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The Need For Employee Leasing For Small Businesses

Aug 17, 2007
While running a small business, the entrepreneur is often confronted with the issue of managing limited resources to generate the desired outcome, in terms of both quantity and quality. The dire need to expand and at the same time cope with expenses eventually becomes a difficult task for even the most talented individual. Increasing initial expenses and diverse market requisitions impose a sustainability issue on the small-scale businesses. The small business owner must look for ways to cut costs and plan the expense structure, to keep the fixed cost at a minimal level. The market requirements are unpredictable and in such situations, it makes no sense to deploy dedicated resources for the output.

All About Employee Leasing
To cater to the immediate demand and at the same time save on the long-term obligations, employers are looking to employee leasing as a solution. Employee leasing refers to hiring out employees for a specific purpose. The leasing contract outlays the exact job description and the duration of employment along with payment terms. Employee leasing serves as a valuable option, especially if specialized resources are required for a small duration.

Employee leasing has been getting a lot of positive reviews recently. It renders the regular employer benefits and saves time in employee training. It lacks associated administrative hassles and has the ease to expand with limited resources in a short run.

However, the other side to this interesting proposition is the corresponding risk factor. Many employers feel that these temporary employees could affect the overall culture and might impose risk by being a potential threat to the important insider information. The solution then is, to pre-specify the access permitted to the contractual employees while working with the firm. This segregates the important information and maintains the focus on the key task allotted. Moreover, various professional firms providing such a temporary work force are willing to enter into legally enforceable contracts regarding the organization's information confidentiality, thus curbing the scope of information mismanagement.

Leasing And Outsourcing
A common misperception among various recruiters and employers is the perceived similarity between leasing and outsourcing. Many tend to think that they are implicitly the same concepts. However, it must be noted that there is a thin line of difference between the two notions. Outsourcing implies getting the job done from a third party at their workstation or on your premises, while leasing refers to hiring employees or professionals for a pre-defined time duration. For this defined duration, these workers act as company employees and fulfill the outlined job requirements as directed. The appointed contractual employees have direct employee rights and share the company's success and failures, as do other regular employees.
About the Author
David Gass is President of Business Credit Services, Inc. His company publishes a free weekly e-newsletter on Small Business Consulting at their web site http://www.smallbusinessconsulting.com
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