For small-medium enterprises, usually known as the SMEs, the process of hiring can increase the company’s budget as well as it consumes valuable time. So as your business gets bigger, the demand correspondingly grows, particularly in employing additional employees or staff. That is why some companies nowadays subcontract employees on their respective companies. These companies considered weighing out the benefits of staff leasing or staff augmentation since its cost-effective, time-saving, and convenient.

What is Staff Leasing?

Staff leasing or staff augmentation is where companies outsource the workforce through a Professional Employer Organization (PEO). The PEO can assist your business with these services they provide, which are: administrative management in employee tasks, HR consultancy, accounting, which is usually the payroll and hiring or providing technical skills.

What’s the between Traditional Outsourcing and Staff Leasing?

Both of these are management reporting structure, but why is staff leasing is a better option when you consider outsourcing your employees? Traditional Outsourcing is usually managed by the internal team of the outsourcing company. On the other hand, in staff rental, the client takes the primary responsibility to maintain the offshore team through the placement of an identified team leader working alongside the associates.

How staff leasing works and its processes?

  1. Request a Consultation to a PEO

First and foremost, you should ask yourself if your company will benefit if you take into consideration staff leasing. After you have decided this crucial question, contact a PEO to address your concerns and define to them the demands for your company. Bearing in mind that a PEO representative should support you with the initial stage of staff leasing.

  1. Review the Proposal

The PEO representative should provide you with a comprehensive proposal where they will show the extent and target of the said proposal. Take into consideration also the details provided in the plan and don’t hesitate to ask for adjustments or changes which will benefit your company.

  1. The signing of the contract

After you’ve agreed to the proposal of the PEO, you can sign the contract for formalities and be able to start the staff leasing.

  1. Recruit the Employees

Now the screening and selection for staff leasing will start, the process is not like picking apples randomly, but they select based on the job description that suits for the company.

  1. Select the Qualified Employees

After the screening process of numerous interviews and exams, the qualified candidates will be presented to you and be able to interview and shortlist the candidates towards to your standards.

  1. Execution of Staff Leasing

After you have selected your staff/crew based on your standards. You’ll be given the date from which these candidates will start working in your company. The PMO will also process the documents and training plan of these candidates.

  1. Conducting a Regular Evaluation

It is vital to perform a regular evaluation for the recruited employees in Staff Leasing. Since the recruitment process is different on how they work, it is essential that hired employees should be evaluated and adjustments may be needed. 

Nowadays, most of the SMEs consider taking advantage of staff leasing since it is useful, efficient, and reasonable to meet the requirements of these businesses. The world is not perfect, and Staff Leasing has its snags, but there are benefits and drawbacks to consider. First, we go through the benefits, and then we look at the downside of why you should consider staff leasing for your business.

Advantages of Staff Leasing

  1. The Liabilities are prominently reduced

It reduces the liabilities associated when you hire as an independent. Acknowledging that you need to consider income tax, benefits, payroll, and other compensation that makes it extremely hassle.

  1. Provides a structured framework for your business

For most SMEs, it’s hard to structure an HR Framework also include the funds to establish this framework. But if you avail for the Staff leasing services, they provide a framework that you can apply for your company.

  1. Advance performance management

Staff-leasing companies manage employee performance as well as looks with the employee’s working environment and study other things that can improve the performance and retention in the company.

  1. Extensive HR Support

Staff leasing is not merely outsourcing payroll or HR consultant. Instead, they handle the essential HR Functions that are needed by the SMEs since its costly to manage or have an HR department. Furthermore, they offer many staffing and HR solutions to make your administrative and staff management more convenient and easy.

  1. SMEs can focus on other business functions

Since staff leasing agencies are handling the employees and HR solutions. SMEs can take full advantage of concentrate on different aspects of work in their company. Moreover, staffing agencies handle the hassle paperwork and other requirements like securities, insurance, and other benefits that are required by the government.

Disadvantages of Staff Leasing

  1. Less control over the employees/staff

Since a staff leasing agency hires the majority of the employees, the control over employees is the common problem. Where SMEs owners cannot act with ultimate authority in their workplace, which they only have partial control over the employees. Moreover, the SMEs owners cannot just fire or hire employees, but it should be communicated first to the Staff-leasing firm.

  1. Lack of communication

Since SMEs lacks the bureaucracy against their employees. So if an employee demands their benefits, salary, or other HR Functions, they should contact the staff-leasing agency instead of the owners. This issue creates problems for employee communication since they report to different bosses.

  1. Issues concerning commitment

Since SME owners only lease or outsource employees from staff-leasing agencies. The long-term work relationship and company commitments are rarely developed. Considering that they are contractual employees, and usually they only provide temporary service which the SMEs needs in a specific period. Moreover, employees feel not an active member of the company since they are only limited to their task or job.

  1. The PEO only defines the standards in hiring

Since staff leasing agencies are responsible for the majority of the activities from hiring up until working for a company. The control in selecting possible candidates is controlled by the agencies along with their hiring standards, which SMEs does not know about.

  1. Increased Dependency on Staff leasing

As one of the significant downsides when you lease staff where companies depend too much on these agencies. So if the contracting agency and the company has ended.

Staff leasing provides a benefit for SMEs due to the fast, convenient, and efficient way of hiring staffs. To know more about staff leasing and their various service that they offer please visit: springboard.com.ph