This is Why the Global PEO Model Works
Recruiting employees, managing HR tasks, and enduring legal and payroll tax compliance are part of the major impediments facing many companies today. Employers intending to expand abroad are also faced with these obstacles. Although there are several options and solutions that organizations can leverage on, we will be guiding you through the efficiency of PEO in this guide, we will open you up to global PEO meaning, the difference between PEO and global/international PEO, the pros and cons of this solution, PEO business model, benefits and responsibilities of this solution and who can use the solution.
A professional employer organization (PEO) is an organization that supports another organization/company in managing workers’ HR tasks, set up and calculate worker’s payroll tax, hire talents for the organization, and ensure optimum compliance. PEOs are used in the US for these purposes, and it is also used as an employee organization or co-employer. However, while expanding/ working overseas, international PEOs are utilized. This kind of PEOs provide global services by helping companies to ensure foreign compliance, foreign talents recruitment, human resources management, risk mitigation, etc
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What is an International Professional Employer Organization?
When you are faced with hiring employees, managing HR tasks, or ensuring compliance for your business overseas, you need to engage the activities of Global PEOs. So, what is an international professional employer organization? International PEO which is also referred to as global PEO is an international organization that carries out employment activities, payroll responsibilities, disbursement of benefits, and other human resource obligations overseas. They serve as the company’s employer of its talents in other countries and provides employer of record solutions for the company. Unlike the conventional PEO in the US that simply employ workers and manage the employees’ taxes, global PEO stands out in going global, mitigating risk, ensuring compliance, fastening employees’ hiring and payment process, etc. the meaning of global PEO comprises their services as an employer of record and human resources management. International PEO does not work in just a country like the conventional PEO, but they help companies in expanding globally and hire talents in the shortest possible time without establishing a local branch there.
How do Global PEOs carry out their activities?
There are several employment organizations in the world today providing similar and slightly different services. To make the right decision for your business, you need to understand the generic pattern of global PEO activities. This understanding will help your company in determining the services that are right for you, the extent of the service, etc. Global PEO offers broader services than conventional PEO and other employment organizations which will you in overcoming human resources problems in foreign markets. These are some of the services provided by international PEO:
- Tax and payroll management
International professional employer organization provides tax and payroll management for companies abroad within local regulations. They help companies in calculating, withholding, and remitting employees’ taxes to the foreign country tax agencies. They ensure that your workers are paid rightly, timely, and compliantly. Through Global PEO’s team of professionals, your workers are assured of correct and updated deductions. They also protect your company against government audits, non-compliance, and other violations. Since PEO’s are the legal employer of your worker, they have safeguarded you from potential risks associated with tax payroll penalties.
- Statutory Compliance
Establishing your business overseas requires you to learn, understands, master and observe all rules and regulation binding your activities. You will need to stay compliant in dealing with employees, carrying out business, establishing a local subsidiary, etc. you can go through all these processes of establishment alone during expansion but then, the time and cost might be too great for you. Apart from the time and cost factors, you are unbearable to violating some of the regulations due to regular updates, charge in governance, or the volume of the law.
However, through the Global PEO solution and already established presence in 150+ countries all over the world, you can be sure of compliance in carrying out your business. They provide you with insights and protection principles against associated risks. When you partner with an international PEO, you don’t need to establish a local subsidiary or master the legal obligations. They help you stay compliant with issues regarding tax contractors, laws, employees’ benefits, payroll, local subsidiary, etc.
- Workers’ Benefits
One of the major problems most companies face during international expansion is keeping up with providing their workers with the right benefits and compensations. The benefits in which employees are eligible to differ from country to country, so it’s difficult for most companies to keep up. Thanks to international PEO update themselves with employees’ rightful benefits and ensure proper administering of these compensations to the employees.
- HR Tasks
Global PEO offers you extended human resources solutions in setting up employment contracts. They assist you in developing work policies in differentiating employees from independent contractors. They coordinate talent recruitment, termination, and compliance.
International PEO contributions to Businesses?
After considering the fascinating services in which international PEO offers, companies will always want to know how these services will help in boosting their businesses. There are several ways in which a global PEO can contribute to the growth and expansion of your business in local and foreign markets. Among these are;
- International PEO avails you with the opportunity to concentrate on boosting your business while they take care of your employees’ HR obligations. Thus, you will have enough time and resources to grow and boost your business.
- The employment organization will provide your business with timely and cost-effective support and management by taking away the burden of establishing local subsidiaries, compliant risks, employees’ management, and other HR issues.
- International PEO ensures quick integration of your business to foreign global markets by hiring local talents and experts that have a vast knowledge of the new market and culture.
- Global PEO will also help your company to attain a solid foundation, stability, and sustainability in the new market due to their easy access offering to local business frameworks like licensing and financing.
Human Resources Outsourcing vs Professional Employer Organization
As explained in previous sections, there are several employment organizations in the world today, among which we have the Professional Employer Organization (PEO) and Human Resources Outsourcing (HRO). Having understood the definition of PEO, we must define what HRO is all about to understand its difference with PEO.
Human resources outsourcing is a third-party organization that offers human resources services to companies just as PEO does, but then, their services are in bits compared to what PEO offers. PEO takes responsibility for almost all the HR tasks of an organization but HRO does that in bits i.e. they can only execute specific HR functions as selected by the organization. While Global PEO provides employer of record solutions, HRO does not. Professional employer organizations can be utilized in businesses of any size; however, human resources outsourcing is mostly used by big businesses because they already have sufficient experts in carrying out their HR functions.
Limitations of PEOs
Since the start of this guide, we’ve provided answers to what PEOs can do. However, we must talk about what PEOs can’t do. The following Q&A will give you insights into the limitations of PEO:
- Can PEO control my business activities?
PEO only coordinates and controls Human resources and employment obligations for your company. They provide you with an employer of record solutions in managing payroll, compliance, and other HR activities while you concentrate on controlling and overseeing your business activities.
- Will PEO eliminates the need for the human resources department in my company?
PEO will not eliminate the significance and presence of the HR department in your company. Your company’s HR workers will still oversee workers’ responsibilities, the company’s ethics, conflict management, etc.
- Can the PEO organization serve as my financial and legal advisers?
PEO is only responsible for ensuring legal compliance and payroll tax management for your organization. They cannot act as your company’s legal adviser/lawyer nor financial advisers/auditors.
When engaging the services of a global professional employer organization, client organizations must remember that they still hold absolute control over the activities of their employees. PEO must ensure excellent synchronization of the hired talents with the client organization. The management of employees, however, is shared between the client organization and PEO. The PEO manages the employees’ payment, compensations, and compliance while the company controls the employees’ activities, responsibilities, ethics, job results, etc.
Other Services provided by International PEOs
PEO services are not only limited to risk mitigation, employees’ compensation, payroll management, and compliance. There are still additional solutions you can enjoy while using a professional employer organization. Among these are; employees’ training, legal and financial consultations, conflict management, talent sourcing and hiring, efficiency augmentation, international expansion, internal auditing, etc.
Who should use a Global PEO?
Global PEO is readily available to any kind of business irrespective of the size, industry, sector, or country. Organizations with global expansion plans should engage global PEO solutions. The services of this employment organization can be explored in both small, medium, and large businesses. No matter where your business is or moving to, global PEO is a perfect solution for employees’ management.
What WeHireGlobally is offering?
WeHG is an International PEO provider with excellent HR and employment solutions in over 150+ nations. With us, you’re assured of 100% risk mitigation, compliance, and optimized HR services for your workers.
This is Why the Global PEO Model Works
This is an organization that offers payroll, employment, and compliance solutions to companies working outside its home country. The organization helps companies in recruiting talents, mitigating risks, managing workers’ taxes, and taking on the employer of record functions.
A professional employer organization (PEO) is an organization that supports another organization/company in managing workers HR task, set up and calculate worker’s payroll tax, recruit talents for the company, and ensure compliance, PEO is used in the US for these purposes, and it is also used as employment organization or co-employer.
International PEO offers a wide range of benefits to your company, among which are reduced cost of management, compliance, reduced time of expansion, etc.
A PEO model is the pattern with which PEO carry out their activities. It’s the complete framework of PEO structure, capability, and suitability. PEO model works for businesses of any size, sector, or industry.