Careers And Employment

Employee LeasingProducts Relating to 'Employee Leasing'

Employee leasing is the idea that you outsource most of your human resources tasks to a third party. You still hire, fire, and promote your employees. But, you don't deal with payroll, benefits, or even workplace issues such as developing employee handbooks.

When you enter an employee leasing contract, all of your staff becomes staff of an employee leasing company. You no longer have employees.

But your ex employees still work for you. They get the same salary, have the same tasks, and work the same hours. The one difference that they will notice is that the quality of their benefit package increases significantly.

As an employer with fewer than 50 employees, you don't have much leverage to negotiate good benefit plans. Health care plans are spiraling out of control and there is not much you can do about it as a little guy. You may not even be able to offer life, disability, or dental insurance.

But the employee leasing company has literally tens of thousands of employees, giving them great clout with benefit companies. They take your 20 employees and another guy's 30 employees, and pretty soon, the numbers give them significant leverage.

As a result, you are able to offer a better benefit package to your employees. They will be more motivated to work hard and less likely to jump to greener pastures.

But that's not all an employee leasing company can do for you. They can also handle payroll. As you know, payroll is not just about handing out checks on Friday. It's also about calculating payroll taxes, handling wage garnishments, and keeping proper accounts. Many small companies require a full time payroll clerk to handle these tasks. The employee leasing company takes over this chore. They are able to do it more efficiently than you both because of the scale of their operation and because they have streamlined the process.

The employee leasing company will also help you resolve workplace issues. They have particular expertise in developing employee handbooks that will help to keep you out of court.

When you engage an employee leasing company, you pay them the amount of the salary, payroll taxes, benefits, and a 2% to 6% administrative fee. Given that you may be able to eliminate a clerk position and that you will be able to offer better benefits, the small charge will probably pay for itself in the first months. There is also a start up charge that varies based on the size of the business and the programs offered.

Small businesses are more nimble. They are better able to react to changing business conditions. In many ways, working for a small employer has many advantages to the employee. But the human resource functions of a large employer have traditionally been superior. Employee leasing levels the playing field.

Article Published: Monday 17th December 2007