Unlike purchasing departments or accountants, HR professionals must be able to do more than just negotiate the best price for an alternative staffing solution. They must be able to compare quantitatively the costs of completely different staffing arrangements, taking into account direct and indirect costs and operational concerns, while factoring in supervision and control issues as well as potential legal liability under each option. For example, once HR decides to use a PEO such as an employee leasing firm, the cost negotiations are fairly circumscribed. But deciding whether to go the PEO route, which PEO to use, and how that decision affects overall benefits administration and staffing clearly falls in HR's bailiwick. There are legal implications in both the relationship with the staffing firm and the relationship with temporary employees working at the company's site.
Potential liability varies enormously depending on the nature of the staffing arrangement.
A developing legal doctrine, sometimes referred to as co-employment, summarizes the legal relationship, rights and obligations in some alternative staffing arrangements. In traditional temporary help models, the staffing firm and its client are likely to be viewed as co-employers, or joint employers, under most employment laws. But the further the relationship departs from that model, the more difficult it becomes to determine whether or not a co-employment relationship exists. For example, in a true outsourcing relationship, courts may view only the staffing firm as the employer obligated to comply with the employment laws. But in some cases, the client company alone may be liable for a legally invalid staffing relationship.