What is staffing?
It is a contractual plan in which the leasing company, also
called the professional employers' organization or PEO, is the one that hires.
Generally, the business owner and the leasing company share job
responsibilities.
However, the business owner retains management control over
the work of the employees.
The leasing company assumes other responsibilities, such as
payroll and wage taxes. The business owner is answerable for writing a check
payable to the leasing company, which covers taxes, payroll, benefits, and
other costs.
The PEO takes care of the rest. Leasing works both in the
coordination of the parties and by mutual agreement, including the employees,
to rent. Therefore, transparency in all aspects of the recruitment process is
essential for all three parties involved.
Why the employer's lease
Here are some of the reasons an employer may hire staff
rather than directly:
Hiring costs are drastically reduced, helping HR focus on
critical issues. Depending on the type of job, some PEOs have a pool of trained
employees who may be available for work immediately. This will save you time
and speed up the process.
One of the serious aspects of managing taxes, payroll,
reports, etc. it is eliminated in employee leasing. These things not only cost
an organization, but are also resource intensive and involve multiple people to
get the job done.
Employers stand not required to have unemployment insurance
if there are no employees. Therefore, it will reduce the expenses of the
employers. In addition to unemployment insurance, there are many other expenses
that full-time employees must pay, including paid vacation, health insurance,
sick leave, etc. All these expenses are avoided if the employer decides to hire
staff.
In many cases, employees can make a profit, as the leasingcompany can group multiple employers. This can result in increased bargaining
power for many things, like insurance.
The PEO handles all the tasks, so you won't have to deal
with any administrative experience. The leasing agency can also help the
business with performance reviews.
Since the company needs the best talent, it must work with
the staff provider so that there is no compromise on it.
What are the risks of hiring staff?
Here are some of the risks associated with hiring staff:
The employer has no control over wages, so the hiring party
must ensure that there is no problem with the payment of wages. This is because
the employer does not deal with business administration. Therefore, if
something happens with the salary or if an employee receives an unsatisfactory
salary, it is the fault of the employer even if they do not take care of that
part of the employees.
The organization generally has no control over the benefits
offered to employees. In some cases, the organization may want to extend the
benefits it offers to its permanent employees to contract employees. But they
will not be able to do so due to contractual obligations to the PEO.
There will be a co-pay situation in some cases, and the
employer will take some responsibility for the employees. This means that even
if the PEO manages the administrative work, the employer will still have the
obligation to control certain aspects and verify the correctness so that there
are no problems with the administrative aspects.
In some cases, staffing organizations bring their employees
from other countries. Offshore employees may not work well with all companies.
While overseas employees can be inexpensive when it comes to working for
companies, they may not be relevant or practical for your type of work at all
times.
conclusion
Recruiting is a popular process in many industries and
startups as it is a time-saving method of securing employees.
While it has several advantages such as reduced costs,
reduced responsibilities, etc., there can be other disadvantages as well.
If an organization is considering using this approach,
proper research should be done before diving into the rental market.
