RemotePad Logo

What is an Employer of Record

Hire globally with an EOR

What is a Global PEO

An efficient global hiring solution

What is a PEO

Hire locally with a PEO

Our Methodology

Why you can trust our guides

Work Visas

How to apply for a work visa

Digital Nomad Visas

Get a digital nomad visa

Outsource Recruitment

How to outsource recruitment

Hire Globally

Find international talents

The Startup Hiring Guide: How to Recruit and Hire A+ Talent

Best Employer of Record (EOR)

Discover the best EOR companies

TOP 10 PEO Companies

Find the best PEO

TOP 10 Payroll Providers

The best payroll companies

Employee Relocation Services

Relocate employees globally

1. Horizons

Best Global EOR

2. Remote

Best EOR for Compliance

3. Deel

Best EOR Platform

4. Papaya Global

Best EOR for Payments

1. Horizons

Best Global PEO

2. ADP TotalSource

Best for Flexibility in Benefits

3. Rippling

Best Combined PEO and HRIS

4. Skuad

Best PEO Software for Tech Hiring

Japan PEO (Professional Employer Organization)

VERDICT: The best Japan PEO in 2024 is Horizons, for its deep experience in supporting international companies in Japan and throughout Asia.

Key Takeaways

  • Japan PEOs offer strategic solutions for companies looking to enter or scale in the Japanese market, handling employee management tasks like HR, payroll, benefits administration, and compliance.
  • Japan PEOs establish an employment relationship with the client’s employees, relieving the client of the intricacies of Japanese labor law and cultural norms in the workplace.
  • The benefits of PEOs in Japan include cost-effectiveness, improved compliance, access to a broader pool of talent, and flexibility, while the disadvantages may include less direct control over HR policies and the potential for misaligned interests.
  • The top five PEOs leading the market in Japan are Papaya Global, Deel, Skuad, Velocity Global, and Remote, each with unique strengths, making them a valuable choice for businesses.

What is a Japan PEO?

Japan PEOs work through a process known as co-employment. In this arrangement, the PEO and the client company share employer responsibilities. The client company controls day-to-day activities and core business operations while the PEO manages employee-related functions.

This collaboration starts with the client company identifying the talent they need in Japan. Once the candidate is selected, the PEO legally employs them on behalf of the client. The PEO then handles HR tasks like payroll, tax filings, benefits administration, and legal compliance under Japanese law.

An infographic that describes how a Japan PEO works.

What are the benefits of a Japan PEO?

  1. Ease of Market Entry: Japan PEOs simplify the market entry process for foreign companies by eliminating the need to establish a legal entity, which can be complex and time-consuming.
  2. Cost-effectiveness: By consolidating HR services, PEOs can offer economies of scale, resulting in business cost savings. Also, eliminating the need for an in-house HR department reduces overheads.
  3. Regulatory Compliance: PEOs provide expertise in local employment laws, ensuring companies are always compliant and reducing the risk of penalties.
  4. Talent Acquisition and Retention: PEOs have local knowledge and resources that can help businesses attract and retain the best talent in Japan.
  5. Flexibility: PEOs offer a flexible solution for companies wanting to test the market or hire remote workers, contractors, or temporary staff in Japan.

What are the disadvantages of a Japan PEO?

  1. Limited Control: Companies may find they have less direct control over HR policies as these are managed by the PEO.
  2. Potential Misalignment of Interests: If a PEO’s practices do not align with the company’s values, it can lead to potential conflicts.
  3. Dependence on PEO: Overreliance on PEOs could lead to potential business risk if the PEO fails to deliver its responsibilities.
  4. Potential Hidden Costs: Some PEOs may include additional fees or charges that are not immediately apparent.

Top 5 Leading Japan PEOs

  1. Horizons: Horizons is a global PEO with a strong presence in Japan and throughout Asia. With a leading PEO platform, and experts on the ground to support your Japan hiring, Horizons is the ideal Japan hiring partner
  2. Deel: Deel stands out with its advanced technology that simplifies compliance, payroll, and HR management. It’s preferred by companies aiming for simplicity and efficiency.
  3. Skuad: Skuad specializes in helping businesses hire, pay, and manage remote teams. It’s popular with companies that are keen on building distributed teams in Japan.
  4. Velocity Global: With a wealth of experience in international PEO services, Velocity Global offers robust HR services and local expertise in Japan.
  5. Remote: Remote offers a comprehensive suite of employee management services with a focus on simplifying global employment. Their strength lies in their comprehensive understanding of international labor laws, making them a solid choice for businesses.

Conclusion

Japan PEOs offer a compelling solution for businesses looking to penetrate the Japanese market without the complexities and costs of establishing a legal entity. However, businesses must carefully consider the pros and cons and choose a PEO that aligns with their goals and values.

FAQs

Yes, a PEO can hire both permanent and temporary staff, full-time or part-time, on your behalf in Japan.

While using a PEO is one of the most convenient ways, it's not the only way. You can also use business process outsourcing (BPO), set up a representative office, or enter into a joint venture. However, these methods may come with their own sets of challenges and complications.

What did you think of this article?

Click on a star to rate it!

Average rating 5 / 5. Vote count: 1

No votes so far! Be the first to rate this post.

Search

Search