Research On The Employee Leasing In The Perspective Of Transaction Costs

Employee leasing is an innovation of employment, it is a different way from typical employ model to obtain and use the human resource. Specifically, it is a way that employee leasing company search employees in the market and store employees by the contract,then the enterprise sign with employee leasing company to rent the employees. It constitutes a kind of three sides contractual relations.Now, Employee leasing has become an mature industry in USA, Japan and Europe. As a new profession ,employee leasing is spring up in china and is becoming one of flexible strategys that enterprise usually use.Although employee leasing is developing quickly in china, the society have not know the " not typical model" very well. The existing research on employee leasing is mostly limited to concrete analysis of practical problems. Few people do research on the reason of how employee leasing appears and why it develops so quickly in theoretical perspective. The thesis uses Transaction Cost Theory to explain employee leasing, it is an innovation.Transaction Cost Theory originates from Coase. Enterprise is a economic organization to save market transaction cost, it is a substitute of market mechanism, Human factor(limited rationality, Opportunism) and transaction factor(The uncertainty of the market, The quantity of the latent transaction subjects, Assets specifility and Transaction frequency) together decide how big the transaction cost is. Assets specifility is the most principal variable of all factors, the higher Assets specifility,the higher market transaction cost and the lower inner transaction cost.Every enterprise have two choices in employment determination, one is to choose outstanding people by their own HR department and sign with them to be formal employee, the other is to rent people from employee leasing company in the market. The question of whether to hire by their own or to rent from market is the same one as the GHM enterprise model say about integraty boundary developed by (Grossman & Hart(1986),Hart & Moore(1990)).easily say, it is the question of weighing the inner transaction cost and market transaction cost and decide which one is lower. Integraty is the process in which relevent companys in production line combine to one company or a group. An enterprise doing HR job by itself could be viewed as an integraty of HR function. If inner transaction cost is lower than market transaction cost, this kind of integraty is efficient; otherwise, if inner transaction cost is higher than market transaction cost, employee leasing would be better.The thesis will put factors that influence transaction cost as viarables into GHM model. According to Assets Specifity and Match Efficiency, there are 8 cases in the model, the thesis contrasts the inner transaction cost with market transaction cost in every case and comes up with the results and some conclusions, finally, summarizes the problems in employee leasing industry in china and give the countermeasures and suggestions.The thesis uses many research methods ,such as:Firstly, norm research and evidence research. The thesis summarizes the problems in employee leasing industry in china and gives the countermeasures and suggestions. GHM model is the application of evidence research.Secondly, qualitative research and quantitative research. the thesis uses Assets specificity and the character of human resource to explain why the enterprise choose employee leasing, it is the application of qualitative research; then the GHM model research is the application of qualitative research.