staff PEO

When a business needs workers on a project-specific or temporary basis, employee leasing companies in Florida supply these workers while paying their salaries and handling all HR administration associated with their employment. 

While the primary focus of employee leasing companies is to provide efficient HR services, they also operate as profit-driven enterprises. 

Understanding the Profit Model of Employee Leasing Companies in Florida 

Administrative Service Fees 

One of the primary ways employee leasing companies make money is through administrative service fees charged to client organizations. These fees cover the cost of managing HR functions, such as payroll processing, employee benefits administration, tax reporting, and workers’ compensation insurance.  

Service fees are typically a percentage of the client’s total payroll or a fixed employee fee. This revenue stream is essential for employee leasing companies, as it ensures a consistent income base. 

Economies of Scale 

Employee leasing companies in Florida leverage economies of scale to generate additional revenue. By pooling together multiple client organizations, they can negotiate better rates and discounts with various service providers. This includes obtaining competitive rates for employee benefits packages, insurance coverage, and retirement plans. 

The savings achieved through economies of scale are shared with the client organizations, while the employee leasing company retains a portion as profit. 

Risk Management and Workers’ Compensation 

Aside from their administrative and HR functions, some leasing companies in Florida manage workers’ compensation claims for their client organizations. By combining the employee population of multiple clients, employee leasing companies get more favorable rates with insurance providers.  

They then charge their clients a premium fee that accounts for the insurance cost, administrative overhead, and profit margin. Efficient risk management practices ensure that the revenue from workers’ compensation services remains a significant income source. 

Additional HR Services 

In addition to core HR functions, some employee leasing companies offer value-added services that generate additional revenue. These services may include recruitment and onboarding assistance, employee training and development programs, performance management systems, and HR consulting. 

By expanding their service offerings, employee leasing companies attract more clients and increase their revenue streams. 

Interest Income 

Employee leasing companies in Florida may earn interest from the funds held on behalf of their client organizations. Since these companies often manage payroll and benefits payments, they accumulate substantial money before disbursing it to employees and service providers.  

Strategically investing these funds allows employee leasing companies to earn interest income, further contributing to their overall profitability. 

Know More About Employee Leasing Companies in Florida 

Employee leasing companies in Florida operate as profit-driven entities while offering comprehensive HR services to their client organizations. They generate revenue through administrative service fees, economies of scale, risk management and workers’ compensation services, additional HR services, and interest income.  

By understanding the various sources of revenue, businesses can better comprehend the financial aspects of partnering with employee leasing companies and assess the value they provide. Talk to us to learn how we work and how we can help your business grow.