What are leased employees?

Leased employees are people who receive compensation from a staffing agency to perform work for a recipient company. Recipient companies generally bring in leased employees to fulfill a temporary position or complete a specific project.

Who is the employer of a leased employee?   

Leasing agencies, not recipient companies, typically employ leased employees and provide them with salaries and benefits. Leasing agencies often hire skilled people to work for recipient companies in industries such as

  • Health care
  • Finance
  • Consultancy
  • Real Estate
  • Law

Employee leasing vs. co-employment

In employee leasing, a staffing agency provides your business with people and manages their HR admin work. Co-employment, also known as PEO (Professional Employment Organization), implies collaborative employment. For example, PEOs may handle HR admin while your company manages recruitment and hiring. 

Depending on the co-employment agreement, companies can split the responsibilities differently. However, to make things more confusing, because co-employment has evolved from employee leasing, in some US states, the terms employee leasing and co-employment are used interchangeably.

When should employee leasing be used?

Large and small companies can rely on leased employees when they need to hire seasonally, handle specific projects, or lack the resources for proper recruitment and admin work.  

Why should HR leaders care about leased employees?

Employee leasing enables companies to recruit and hire faster for increased productivity and efficiency. With access to many qualified people and expertise in placing them, staffing agencies can match skilled individuals with vacant positions while shouldering the HR admin burden.

Benefits of leased employees

Using a quality leasing company can:

  • Improve time to fill
  • Streamline and improve recruitment and hiring  
  • Offer high-performance work for a temporary period

What can HR leaders do to incorporate leased employees into their teams successfully?

To facilitate a smooth employee leasing experience for you and your people:

  • Evaluate company needs. Conduct a needs assessment to determine the duties and positions you want the leased employees to fulfill and the admin work you need the agency to take care of. 
  • Comply with the laws. Employee leasing laws are complex. Hiring an employment lawyer can help guarantee compliance with state and federal laws.
  • Do your research. To ensure you collaborate with a top-of-the-line leasing firm, make sure it’s reputable and licensed.  
  • Ensure employees know the policies. In addition to running an effective onboarding process, include a section in the employee handbook for leased employees that explains their and your obligations regarding benefits, payroll, retirement, company culture, and proper workplace conduct. 
  • Treat everyone equally. To help leased employees feel valued and part of the team, treat them the same as everyone else by building a relationship with them, addressing their needs, and providing them with fair work conditions.

Why should leased employees be part of the modern HR strategy?

Including leased employees in the HR strategy contributes to agility–a must in today’s dynamic world of work. The ability to seamlessly include leased employees in teams throughout the organization enables HR and the company to maintain productivity, even amidst fluctuating workplace trends and business needs.