Body leasing, often seen as an alternative to outsourcing, is particularly popular in the IT sector. It allows IT staff to be quickly replenished without the need for time-consuming recruitment and the high costs associated with hiring a full-time employee. What is body leasing and when is it worth opting for it? Is body leasing a better solution than outsourcing?
What is body leasing?
Body leasing is often referred to as personnel outsourcing. It involves ‘hiring’ an employee of an external company (usually a software house) to a company to carry out specific IT work. A key factor in body leasing is the skills of the specialist. Typically, people with specific qualifications and experience are wanted, e.g. in Robotic Process Automation, Business Intelligence or website optimisation.
Often, body leasing proves to be a better solution than comprehensive outsourcing if highly specialised work needs to be carried out and there is no need to hire an entire software house for ongoing IT support for the entire company.
Who benefits from body leasing?
Body leasing is used by both small companies and large corporations. The former are most often interested in improving the functioning of a specific business aspect. Companies operating on an international scale may use body leasing as a temporary support for their IT department, e.g. during periods of increased workload related to data migration or software integration.
The popularity of body leasing in the IT sector is due to the fact that it is beneficial for both the software house and the IT professionals themselves. The software house can thus flexibly manage expenses at times when there are fewer projects and does not have to incur fixed employment costs. The professionals have more freedom and can seek out new challenges in the market in order to maintain a competitive edge in the form of constantly improving skills.
Body leasing vs outsourcing. The same, but different?
Body leasing is a type of outsourcing. The key difference between the two forms of cooperation is that in the first case, specific tasks related to the company’s IT are outsourced. Typical outsourcing, on the other hand, usually means the delegation of comprehensive IT services to another entity.
While outsourcing contracts are often concluded for a long period of time, even several years, a body leasing contract can be concluded for as little as a few days or weeks. Once the task is completed, the employee simply returns to the mother company, which issues an invoice for the service provided.
Body leasing and temporary work
The issue of temporary work is regulated by the Act of 9 July 2003 on the employment of temporary workers. It sets out the rules related to the employment of temporary workers by agencies acting as employers, as well as the rules for the referral of employees to work.
In the case of temporary work, three entities are referred to: the employee, the temporary work agency and the user employer. The latter entity assigns tasks to the worker and also controls their performance. The employee is bound by an employment relationship with the agency, while he performs his duties for and under the supervision of the user employer.
Body leasing and temporary work – differences
Body leasing is not the same as temporary work, although it must be acknowledged that the two models of cooperation are similar and it can sometimes be difficult to distinguish between them. The main difference between the two, however, is that temporary work is regulated by law, more specifically by the Act on the Employment of Temporary Employees.
The concept of body leasing, on the other hand, and the rights and obligations arising from its use are not specified in any legislation. This relationship of cooperation has not yet received a comprehensive treatment and is based on the principle of freedom of contract under the Civil Code.
The Act on the Employment of Temporary Employees also stipulates, among other things, that temporary work for one user employer can be performed for a total of 18 months in a period covering a consecutive 36-month period. Cooperation based on body leasing, on the other hand, has no such limitations. As it is not precisely regulated, it provides more freedom.
The most important difference, however, is that in the case of temporary work, the agency can only employ workers on the basis of an employment contract (and for a fixed period). In the case of body leasing used in the IT industry, we are most often dealing with employees understood very broadly, i.e. working under employment contracts (in accordance with the Labour Code) but also under any other civil law contract, including contracts for the provision of services in the B2B model.
What are the advantages of body leasing?
Leasing a worker offers a number of advantages for the company, both financially and in terms of the implementation of business processes. Why is it worth opting for body leasing?
For a company that decides on body leasing, the main advantage is the guarantee that it will receive an employee whose skills are matched to specific requirements. There is no risk of a mismatch between skills and position.
Body leasing makes it possible to fill staff shortages immediately, as opposed to a lengthy recruitment process. Recruitment can even take many months, especially when a company is looking for someone with specific qualifications and experience.
Personnel outsourcing also means savings. A company looking for a specialist does not waste time and resources recruiting on its own or using a headhunter agency. The software house takes on the responsibility of providing a person with the right qualifications.
The savings also lie in the fact that, for the duration of the cooperation, the specialist works for the client and performs his or her duties under his or her supervision, but no relationship like that of an employment relationship is created. For the customer, the form of employment of the IT specialist in question is irrelevant as he pays the invoice issued directly by the software house anyway. Even if several employees are outsourced, they are all covered by one invoice. Accounting in the B2B model is a much more advantageous solution for the company than a standard employment contract.
The amount that the company using body leasing pays for the service covers the salary of the specialists and the commission of the agency that makes their services available.
Flexibility and less risk of problems with access to staff
Body leasing facilitates the scalability of the business. The company can replenish or reduce the pool of specialists practically overnight to match current needs. As a result, it does not incur unnecessary costs while maintaining maximum productivity levels.
A body leasing contract also reduces the risk of unavailability of qualified staff. In the event of illness or indisposition of a professional for any other reason, the software house is obliged to provide a replacement at short notice (usually on pain of liability for a contractual penalty stipulated in the contract). This also reduces the risk of delays in project development.
Freeing up own IT resources
A company that opts for body leasing is able to focus its resources on other projects, thereby increasing the volume of orders it takes on and generating more revenue. The use of specialised staff also means that the range of orders handled can be expanded.
Disadvantages of body leasing
Can it be said that body leasing is an ideal solution? Unfortunately, no. First of all, the company using the help of specialists does not have control over the employees and, from a formal point of view, cannot give them binding instructions, because these people are still employed by the software house.
Sometimes, it can also turn out that a conflict of organisational cultures unnecessarily reduces the quality of the work done, as the outsourced employees do not always identify with the specifics of the company. In order to prevent a drop in productivity, more and more software houses are implementing the principle of culture fit, i.e. integration at the organisational level, in their business model. The more smoothly culture fit works, the greater the chance that specialists ‘delivered’ through body leasing will become part of a team whose members do not unnecessarily compete with each other.
Does body leasing always mean lower costs?
It is also worth remembering that the working time of a professional will generally cost more if it is short than if the cooperation lasts for a longer period. Therefore, body leasing is perfect as a tool to optimise the company’s efficiency and allow it to speed up projects, but it will not necessarily be a budget solution. It is also not a business model that will work best in the long term.
How to make body leasing effective?
The basis of a well-functioning body leasing is a well-structured body leasing contract. This is important both from the point of view of the ordering party and the company providing IT specialists. Precise identification of the rights, obligations and responsibilities of each party allows for effective cooperation and avoids the risk of litigation. When considering the use of body leasing, it is worth taking into account such aspects as:
- the company’s needs in terms of IT services – both current and in a specific time horizon;
- the scope and nature of the projects being carried out and the associated staffing requirements;
- the budget that the contracting authority is able to allocate to body leasing.
The decision to implement a specific model for handling IT projects should be preceded by a thorough analysis of the contracting authority’s needs and capabilities. It may turn out that in a given case body leasing will not be the best possible solution or will work only for a short period of time.
Linke Kulicki Law Firm specialises in providing legal services to entities operating in the IT sector. We prepare body leasing agreements for our clients and negotiate the terms and conditions of cooperation so as to secure the interests of the represented entity to the greatest possible extent. With the help of our lawyers, body leasing will become an effective and, above all, safe solution.