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Employee leasing is a form of employee management services, where firms engaged in employee leasing assume and establish an employment relationship with the worksite employee on one hand and provides a complete human resource management service to the client company on the other hand. These firms are referred to as PEO's or Professional Employer Organizations.

Employee leasing is very popular now-a-days. In the United States employee leasing is growing at a rate of 30% per year, with some 10 million employees being leased. Clients normally enter leasing arrangements because they need to focus on core business activities such as production, marketing and sales. These areas may require complete management attention for them to carry out their proposed business objectives and plans.

Employee leasing will help employers (Client Companies of the PEO) to easily take care of employee concerns. Background checks and other hiring services can be done through the Professional Employer Organization, which saves time, expense, and trouble for the employer. They can get expert advice on legal law related to employer-employee relationships. The PEO will help them to avail cost effective human resource programs and services, provide for employee training and assist in implementing a web-based payroll processing system. The average cost for a company in the United State is nearly $1,000 in HR expenditure for every employee. HR costs are often not understood or underestimated because many of the costs are hidden or indirect. An employer who chooses to take up employee leasing services will get expertise on this and can avail benefits of lower worker's compensation rates, unemployment compensation rates and insurance costs.

Employers who take up employee leasing services stand to gain through improved cost control on human resources expenses. Professional Employer Organizations provide quality benefits to employees and give the best recruiting assistance. This way existing employees are retained and the best talents get attracted to the organization. On the whole, through such benefits, employers see a reduction in employee turnover.

Employee leasing is an important human resources alternate that an employer should consider as it offers significant advantages in terms of cost and employee management.

About the Author

Catherine Joesph - Employee Leasing Benefits