Part 1: What Is a Global PEO?
If you’re thinking about international business expansion, then it’s important to be fully aware of every option out there for you and your business. Now, whether you’re a business owner, an entrepreneur, or a savvy investor, knowing the difference between something as simple as a Global PEO and a global payroll company or HR outsourcing company is critical—especially when you’re in the planning phase of your international business expansion strategy.
In this intensive 3-part series, we’re going to take a deep dive into the building blocks and basic necessities that all Global PEOs offer. From there, we’ll talk about how PEOs are different from payroll companies. Finally, we’ll discuss the reasons why people often confuse the two and show the ultimate difference choosing a PEO over a simple payroll company can make.
What Is a Global PEO?
A PEO is an international entity that has the exclusive ability to provide a foreign business with a wide range of services related to employee management, payroll, administrative assistance, and compliance strategies. These services can be delivered for multinational organizations, businesses, and institutions that are planning to operate outside of their domestic jurisdiction.
This means that everything from talent acquisition, to payroll, to benefits, to employee rights protections and employee management are all services that a Global PEO can provide—for a fee, of course. If you haven’t already noticed, many of these services are the same duties as your internal HR team. And while it might seem like a Global PEO is similar to an HR outsourcing company, you should be able to tell right off the bat that the services of a Global PEO are much more extensive and comprehensive.
Essentially, a PEO is a legal entity that will serve as the Employer of Record for your multinational organization. This means that your partnering PEO can and will hire, manage, and pay taxes for your organization within your new host country on your behalf. Obviously, this can be quite beneficial for an expanding business, especially if you don’t want your HR or administrative staff to have to tackle domestic and international issues.
Why Work with a Global PEO?
By partnering with a PEO, you can bypass all the complex legal hurdles that come along with international incorporation.
From there, your PEO will work to hire full-time and part-time employees on your behalf to manage your new company. In other words, you can sit back at home base and watch your international operations come to life.
The true purpose and the most significant benefit of working with a Global PEO comes down to one thing—making it easier for businesses with an eye on international expansion to bring their visions to life. Working with a Global PEO provides you with a seamless entry point into a new market without taking on the added risk of formally incorporating. And that’s what makes it such a game changer for international businesses.
How Does It Differ from a Payroll Company?
In part 2 of this series, we’ll take a deep dive into the differences between a Global PEO and a payroll company, so that you can see just how extensive the services of a Global PEO truly are.