Hiring an employee isn’t as simple as just posting job vacancies. It is a long-term commitment of choosing the best candidate for the continued success of the company.
Even hiring a freelancer is not a good option since they work on their own terms and usually take different projects from several clients.
Well, if you’re really interested in a less hassle and time consuming job hiring process, the staff leasing is the solution you’re looking for!
Staff Leasing
Staff leasing, also known as employee leasing, is an outsourcing model where you subcontract employees through a Professional Employer Organization (PEO) or Employer of Record (EOR). It allows you to manage your staff directly while the PEO handles the administrative matters such as payroll and other HR administrative tasks.
How Staff Leasing Works
To get started with the staff leasing process, you should choose a reliable staff leasing provider and provide them with the job description, qualifications, and other relevant information about the employee you want to be part of your team.
Based on the information you provided, your service provider will assess and select candidates that fit your team. You will then have the opportunity to interview them and decide on who to hire.
Moreover, the payroll, admin work, and compliance will be taken care of by your service provider to ensure the smooth integration of your employees into your operation. Aside from these responsibilities, you may also check if your provider can train your employee. By training your employees, it could have a positive impact on your company.
Factors to Consider for Staff Leasing
If you’re having second thoughts about staff leasing, here are the following factors you might consider:
New in Business Industry
Staff leasing is a good option when you’re entering a new market as compared to immediately setting up a new business entity. Setting up a new company will cost you more when you only have a few staff in the beginning. The maintenance fees induced in setting up a new company might be better used and paid to a subcontracting company, particularly a PEO company and the savings can be used to grow the company.
Foreign Company
If you do not have a company in the Philippines, searching candidates through various job search online platforms like Jobstreet, Linkedin, Glassdoor and Indeed and posting job advertisements on your social media accounts might not be the ideal way to scout talents. These talents may not want to work for you if you have no presence in the Philippines. Likewise, setting up a new company to support a minimum staff will not be the best use of your time and money. Administrative tasks like recruitment, maintaining, and training offshore team members also require a lot of time and energy, leaving you with little time for other tasks.
Alternatively, hiring a reliable staff leasing company or offshore firm will enable you to tap into a larger pool of top talents who fit into your organization. Having a staff leasing company to handle the hiring of highly skilled talents and other administrative tasks allows you to save time and focus on your core business. You also reduce security and liability risk associated with directly hiring talents.
Costs
To give you an idea of how much it costs to set up a company, please see the table below:
| One time Set up | Yearly Recurring | |
|---|---|---|
|
SEC, Business Permit, BIR Registration, Statutories |
₱183,500.00 |
|
|
Estimated government Expenses (Assuming of 1M Autorized Capital) |
₱50,000.00 |
|
|
Accounting fees (Php 25,000 per month * 12 months) |
|
₱336,000.00 |
|
Audit assistance |
|
₱16,800.00 |
|
Audited Financial Statement |
|
₱28,000.00 |
|
Business Permit Registration |
|
₱19,600.00 |
|
Business Permit registration government fees |
|
₱20,000.00 |
|
BIR Annual Registration Fee (1st yr included in set-up fee) |
|
₱500.00 |
|
Virtual office (Php 2,000/month * 12 months) |
|
₱24,000.00 |
|
Payroll fees for the first 10 employees
(Php 10,000/month * 12 months) |
|
₱120,000.00 |
In the succeeding years, these will be the following maintenance costs:
| Services | Monthly | Yearly |
|---|---|---|
|
Accounting fees (Non-Operating)* |
₱5,500.00 |
₱66,000.00 |
|
Accounting fees (Operating)* |
₱25,000.00 |
₱300,000.00 |
|
Nominee Fee (1 position – Staff) |
₱2,500.00 |
₱30,000.00 |
|
Audit Fee (Operating)* |
|
₱40,000.00 |
|
Retained Legal Fees** |
₱10,000.00 |
₱120,000.00 |
|
Business Permit professional fee |
|
₱17,500.00 |
|
Payroll fees for the first 10 employees |
₱10,000.00 |
₱120,000.00 |
|
|
|
₱693,500.00 |
If you hire talent via staff leasing, you do away with these setup and recurring costs.
Important Notes:
- The cost herein does not include the salaries of staff and other reportorial requirements per government agencies.
- Business Permit expenses (based on gross receipts more or less 1.75%-2%).
- The fees may vary depending on the type of your business and may change throughout the year.
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Benefits of Staff Leasing
Staff leasing is the ideal solution in resolving manpower issues without adding to the weight to your admin and HR. It also has several benefits to you and your business:
Save Operational Costs
Staff leasing reduces the costs for operations since you can save expenses for office space and equipment, utility bills, and such. Expenses for labor costs, such as employee’s salary, training, and benefits will significantly reduce especially if you outsource from an area with lower labor costs. With all your savings made from these, you can invest the amount you were supposed to spend on other business operations.
Flexibility and Control
Recruiting and hiring employees can sound like a burden especially if you have other tasks that need to be done immediately. However, it is something you should take seriously since your company’s future is in the hands of your employees. Therefore, choosing the best candidate is crucial.
Staff leasing can lighten up this burden and give you time to prioritize your tasks while ensuring that you will hire a candidate that fits in your team and company’s goals. With this outsourcing model, the hassle of administrative work is also being taken off your shoulders without removing your control over your team’s performance and productivity.
Expand Market Reach
By staff leasing, it can potentially establish your presence in other areas for a bigger market reach. Hiring employees from a specific location gives you an opportunity to open up a new market or help you deliver better services to your target market. Additionally, you can cater to a wide range of clients, investors, and partnerships with your team working on a shifting schedule. However, you may face challenges relating to differences in time zones, culture, and language barriers
Looking for experts to help you simplify your workforce? Book a consultation at TeleHR Solutions today! Call us at +63 917 892 2337 (mobile) or +63 284 785 826 (landline), or email us at [email protected].