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What is an International Professional Employer Organization (PEO)?

Professional Employer Organizations (PEOs) provide services to 173,000 small and mid-sized businesses, employing 4 million people. There are 487 PEOs in the United States. The 4 million worksite employees were paid $216 billion in 2020. The total employment represented by the PEO industry is roughly the same as the combined number of employees for Walmart (United States only), Amazon, Kroger, and Home Depot. (NAPEO)

PEOs have been around the United States for quite some time. PEOs have helped handle business’ HR needs, payroll management, and more across states.

Now that businesses are tapping into the global workforce talent, global PEOs offer a simplified solution.

For businesses, setting up an offshore subsidiary is costly and demanding, especially when it comes to required expertise and corresponding paperworks that come with international law compliance.

Instead of setting up an offshore subsidiary, International Professional Employer Organizations (PEOs) can help companies who want to expand globally by hiring global talent.

When hiring global talent, the International PEO acts as the Employer of Record (EOR) and is thus the legal employer. International PEOs have the required expertise in international employment laws and ensure that compliance to these laws are met.

Aside from tapping into the global talent, here are some of the services provided by International PEOs:

Payroll Administration and Compliance 

According to the 2021 HR Dive survey, HR teams most commonly outsource benefits and payroll processing services.

Payroll computation, management, administration and compliance can be offloaded to an International PEO.

Tax Filing

Corresponding standard taxes, contributions and benefits are also deducted by the International PEO.

Employee Onboarding

International PEOs facilitate Employee Onboarding to ensure the employee is equipped with necessary understanding of his function and the product knowledge. This includes getting employees onboard with new technologies such as cloud platforms, integration of innovative technologies, current software, and technology, such as desktop sharing, CRM software, cloud services, and VoIP.

Employee Database

Delegate functions such as keeping employee records up-to-date and updating the employee information in the current database.

Employment Contracts

International PEOs can process employment contracts that are compliant to local hiring laws.

Read more on the strengths and weaknesses of the International PEO model in our previous article.

Professional Employer Organizations or PEOs can benefit from a third-party outsourcing vendor by enabling them to help fill critical staffing positions to support the functions above and improve both productivity and efficiency. Currently, Connext Global Solutions supports several PEOs with back office offshore staff across a variety of functions.

Learn more about Connext Global Solutions.

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