Body Leasing: what is it,for whom, and why?
It’s quite possible that you have come across the concept of body leasing, but never in practice – you’ve just heard of it. Perhaps you didn’t need it. But this may change any time as body leasing, or outsourcing of specialists, is becoming more and more popular. What is it exactly about? For whom? Why is it a good idea? All of this is discussed in the article below. Let’s go!
BODY LEASING: WHAT IS IT?
As I have already mentioned, it is also referred to as outsourcing of specialists. Other names are used, too: employee leasing or making employees available to a company for a specific time, as per the contract. Thanks to this arrangement, you can get valuable support literally overnight, which really counts in the case of projects with a very tight deadline.
Depending on the needs, this form of cooperation may last just a few days or even several months. Importantly – and this is true for the entire philosophy of outsourcing – when using body leasing, you make savings both in the economic and the organizational dimension. You acquire an experienced and reliable employee in the given field and you don’t hire him or her, which means you don’t have to carry out the whole painstaking and expensive recruitment process.Which, as it sometimes happens, is not guaranteed to provide you with a candidate that is perfect for the job. This solution is particularly popular in the IT sector, which is where j-labs operates.
An extended service is also available: team leasing. As the name suggests, instead of one person, you lease a whole team. You can build it to fit the client’s needs or use a ready one, composed of specialists from various areas. It’s best when team members are well-- coordinated and have worked together before. However, as different projects have different requirements, it’s difficult to outsource the same team in each case. In some situations, you need more software developers, in other cases, you will mostly need testers, and sometimes, a cross-functional team is what works best. There are lots of different scenarios, so there is no point in listing all of the possible variants; what’s important is that everything depends on what the project is like.
BODY LEASING: FOR WHOM? WHEN IS IT USEFUL? WHAT IS IT LIKE?
- Richness in synergy, or everyone wins
The benefits of body leasing can be illustrated with a number of examples. This is especially important in the case of software houses, i.e. companies that primarily engage in producing software. The fluctuations occurring in such organizations as to the number of projects may be handled by means of body leasing, the assumption being that some of the headcount (0–10%) are employed through outsourcing. This allows for flexibility in terms of the number of employees hired by the company. It’s also beneficial for the employees since, when working through an agent like that, they have access to various projects and organizational cultures. In a body leasing company, everyone can choose from among the available clients and projects. This produces a synergy and cooperation effect: the software house buffers the number of employees through its suppliers and the suppliers are able to ensure stability for their employees.
One example is j-labs, which provides specialists of various expertise and works with a large number of clients (currently, 40+), which guarantees active participation in many interesting projects. Sometimes, there are fears that becoming a part of this 10% of the headcount that is permanently assigned to software houses may end in no employment. There is no such risk. Quite the contrary: the agent (in this case, the employer) guarantees job stability specifically because of the fact that he works with several dozens of employees at the same time.
- When a specialist is needed here and now
Body leasing guarantees access to specialists in terms of new technologies. For instance if there’s a company that lacks experts in the given field because it is planning to develop a new project and that entails breaking unknown ground. In many cases, a new employee is acquired through recruitment. More often, however, this idea is ditched because of too many organizational, financial, and time related burdens. Body leasing works great here, also if you specialize in one technology, but have acquired a client with respect to another. If you want to continue working with that client, you should act quickly and add to the team a valuable employee that meets project requirements.
- How to look for an investor and not go bankrupt?
MVP, or a minimum viable product, is an initial version of the product which includes functions that are sufficient for the first clients to see what possibilities it offers. This prototype will be approved by investors only if they see that it actually works. Developing an MVP consumes time and money. If you have a permanent team, you need to maintain it, also when the software is ready and you are looking for an investor. Time goes by, there is no one ready to spend money on your project, and this means that your company’s financial situation is deteriorating. Morale goes down, atmosphere is not good. Instead of having to go through this scenario, you could consider outsourcing specialists: lease a team that will do the job for you. When they are done, the leased employees will go back to the supplier and you can start looking for an investor without having to worry about additional costs.
- Budgeting for projects, not FTEs
In many cases, the available budget is planned not for FTEs, but for a specific project. There is not point in going into details as to why things are like that, as there are a number of factors involved. Imagine a situation where there are plans to develop a new system, but not through FTEs or typical outsourcing since project implementation takes place outside of the company. Body leasing is the solution here: acquiring a specialist or specialists that will help you go ahead, remaining within the structure of your company for a time, but as leased, not regular, employees. One of the variations of this situation is the so-called hiring freeze, meaning a prohibition of hiring (e.g. in the given department) for a certain reason. In such a case, body leasing is often the only option for an employee to take part in interesting projects, offering his or her skills and experience.
- Try and hire: what is it about?
Try and hire (or try and buy) is a very interesting mechanism, both for the client and the employee. In other words: test before you hire. During the recruitment process, there is no chance to get to know someone in detail and see how they actually function. Even if you have selected someone really promising, you cannot rule out the possibility that when it comes to real work on a project, there might be disappointment. No one is going to give you back the money expended on the recruitment process, not to mention the time spent on the new employee’s induction.
Try and hire solves this problem, since the relationship between the employer and the employee is flexible and if something goes wrong, it’s easy to terminate. The idea is that the client leases an employee (or a team) from the supplier and may hire him or her, even as a regular employee, or send them back if the conclusion is that cooperation should not be continued. Someone could, quite legitimately, ask whether this mutual trying each other out could affect the stability of employment. Definitely not. This stability is guaranteed by the agent. And if there are gaps (stoppage) between projects, then, as it is the case at j-labs, 100% of remuneration is paid. This means that the company accepts full responsibility for its employees.
- No additional costs
In body leasing, the client pays for the time actually worked by the employee leased by the supplier. The leasing company covers all of the related costs: not only the remuneration, but other expenses, as well (e.g. the costs of the employee’s development). This can be described as payroll plus, as the body leasing company lifts the main burdens off from the client’s shoulders, which is particularly important if the client develops his business from the scratch or establishes a new branch. In addition to that, body leasing may be a form of a recruitment services that covers finding and hiring an employee. The benefits are immense, as the supplier not only offers the said payroll plus, but also guarantees the possibility of sending back the leased employee at any time during the agreed period of lease. There is no fixed-time guarantee of 3 or 6 months, like in the case of a recruitment agency.
What’s equally important is that there are no initial recruitment fees, which significantly improves the client’s cash flow. It’s easy to show with an example: we set up a start-up and employ 5 people. In the case of a recruitment agency, we would have to pay for each of the recruitment processes, generating quite substantial costs. Importantly, the client pays only for the work that is actually done. This means you have no obligations if the leased employee is sick, on holiday leave, or absent for another reason. The client pays for work alone, that’s all. He doesn’t have to worry about insurance or taxes.
BODY LEASING: WHAT ARE THE BENEFITS FOR EMPLOYEES? LET’S HAVE A LOOK AT J-LABS AS AN EXAMPLE
There are many various opinions about body leasing, including negative ones: that employees are, to put it colloquially, thrown around from place to place. However, from an employee’s point of view, things look differently, as thanks to working with various companies and on a number of projects, he or she can develop and acquire valuable experience, which will pay off in the future. What’s important is that he or she will find himself or herself in many organizational cultures, getting a broader perspective on things and and a richer CV.
- Thanks to working with start-ups, software houses, and corporations, j-labs offers a variety of organizational cultures and projects.
- At j-labs, you get support already at the stage of the recruitment process, since a candidate gets much more information than if he or she applied on their own. At j-labs, the recruiters represent the candidate’s interests, making sure that he or she gets valuable feedback.
- Technological support is equally important. Nobody is a know-it-all, and having meaningful feedback allows the candidate to realize where he or she needs to supplement their knowledge, be it before an interview at the client’s or right before starting work.
- At j-labs, there is always choice between projects and companies. The information about the place the candidate will be sent to is clear and specific. And this pattern repeats itself: after work with one organization is done, other options pop up. A meeting with a new client is not a typical recruitment process. Naturally, the candidate should present himself or herself as best as possible, but, at the same time, j-labs provides lots of support, for instance by indicating where to pay particular attention in the given situation.
- j-labs always guarantees stability of employment; even if the project is over, the supplier is responsible for making payments as per the agreement.
- j-labs goes for the professional development of its employees. There is a training budget that may be used in a discretionary fashion, e.g. in order for the employees to develop through training seminars. Nobody is interfering with he employee’s choices. For instance, if he or she is a Java developer, but wants to improve their knowledge of iOS, there’s absolutely no problem.
OBJECTIONS, THINGS UNSAID, STEREOTYPES: WHICH ARE THE MOST FREQUENT?
As is any area, with respect to body leasing, there are various objections, things unsaid, and even unfair opinions that have little in common with reality. There are quite a few of them and I’ll address the main ones.
- Some say that candidates should not work with an agent because since the company has a fixed budget for a specialist (for instance a software developer), then body leasing will allow it to pay less. This is completely false, as budgets for services (and body leasing is a service) are usually larger – we are talking more than just the costs of the salary alone. Anyway, which software developer, knowing the rates and the market situation, would agree to work for less money?
- There are companies that believe there is no point in using body leasing when building a team. Naturally, everyone is free to decide how their organization should develop, but it’s good to remember that from the point of view of the employee, it’s not the most important thing in the world whether he or she works under an employment contract, in the B2B model, as a freelancer, or whether they’ve come from j-labs. There is a project, there are goals, and that’s what matters.
- • Other issues are worth mentioning,too, especially those related to copyrights and similar elements. In all formal matters, an agreement may be reached, so that all doubts are cleared, e.g. as regards too many people on body leasing, which could affect the stability of project development. The same applies to dishonorable practices, such as taking over know-how. All of this can be secured.
To sum up, it’s worth remembering that every sector features various companies, better and worse, those that work diligently and those that do not go beyond the stage of promises, offering nothing in return. If you intend to cooperate on the basis of body leasing, always evaluate the things offered by the supplier, as these are the things you, as a client, actually pay for. Body leasing works great, which is confirmed by a number of companies. However, to maximize benefits, choose carefully and go for reputable suppliers.
BODY LEASING ADVANTAGES
- Simple accounting – one invoice.
- Only cost of working hours – time & material.
- Awareness in creation of our engineers career paths.
- Standarized engineer’s verification with PDA (Personal Development Assessment) at last once a year.
- Responsibility for the engineer on the j-labs side.
- Proven engineers available in short time.
- Engagement only for the project duration.
- Engineers with declared competences at declared time.
- Deep understanding of customer’s project requirements.
- Dedicated account manager for each engineer.
- Long-term relationships with our customers.
- Fully specialized recruitment team.
- Rich engineer’s CV database.
- Single-face contact (dedicated recruitment specialist to each candidate).
- Standarized enginerr’s technical verification.
Author: Piotr Bucki, Vice-President, CTO, j-labs