3 Ways To Engage In Employee Leasing 

So you've decided that employee leasing is right for your Community Mental Health Organization—congratulations! That decision is the first step to saving money, increasing productivity, and coping with never-ending budget cuts.

But before you "officially" make the jump, you'll want to carefully consider what type of employee leasing provider you will partner with. As you know, Community Mental Health Organizations (CMHOs) are very specialized, and require expert insight and understanding to effectively handle the complexities that present themselves.

Below is a summary of the 3 major categories of companies that offer employee leasing services, including a discussion of the Pros, the Cons, and recommendations for your situation.

Category 1: General Employee Leasing Companies

The concept of employee leasing has been around for decades, and has become a mainstream option for HR managers since the late 1980s, when many US companies started working hard to cut costs and increase productivity. Nearly every industry engages in the practice, including government, manufacturing, construction, service businesses, trucking, and more. Many large, well-established firms service the marketplace; you will often see these companies referred to as PEOs—Professional Employer Organizations.

PROS: Experience, Cost Savings. Many of these companies—especially the larger, national providers—have outstanding systems in place for managing large numbers of employees. In many cases their sheer size allows them to negotiate excellent insurance rates with large carriers.

CONS: Lack Of Experience With CMHOs. Because of the nature of many CMHOs—quasi-government agencies that have traditionally had large budgets—employee leasing is very new to your industry. Most employee leasing providers have no experience in working with your situation, and are unequipped to handle the details and complexities that are associated—things like legal issues, time-keeping issues, mental health personnel issues, and so forth.

RECOMMENDATION: Not a good choice for CMHOs unless you can find a provider that has specific experience in this industry. You DO NOT want to be the proverbial "guinea pig" for them.

Category 2: Medical Staffing Organizations

Many organizations that have traditionally been involved in medical staffing have entered the employee leasing space in recent years. While this seems like a logical extension, in most cases, it actually IS NOT. While staffing is primarily focused on filling temporary or per diem positions for physicians, nurses, and technicians... employee leasing adds several important but unrelated human resource elements: time keeping, benefits management, legal management, employee discipline, and more. The result, unfortunately, has been a rash of medical staffing organizations that have overstated their qualifications and lack significant systems and processes for properly administering all of the necessary leasing functions.

PROS: Low Prices. In an effort to gain business, many medical staffing organizations have quickly built businesses that lack proper systems and processes. The result is a lower cost infrastructure that can be passed on to you, the customer.

CONS: Quality Control. The problems with this approach are significant and self-evident: without the proper background, experience, training, and detailed knowledge of HR-specific processes, clients are often left scrambling for key information, legal compliance, IRS compliance, and employee quality control. These problems stem from staffing organizations' inherent short term, per diem focus as opposed to the methodical, strategic planning mindset required for long-term success in the employee leasing industry.

RECOMMENDATION: Ask For References, Procedure Documents. Medical staffing organizations with these problems tend to be plagued with high turnover among their clients. Make sure you ask to speak with current clients (important: CMHO employee leasing clients, NOT per diem/staffing clients) who have been with them a minimum of 2 years. Find out what a company's contract renewal ratio is—anything under 80% is unacceptable. Additionally, make sure to check the potential partner's website; if it primarily focuses on per diem/staffing (and not employee leasing) that should serve as a red flag. Also make sure to see copies of current HR management protocol documents—you need to make sure they have them and use them.

Category 3: CMHO-Specific Employee Leasing Firms

There are a few firms that specialize in employee leasing for CMHOs. These firms were generally founded by physicians and administrators with CMHO backgrounds who have built their companies to address the complexities of the industry. These companies are typically NOT involved in per diem/staffing at all. Their core competency is employee leasing.

PROS: Experience, Systems. Firms that specialize in the industry will be able to show you their documented systems and protocols for dealing with everything from hiring to benefits management to legal issues to employee discipline and more.

CONS: Narrow Focus, Contracts Required. By nature, these companies only specialize in CMHOs, and tend to focus on larger organizations. In most cases, these employee leasing companies will require a minimum of $2.5 million in annual leased salaries and will require 3 year contract commitments.

RECOMMENDATION: Ask For References, Procedure Documentation. The same screening process should be used with CMHO-specific employee leasing companies as with staffing companies that offer employee leasing as a side service: Insist on speaking with current employee leasing companies that have been partners for at least 2 years. Ask to see copies of their procedure & protocol documents, and find out what their contract renewal ratio is (again, anything under 80% is unacceptable.)


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ActionMed Personnel
101 Preston Court
Macon, Georgia 31210
Main Line 478.330.5742