4 Advantages To Outsourcing Payroll Services Rather Than Leasing Employees

Are you sick of running your employee payroll? Usually you have two major options: you can outsource your payroll services to a company like A & C Accounting & Tax that specializes in payroll or you can just lease your employees outright through an employee leasing program. Though either option will let you avoid wading through paperwork, outsourcing your payroll is usually the better option.

1. You Can Get a Better Quality of Labor

When you lease employees, a significant portion of your payments go through the leasing company. By simply outsourcing your payroll and hiring your employees directly, you can instead offer competitive salary and benefits to attract both a better quality of labor and keep employees happier.

2. You Have More Freedom Regarding Hiring and Firing

Though you will still retain the freedom to "fire" leased employees at will, all decisions need to go through the leasing company -- including complaints. This may not give you the freedom that you desire. You need to hire from a pool of candidates that the leased company keeps on staff, and this could potentially be unsuitable for companies that need more specific labor or want to hire prime candidates that might have already been snatched up by competitors.

3. You Can Take More Tax Breaks

When you lease employees you aren't paying for payroll taxes, insurance payments or anything -- you're just paying a straight fee to lease employees. While this does simplify your books, it also means that you don't have as much flexibility when you complete your taxes, because you don't have actual employees on payroll. For smaller businesses, this could be significant. Many tax benefits are calculated based on the amount of employees you actually have; as in, the amount of jobs that you create.

4. You Create a Better Atmosphere

Employees know when they aren't working directly for your company and they may be hesitant to gain a feel for the company culture if they feel either temporary or disposable. It's better to work with employees that know that they are a part of the business and that their success is the company's success.

There are situations in which employee leasing can make sense. Temporary departments or temporary staff members are often more easily leased, and companies that expect that they will be rapidly growing (or erratically growing) might appreciate the flexibility that leasing provides. Still, outsourcing payroll is usually better for most companies in general because it still affords a modicum of control.