benefit more because they won’t have to spend for training the employees. The staff they lease can immediately go to work with minimal instructions and monitoring.

Remember that service providers will offer only the services they specialize in. That’s why we have different kinds of staff leasing companies. Some offer HR services, bookkeeping, computer programming, website optimization, virtual assistance, and so many more. What clients simply need to do is find a company whose staff can fill in the vacant positions in their business.  

TIP: Ask your service providers for ideas and recommendations. If they have been in business for years now, they will have plenty of excellent suggestions that you might be able to use to improve your business operations.

Employee Leasing Services – Debunking the Myths

You may have heard of employee leasing services a few times already, but like many people, you may not really have a clear understanding of it. Worse, you may even have fallen into the trap of holding some common myths about this kind of service as truth. Here we will debunk those myths and try to explain the service to you in the simplest way possible.

Myths about Employee Leasing Services

1. Leasing employees entails more cost.

The opposite is, in fact, true. When you lease employees, you no longer have to worry about setting up these employees in your payroll system, providing them with benefits, and establishing a retirement program for them. That’s because the company you lease employees from will be responsible for handling these financial matters.

2. Leasing employees takes control out of your hands.

Again, the opposite of this is true. The only thing you’re basically doing when you lease staff is outsourcing non-core functions that are necessary for the smooth operation of your business. You’re still in control of the operations per se. You’re just letting someone else handle the mundane tasks that would otherwise distract you from focusing on the core aspects of your business.

3. Using a PEO broker entails more cost.

There are those who recommend using a broker when you decide to lease staff. Some, however, hesitate to do so, believing it will be more expensive. What you may not realize is that a PEO broker causes PEOs to compete, thus driving down their rates considerably. Brokers are also very familiar with the strengths and weaknesses of each PEO they represent, which puts them in the best position to recommend a PEO that best meets your requirements.

What Employee Leasing Services Can Do for Your Business

Just by having the above myths debunked, you already know that when you lease employees, you save on

cost while staying in control of your business. Other than that, though, this service also offers you more flexibility. With leased staff, you can expand or reduce your workforce as needed without having to go through a lot of red tape. Furthermore, the service frees up your time that will otherwise be used for administrative functions. This leaves you free to focus on doing what you do best and will potentially increase your productivity and consequently, your ROI.

Seeing how much you can benefit when you lease employees, there may really be no reason for you to disregard this business solution. You especially need to consider this option if you’re just starting out and can’t afford to hire all the employees you need for day-to-day tasks or if you’re currently going through hard times and need to cut costs. When businesses suffer financial difficulties, they’re usually forced to let go of a few of their employees. By leasing staff from a third-party company, the tasks handled by the employees you let go don’t have to be left unattended.

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