Global expansion in business operations is rising and at an all-time high considering the ever-changing work environment. Given a rise in remote work or a ‘work from anywhere concept, employers are now focusing on initiatives toward expanding their horizons of business operations into newer locations and newer markets.
Although several businesses are familiar with common HR channels, including consulting, benefits brokers, and staffing, a global professional employment organization (PEO) provides a one-of-a-kind service that helps businesses manage compliance and hiring risks when expanding overseas.
Understanding a Global PEO Service
Suppose you are looking to expand your business operations into newer markets. In that case, the chances are that you have explored the option of setting up a subsidiary or a legal entity versus partnering with a global Professional Employer Organization (PEO) service. In such cases understanding a PEO is a must.
A global PEO service model assumes HR responsibilities wherein, as a business, you can offload tax compliances, payroll, and other complex processes attached to international hiring. You can now
- Hire and employ highly competitive talent anywhere in the world without having the hassle of establishing an entity, and
- Focus on global expansion through global employment.
With the help of a legal Employer of Record, your responsibilities get shared so that you can focus on running your business. As an Employer of Record, they
- Maintain and manage global payroll services
- Keep a record for your employees.
This way, when partnering with an international PEO provider, you will be able to
- Focus on your business goals and priorities while directing your employees’ daily tasks and,
- Have complete visibility of your employees’ location.
A service-based global PEO service helps harness the benefits of services and software that help employers compliantly manage employees while meeting their business objectives.
How Does a Global PEO Service Work?
Essentially, a global PEO service utilizes two significant aspects that help make global employment easy —
- Its global infrastructure and,
- Locally compliant employment contracts when you hire your workforce.
Therefore, to ensure that both aspects are covered, a global PEO service follows the following steps:
- A Global PEO service helps you hire and onboard your employees from different countries across the globe.
- Using a network of local entities, a Global PEO service ensures that all compliance requirements are adhered to. They have a network of local legal entities in multiple countries that help them assume HR responsibilities such as
- Generating employment contracts or offer letters
- Employee benefits
- Work permits
- Processing payroll,
- Compliance aspects such as tax and accounting requirements, etc.
- The next step is when a global PEO provider with local expertise ensures all your employees’ payroll requirements are met by accurately processing all their compensations and statutory and voluntary benefits. As a business, you just need to set the payroll cycle you want to follow.
- The next step is to choose statutory benefits and necessary deductions for your employees. Statutory benefits and deductions vary and differ from country to country. Providing statutory and additional voluntary benefits (such as employee stock options, health insurance, dental cover, etc.) are largely covered by a comprehensive benefits program of the international PEO providers. Most of the global PEO services help you choose from the voluntary benefits from their benefits package.
- The last step is when businesses leverage the platform a Global PEO service offers. Global PEO services are known for their smooth and easy-to-understand user interface. Through an online user interface, businesses can leverage the technological platform to manage their employee’s expenses, time and attendance, insurance and non-insurance benefits, etc.
- Businesses can onboard their hired employees within a few clicks, work with them, and direct them precisely as if they are on their own payroll.
Businesses enter into a contract with an international PEO provider when hiring employees in different countries. Once partnered with a PEO provider, they assume all HR responsibilities such as generating an employment contract, risk mitigation, onboarding of employees, payroll, compliance, and benefits.
Benefits of Partnering with a Global PEO Solution
Global PEO outsourcing has several benefits; however, one of the core advantages is uncomplicating international expansion.
Alongside the core benefit that a global PEO service has to provide, a few other benefits that businesses can experience include –
Relocating your time to your core business requirements
If you are a small business, the chances are that international expansion can divide your HR team’s attention to multiple aspects such as managing different compliance-related aspects such as labor and tax laws. A global PEO service has a team of professionals and experts that help make your onboarding and compliance processes easier.
Pursuing global expansion cost-effectively
Pursuing global expansion cost-effectively has been made relatively easier by partnering with the right global PEO service. Their platform can help set up sturdy systems and processes that help manage invoices, perform day-to-day payroll duties, and transfer data securely. Setting up an entire team in every country can be time-consuming and expensive.
Accessing global talent
Accessing global talent in today’s time is relatively easier, especially when digitalization breaks geographical barriers.
A global PEO service can help you onboard and manage employees without starting a business or setting up a legal entity. This opens the door to the best talent and an opportunity to hone employees’ skills globally.
Ensuring local compliance aspects in new markets
Ensuring local compliance aspects in new markets can be relatively complex. Different countries have different compliance regulations, and non-compliance can also attract penalties.
Partnering with the right global PEO service gives you acess to professionals and legal experts which helps you compliantly expand your business . They ensure each contract is compliant with the local laws and regulations, including
- Social security
- Workers’ compensation
- Employee benefits
- Minimum wages and,
- Termination requirements
Strengthening your employee data security
Strengthening your employee data security is essential when you have a global team. An international PEO service is experts in handling sensitive employee data from different countries, such as payroll information, employee IDs, employment contracts, etc.
This will ease administrative tasks of protecting sensitive data from your HR and recruiting teams. The right EOR will help in also covering IP protection and Single Sign-On (SSO).
You can learn more about the advantages of using PEO services for your business.
What are the Functions Carried Out by a Global PEO Service?
A global PEO service (or an EOR) helps businesses in global expansion by helping onboard talent across the world without worrying about compliance regulations. However, there are certain other aspects that an international PEO service helps, which include the following functions –
HR and employee management
An international peo provider ensures that your HR and admin tasks, such as collecting and managing necessary employee data, are automated and in one central location.
Certain global employment platforms such as Multiplier have a network of legal partners across several countries that regularly review processes and contracts and ensure that they are up-to-date and legally compliant.
You can use an EOR platform to process the payroll for your global team on time.
Comprehensive employee benefits plans and administrations
Several global services provide comprehensive benefits plans that you can choose from. The employee benefits range from employee stock options and insurance plans. Multiplier is a global employment platform that helps in providing an array of benefits you can choose from.
A global PEO solution ensures that all your social security contributions, taxes, and other fees are deducted to comply with relevant local laws.
When hiring on a global scale, providing a seamless onboarding experience helps give employees confidence in the business culture. Having their legal and contractual documents ready to ensure they can e-sign all documents is essential when you have a global team. A global PEO service helps your team provide a seamless employee onboarding experience.
A global PEO service ensures that employment contracts comply with the local labor laws. This helps in extending offers to newly hired employees.
Employee offboarding or termination processes
Termination regulations are different for different countries across the globe. Therefore, you must comply with the regulations while giving your employee a smooth offboarding experience. This is where a global PEO service helps. They ensure that you do not have to worry about wrongful termination while ensuring that the offboarding experience for your employee is smooth.
Employee data protection
Ensuring that the data, documents, and employment contracts provided by your employees are protected is important. Other sensitive data relating to employee tax and payroll are secure once you partner with a global PEO provider. They ensure they comply with international requirements while keeping data protection features in check.
Who Should Partner with a Global PEO Service?
If you are a business looking to expand into international markets, partnering with a global PEO service is an excellent option.
For startups, global PEO providers offer access to an affordable solution for co-employing compliantly. You can partner with a PEO to hire and co-employ within a matter of days and fast-track your growth without having to worry about aspects such as
- HR and administrative tasks
- Payroll and,
For medium enterprises and businesses looking to rapidly scale their business operations internationally, partnering with a global PEO service can help –
- Broaden your market reach and,
- Increase team diversity
Businesses can do this without setting up a subsidiary in multiple countries.
Factors to Consider When Choosing a Global PEO
When expanding your business globally, you ideally want to partner with a global PEO service that offers excellent services and one that you won’t have to swap out in five years.
When assessing your international PEO providers, you must consider your business requirements, long-term goals, and current requirements. However, in addition, you can also consider the following before concluding the right match for your business —
- User interface
- Data protection
- Customer support
The Multiplier Advantage
With an influx of extremely talented and skilled employees across the globe, it is a time-consuming process to build an international team. This is especially the case when compliance is involved. Considering the different tax models, labor laws, and mandatory employee benefits for different countries, it becomes relatively tougher to keep up with the changing aspects of these areas.
As your dedicated Employer of Record (EoR) and a global PEO service, our in-house professionals help assume HR responsibilities after hiring employees in the country you want to expand your business. We handle all the compliance aspects and risk mitigation related to the employees and take care of the big picture — while maintaining day-to-day control of your employees.
Multiplier ensures you have all the benefits of onboarding new hires and providing them with employee benefits without worrying about expanding your business globally. We offer employee benefits that include employee onboarding, access to a comprehensive employee benefits plan, and support from our professionals that help with compliance, payroll, and taxes.
Talk to us to learn more!