Staff Leasing: What Is It and How Does It Work? 

As companies are constantly looking for ways to optimize their operations and cut costs while maintaining high-quality standards. One increasingly popular solution is staff leasing. But what exactly is staff leasing, and how can it benefit your business? 

What is staff leasing?

Staff leasing, also known as employee leasing, is a business arrangement where a company hires employees through a third-party provider, typically a Professional Employer Organization (PEO) or a staffing agency. These leased employees work for the client company but are officially employed by the leasing agency. This setup allows businesses to access skilled talent without the administrative burdens and costs associated with direct employment.

The concept originated in the late 1960s as businesses sought ways to manage the rising costs of workers’ compensation coverage and other employment-related expenses. Initially, employee leasing firms focused on helping companies mitigate these costs by pooling resources and providing a shared employment mode. Over time, the practice evolved to include a broader range of HR services, including payroll management, benefits administration, and regulatory compliance.

With advancements in technology and the globalization of the workforce, staff leasing has become a strategic tool for businesses worldwide. The rise of software and digital platforms has made it easier for staffing agencies to match skilled workers with client companies efficiently. Today, staff leasing is widely used not only to reduce costs but also to gain flexibility in workforce management and access to top talent across the globe.

The benefits of staff leasing

In the current market, staff leasing providers operate globally, with significant operations in regions like the Philippines, India, and Eastern Europe. These areas offer a high availability of skilled professionals at competitive rates, making them attractive destinations for businesses looking to outsource various functions. The industry continues to grow as companies increasingly seek to optimize their operations through flexible and cost-effective staffing solutions. 

Staff leasing offers significant cost savings by outsourcing human resources (HR) functions such as payroll, benefits administration, and compliance, allowing companies to reduce overhead expenses and focus on core business activities. It also provides access to a larger pool of skilled professionals through extensive networks that leasing companies maintain, enabling quick and efficient filling of positions with qualified candidates. 

This model offers greater flexibility in workforce management, allowing companies to scale their workforce up or down based on project needs or market conditions without the long-term commitment of direct hires. 

When should companies consider staff leasing?

While staff leasing can offer various benefits, it’s essential to recognize that it may not suit every business situation. Different companies have unique needs and challenges, and what works for one might not work for another. However, there are some common indicators that suggest staff leasing could be advantageous:

Rapid Expansion: When a business is growing quickly and needs to scale its workforce without delay.

Project-Based Work: For companies that require specific expertise for short-term projects.

Cost Management: When looking to reduce operational costs related to HR functions.

Administrative Relief: For businesses that want to minimize the administrative load associated with managing employees.

How does staff leasing work?

Staff leasing functions through a systematic process designed to meet the specific needs of client companies. Initially, the client company assesses its workforce requirements and partners with a leasing agency that can provide the necessary talent.

The leasing agency then undertakes the recruitment and selection process, identifying candidates that fit the client’s criteria. Once selected, these employees are officially hired by the leasing agency but work for the client company, ensuring a seamless integration into the client’s operations. The partner then handles all employment-related administrative tasks, including onboarding, payroll, and benefits management.

In line with this, offshoring allows companies to lease employees from different geographical regions, often at a lower cost, while still accessing skilled professionals. This approach can significantly reduce operational expenses and provide a broader talent pool. Outsourcing staff leasing to specialized agencies means the client company can focus on core business activities while the agency manages the intricacies of HR functions. 

Staff leasing involves assessing workforce needs, partnering with a leasing agency, recruiting and selecting candidates, and managing ongoing HR functions. Offshoring and outsourcing can enhance this process by providing scalability, flexibility, and access to a broader talent pool.

Important considerations before leasing staff

Leasing staff is a significant decision that can greatly impact your business operations and growth. To make a wise and informed choice, it is crucial to consider several key factors. These considerations will help ensure that your staff leasing experience is beneficial and aligns with your company’s goals and values.

Choose the right provider: research and select a reputable staff leasing company with a proven track record. Look for reviews, testimonials, and case studies that demonstrate their reliability and expertise.

Understand the costs: clarify the fee structure and ensure it aligns with your budget. Understand all associated costs, including recruitment, onboarding, and ongoing management fees, to avoid any unexpected expenses.

Compliance and legal issues: ensure the provider complies with local labor laws and regulations. This includes understanding employment contracts, tax obligations, and workers’ rights to avoid legal complications.

Integration with company culture: consider how leased staff will fit into your company’s culture and work environment. Ensure the provider can supply candidates who align with your company’s values and work ethos, facilitating smooth integration and collaboration.

Frequently Asked Questions

• Who is the employer of leased staff?

The leasing agency is the official employer of leased staff, taking on responsibilities such as payroll, benefits, and compliance matters. This arrangement is also known as a Professional Employer Organization (PEO) or Employer of Record (EOR).

• How much does staff leasing cost?

Staff leasing costs vary based on factors such as the number of employees, the level of expertise required, and the specific services provided by the leasing agency. Generally, it is more cost-effective than traditional or onshore employment whereas professional leasing can start at an hourly rate of USD $10 to $20 in the Philippines. Additionally, employee leasing can be priced as a percent of payroll or as a flat fee, offering flexibility based on your business needs.

• Where do staff leasing providers typically operate?

Staff leasing providers operate globally, with significant offshored operations in regions like the Philippines, India, and Eastern Europe, where there is a high availability of skilled professionals at competitive rates.

How Reliasourcing helps with staff leasing

Reliasourcing’s staff leasing solutions empower businesses to thrive by offering access to top-tier global talent without the hassle of navigating international legal systems and employment regulations. Our strategic approach ensures that your company can focus on growth while we handle the complexities of global talent acquisition.

Our flexible staffing solutions are designed to adapt to your business’s evolving needs. Whether you’re facing seasonal fluctuations, market shifts, or project-specific demands, Reliasourcing provides the agility to scale your workforce seamlessly. This adaptability allows you to respond swiftly to changing conditions, ensuring that you maintain optimal operational efficiency and customer satisfaction.

Reliasourcing is committed to keeping your business at the forefront of technological advancements. This access not only streamlines your operations but also positions your company to anticipate market trends, drive innovation, and achieve sustained growth.

Staff leasing in a nutshell

Staff leasing is a strategic solution that allows businesses to optimize operations, reduce costs, and maintain high-quality standards. With the perfect service provider, companies can access a global pool of skilled professionals without the administrative burdens and expenses of direct employment. This model offers significant flexibility, allowing businesses to scale their workforce according to their needs, whether for rapid expansion, project-based work, or cost management.

Reliasourcing’s commitment to providing top-tier talent, advanced technology, and seamless integration into your business operations ensures that you stay competitive and agile in a dynamic market. 

Choose Reliasourcing for staff leasing and experience the benefits of a partner dedicated to enhancing your business’s flexibility, efficiency, and competitive edge.  For more information on how Reliasourcing can assist with your staff leasing needs, contact us today!