Getting employee leasing quotes for your HR needs

Written by ShawnTe Pierce

Small business owners often have to wear many hats to run their business. One of those “hats” concerns administrative tasks, the most important of which is human resources. Employee leasing can help your business with your HR processes. However, there are different models and employee leasing quotes to consider before choosing the best fit for you.

What is employee leasing?

Employee leasing is a service arrangement in which a business contracts a third party to take over its human resources or workforce administrative duties. Some arrangements have the employee leasing provider as the employer of record for the client's existing employees and have it take over the hiring of new ones. In other arrangements, the provider is contracted to take over payroll, benefits, and worker's compensation duties.

Employee leasing operations

Three models of employee leasing operations exist:

1. Administrative services organization (ASO)
2. Human resources organization (HRO)
3. Professional employer organization (PEO)

Each model provides different levels of employee leasing operations services. Consider your specific business needs to determine which model fits your administrative needs.

Choose based on primary needs

PEOs are the most comprehensive of the employee leasing models. These companies are state-regulated, have to be licensed and are liable for all compliance, taxes, and other government regulations. The PEO acts as the employer of record. ASOs and HROs are not as regulated and therefore carry less liability. In fact, you’ll be responsible for any errors they make in processing.

Each employee operations model has its pros and cons based upon what is most important to you. If cost and control are your primary concerns, then the services provided by an ASO or a HRO may be more ideal. However, if cost is not really a concern and service and accountability is more of value to your business needs, then the full service PEO model may benefit your business more.

Employee leasing price quotes

Employee leasing quotes are typical for all models with the exceptions of up-front fees. ASOs and HROs typically don’t charge up-front fees: they tend to resemble more of a pay-as-you-go system. PEOs charge a one-time setup fee at contract signing, usually from ,000-,000.

Employee leasing quotes are given as percentages, with most charging on a per service basis that typically lies between 2% and 6% of the total gross employee payroll.

Worker's compensation services cost 1% to 10%; most ASOs and HROs follow this pricing model. Since PEOs offer more services, they often provide bundled packages that cost between 12% to 15% of the gross payroll.

To get connected to employee leasing companies, use BuyerZone’s free request for quotes service. We’ll connect you to multiple providers who will help you find employee leasing quotes that fit your budget and business objectives.