Staff Leasing is usually done when a company wants to avoid the hassles of payroll, benefits, Risk management and Human Resource issues. Therefore, the company, often called as the ‘client’ company approaches a ‘leasing’ company which has an expertise in those areas.
In the process of Staff Leasing or Employee Leasing, a ‘Leasing’ company, based on an agreement and payment, places the employees of the ‘client’ company on its own payroll. Further, it leases these set of employees back to the original employer which is the client company. Even if new employees are hired, the client company can participate in the selection process, but the employees will officially belong to the leasing company.
It allows the client company to concentrate on their core business activities and significantly reduces its overhead costs.
Leasing companies generally handle employees from multiple organizations and are able to negotiate benefits and future health insurance in bulk. This basically gives the employee a much better deal financially as compared to belonging to the original employer, the client company. Further, under this arrangement, performance reviews and the wages come under the purview of the leasing company.
An example is that of Novartis Healthcare Pvt. Ltd, Hyderabad which uses the services of a leasing company called TeamLease.