Leasing vs. Hiring

Hiring or leasing employees is like buying or leasing equipment. On one hand if you lease equipment that are intended to be used for a short time then it's always a bright decision that you lease them, on the other hand if you intend to use the equipment permanently in your business then buying them is sometimes the wiser decision.

But you have to be aware that these equipment are going to wear out and/or going to be obsolete. Therefore, you have to buy new ones to compensate the losses. If you lease equipment, you have wider options either you want to continue leasing or you want to update your machinery into something new and more efficient.

And the fast-paced global competition always make you do such things. It's like buying the latest model of a cellphone just to find out the next day that there's a newer model that came out.

Let's now talk about the advantages and disadvantages of both leasing and hiring employees.

Pros of Leasing

Lower Cost

If you are planning to put up a business or expand your small but highly profitable one, yet don't have the capital to hire people to work for you, then staff leasing is the best way to go. Believe it or not, a staff leasing firm is inexpensive and the most effective approach a newbie (or even a tycoon) entrepreneur could ever find today.

Why is this possible? Because the only money that you will have to take out from your pocket is the staff's monthly fee. You will never have to worry about the benefits, medical care, and all 'em employees' perks – the leasing firm will be the one to do that for you.

Time Efficient

Taking care of your business is a very tough job and taking care of your employees is even tougher. This is what a leasing company is all about: giving you all the luxury of time you could get and taking care of the tougher jobs of handling employees' concerns so that you can move forward to the more imperative matters such as expanding your business and finding new niches to market your product.

After all, Time = Money.

No Strings Attached

The fact that you lease people, you are guaranteed that you have no string's attached to your staff, whatsoever. You can keep them and you can let them go whenever you like, all the hassles are going to be well taken care of by the staff leasing company instead.

Responsibility Free

Have all the perks, drop all the commitments. You don't have to worry about maternity leaves, vacations and all alike. Everything is going to be well taken care by the staff leasing firm. If your staff has to take her maternity leave, don't fret because there are dozens of competitive substitute employees that the firm will offer you. You'll have your job done without worrying about less important matters.

They will always guarantee that you will get more than what you paid for.

Cons of Leasing

Transfer of Knowledge

Transfer of knowledge would be okay because of Internet. But having to deal with different time zones, you can't have on the spot instructions if your hired staff work by day time where you can see the moon in your place. Although, this can be solved by making your staff take the night shift, thus the need for graveyard fees.

You Can't Put a Leash If You Lease

Need I say more? If you lease staffs, you can't really see them perform. You just have to wait for their output everyday. You can monitor them, yes, but it's limited since they are working on the other side of the planet.

Also, if you have work preferences, you have to deal with how the firm runs its employees, you cannot always implement what you want, but you and the firm can always compensate.

Pros of Hiring

You're in Control

Proximity is not a problem since the people that you hired will work at your office and the transfer of instructions are immediately done. If you are the kind who would like to supervise your people to see if they are on the right track then the only way to do that is by hiring them and make them work beside you.

Commitments Tethered

If you are looking for long term and permanent employees then hiring is the solution for you. Your hired people would be loyal and you can always be sure that they will only work for you only. Thus, efficiency of work is always guaranteed.

Cons of Hiring

Costly

One word – salary. Many mouths to feed while the company is in the infant stage could lead to bankruptcy. If you are just starting the next big thing, you should be able to maximize your capital to more important things rather than breaking the bread into much smaller pieces (intended) for the excess staffs.

Also, if you have many employees in your office, then you should need to enhance and expand your equipment and facilities hence the need to hire more maintenance personnels and a bigger office.

These all mean more capital out of your pocket and longer time waiting for that ROI.

Reaps Reams of Responsibilities

Hiring people is not an easy task to do. Finding people to work for you and recruiting them is time consuming. You have to do what recruiters do – look for eligible applicants, interview them, give them tests and select a few who passed the requirements from a vast pool of the aspiring lot. Rather, You need to put up a recruitment department in your company to do the task for you. Then you have to do the same recruitment process for recruiting recruitment personnels.

Also, before you hire employees, you have to put up a human resource department that will take care of the employees' queries, their work schedules, resentments, company policies and benefits. In all of these hassles, you have to include an accounting department to take care of your employees' payroll.

All in all, leasing staffs could be the messianic business solution for starters and hiring employees is the second choice.

(If you have comments, suggestions and/or reactions regarding the contents of this newsletter, please feel free to send us your feedback here. We are looking forward to improve our monthly newsletter with your two cents worth. Thank you.)

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