Blog 06.11.2023

What is employee leasing? Find out the advantages and disadvantages

Although temporary work agencies have been operating on the Polish market for years, not every employer is familiar with concepts such as employee leasing, which, contrary to appearances, does not have to mean only temporary work. If you are looking for an employee for your company and you are keen to fill a position efficiently, it is essential to find out more about favourable forms of employment other than the classic employment contract.

Temporary employment agencies, or staff leasing specialists

Not one employer associates an employment agency only with the acquisition of a temporary employee, and still many are unaware of the advantages of employee leasing also in terms of implementing projects that extend over time or even have the character of permanent cooperation without the need for constant recruitment. This is because employee leasing is a form of outsourcing of services that is successfully winning the hearts of employers in Poland, due to the long list of real benefits gained by business owners. It is a way to quickly and effectively acquire an employee without carrying out costly recruitment processes. It is also a good alternative to a standard employment contract, which in times of crisis is not always the best solution from the employer’s point of view. Working with an agency and having well-negotiated contract terms gives you more flexibility to run your business and control the number of employees, even during lockdowns. However, before going on to list the advantages of employee leasing, let’s start with the basics and who the contract is between in this case.

Who is the employer-user?

It may sound strange, but in order to grasp the essence of employee leasing, it is necessary to explain what it actually consists in. This is because it is a specific form of cooperation between three parties, which become the employment agency, the employee and the aforementioned employer-user, i.e. the companies looking for employees. It is these entities that the employee leasing agreement concerns. Importantly, the service provided to the user-employer is that of carrying out the work in a given position, rather than obtaining a specific person for the job. This means that there is a vague guarantee of continuity in the position, even if, for whatever reason, the employee in question leaves your company. It will then be the agency’s responsibility to organise the next candidate and your company will not experience a loss due to a shortage of manpower.

However, the most significant fact seems to be that in this type of contract the relationship between employee and employer is completely modified, as the actual role of the employer is played by the agency and not by your company. This is precisely the greatest advantage of leasing, because you are no longer concerned with all the issues of recruitment, employment and the employment contract. You thus get rid of a whole list of costs and tasks to be carried out by your HR and human resources department, but you are also not affected by the obligations that, under employment law, are incumbent on the formal employer.

What are the advantages of employee leasing?

Running a company is not only about hiring employees, but also about a range of work related to planning and implementing the company’s strategy. It is much easier to realise pre-set goals if you manage to delegate work to individuals and companies efficiently in each case. An employment agency greatly facilitates this process. With its help, you acquire a work-ready employee without the actual employer being on site. By not having to sign a full-time contract with the employee, you are spared the topics of the employee’s holidays, the cost of work clothes, medical examinations, usually also initial health and safety training or reporting the employee to the Social Insurance Office. If you manage a large team, then the need to hire new employees arises quite often. Thus, employee leasing another person to work with will only reduce the list of costs.

Employee leasing and the employment of foreigners

It is worth mentioning here that the scope of services provided by an employment agency is not limited to assistance in attracting workers from Poland. Leasing is also a great solution in the case of employees from abroad, as it helps to significantly avoid the numerous formalities required to employ a foreigner. If you are looking for workers from Ukraine, Russia, Belarus, Georgia, Armenia or Moldova – you will be subject to simplified formalities with the authorities, so that you can employ an employee for six months within 12 months with a single declaration. If you are looking for someone on a permanent basis, you will still need to obtain a work permit. Asian workers on the other hand, involve standard procedures that can take months. By the time you get the relevant approvals, your candidate may have wandered off during this time and you will be starting the whole process from scratch. In such cases, check whether it is worth dealing with it yourself. With the help of an agency, you will gain time and money without having to run around the authorities.

Disadvantages of employee leasing

Just as every stick has two ends, employee leasing also has disadvantages, which, however, can in most cases be effectively managed by prudent human resources management. This is because it is often to be expected that there will be a division between agency and full-time employees, where the former are seen as inferior. Importantly, leasing can mean greater staff turnover, which is not desirable in every company or industry. The protection of confidential information, to which agency workers should be very cautious, is also not insignificant.

Employee leasing would not work well in positions where stability in relation to employees is important, such as in sales departments where key customers have dedicated advisors. In such cases, employee turnover would affect the company’s image. However, employee leasing can be freely used by production companies, where the most important thing is the result of the work done, and job candidates do not have direct contact with clients or contractors.

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