What is Employee Leasing? Find Out the Advantages and Disadvantages

Temporary employment agencies have been operating on the Polish market for years, yet concepts such as employee leasing are still unclear to many employers. Contrary to appearances, employee leasing does not have to mean only temporary work. If you are looking for an employee and need to fill a position quickly, find out more about the beneficial forms of employment other than a standard employment contract.

Temporary employment agencies – specialists in employee leasing

Many employers associate a staffing agency exclusively with hiring workers on a fixed-term basis, and many still don't know what advantages employee leasing offers for long-term projects or ongoing cooperation without the need for continuous recruitment. Employee leasing is a form of service outsourcing that is winning the hearts of employers in Poland thanks to a long list of real benefits for business owners. It is a way to quickly and effectively acquire an employee without expensive recruitment processes. It is also a good alternative to a standard employment contract, which during a crisis is not always the best solution from the employer's perspective. Cooperation with an agency and well-negotiated contract terms provide more flexible business management and control over headcount, even during lockdowns.

Who is the user-employer?

To understand the essence of employee leasing, it is necessary to explain how it works. It is a specific form of cooperation between three parties: the employment agency, the employee, and the user-employer – i.e. the company seeking workers. The employee leasing agreement concerns these parties. Importantly, the agreement involves providing the service of performing work at a given position, not hiring a specific individual. This represents a kind of guarantee of continuity of work at a given position, even if a particular employee leaves your company for any reason. The agency is then obliged to provide another candidate, and your business will not suffer losses due to a lack of workforce.

Most importantly, this type of agreement completely modifies the relationship between employee and employer, because the actual role of employer is played by the agency, not your company. This is the greatest advantage of leasing, as you are no longer concerned with any matters related to recruitment, employment or employment contracts. You free yourself from a whole list of costs and tasks for your HR and payroll department, and the obligations imposed by labour law on the formal employer no longer apply to you.

What are the advantages of employee leasing?

Running a business is not just about hiring employees; it also involves a range of tasks related to planning and executing the company's strategy. It is much easier to achieve your goals if you can efficiently delegate work to individuals and companies. An employment agency greatly streamlines this process. With its help, you acquire a work-ready employee without being the actual employer. Without signing a permanent employment contract with the worker, you avoid topics such as employee leave, costs of work clothes, medical examinations, initial OHS training, and reporting employees to the Social Insurance Institution (ZUS). If you manage a large team, the need to hire new employees arises fairly often. Employee leasing of yet another person will only reduce your list of costs.

Employee leasing and hiring foreigners

It is worth mentioning that the scope of services provided by an employment agency is not limited to sourcing workers from Poland. Leasing is also an excellent solution for foreign workers, as it helps to avoid the numerous formalities required to employ a foreigner. If you are looking for workers from Ukraine, Russia, Belarus, Georgia, Armenia or Moldova, simplified formalities apply, allowing you to employ a worker for six months out of 12 months based on a single declaration. If you need someone on a permanent basis, obtaining a work permit will still be necessary. Workers from Asia, on the other hand, are subject to standard procedures that can take months. Before the appropriate permits are obtained, your candidate may change their mind, and you will have to start the whole process from scratch. In such cases, check whether it is worth handling this yourself. With the help of an agency, you save time and money without having to deal with the bureaucracy.

Disadvantages of employee leasing

Like every coin, employee leasing has two sides, though in most cases the disadvantages can be effectively managed through prudent human resource management. It is common to expect a divide between agency and permanent employees, where the former are perceived as inferior. Employee leasing may also mean higher staff turnover, which is not desirable in every company and industry. The protection of confidential information, to which temporary workers should be given only very careful access, is also a relevant consideration.

Employee leasing will not work well in positions where stability with regard to the people employed is important, for example in sales departments where key clients have dedicated advisors. In such cases, staff turnover would affect the company's image. However, companies in manufacturing, where the key thing is the result of the work performed and candidates do not have direct contact with clients or contractors, can freely use employee leasing.