- Professional Employer Organizations (PEOs) work with client businesses as a co-employer and outsourced HR services provider. PEOs administer payroll and benefits, report and pay employee taxes, and provide benefits and insurance packages. They act as the “employer of record” and assume liability for local regulatory compliance.
- Global PEOs provide PEO services to clients hiring and managing an international workforce. Their clients range from small businesses looking for highly skilled global remote workers, to large manufacturers and service providers.
- Global PEOs generally offered sophisticated software services, regional expertise, and international insurance.
- A Global PEO can help employers save time and money on hiring international employees, stay compliant in foreign legal environments, and provide access to a global talent pool.
- Top Global PEOs include Remote, Velocity Global, Deel, and Papaya Global. Each offers a unique set of services and strengths for global employers.
At one time, only the largest corporations had need of a global workforce. Today, however, businesses of all sizes and in many different markets can benefit from hiring Internationally, whether it is for expansion into new markets or finding the right talent for a remote team. Global PEOs can help in this process, by enabling businesses of all sizes to take advantage of international labor markets. The clients of a Global PEO could be a tech company that runs entirely virtual, with developers and engineers working together on different continents. It could be a producer building regional marketing and sales teams to support their international distributors. It could be a national size construction firm expanding into rapidly developing international cities.
Global PEOs take the same business model that works for Regional and National PEOs and expand that out Internationally. A PEO works with a client business as the “employer of record” for a given workforce, known as “co-employees”. The range of PEO services varies with each company, however, it typically includes payroll processing, employee tax reporting and payment, benefits administration, onboarding, and ensuring regulatory compliance. In fact, as employer of record, the PEO assumes liability for these functions.
PEOs also provide insurance and employee benefits coverage, usually through a single third-party provider. Because PEOs employ thousands of staff on behalf of client businesses, they are able to obtain low premiums through their bulk purchasing power (known as a higher risk pool). This allows smaller businesses to purchase insurance packages that would otherwise only be available to larger employers.
Today, many PEOs leverage software platforms to serve their clients more efficiently. These platforms are similar to Human Resources Information Systems (HRIS), they give the business owner a birds eye view of total payroll expenditures, taxes paid, working hours, claims processing, and more. PEO software usually also includes information on onboarding status, and insurance and compliance documentation. For Global PEOs, these software platforms are especially important, as they allow business owners and management to track employees that work in different timezones, get paid in different currencies, and work under different regulatory environments.
What is a Global PEO?
A Global PEO offers most of the same services as other PEOs, with a few differences. Because they operate in many different countries, a Global PEO will sometimes contract with local employers of record to provide services in a particular market. Global PEOs will also have legal specialists familiar with local labor regulations in different countries available to assist their clients. Most Global PEOs also have a very robust software platform, providing information on local compliance issues, employee costs in local currencies and dollars, and the advanced hiring and onboarding services needed to build a global team.
Insurance and benefits services with a Global PEO must also be global. While most insurance providers cannot cover every country of the globe, and many nations will have national insurance and pension funds that employees must pay into, a Global PEO should have multinational benefits packages that work for most employees in most countries.
Global PEOs also offer a range of services that reflect the needs of their multinational clients. Some companies hiring freelancers and subcontractors may only wish to use the PEO software platform and subscribe to the service as an alternative to an HRIS, which can one day be scaled to a full-scale PEO solution if needs arise. A company with an internal HR department and expat employees in several countries may only use the Global PEO for international insurance coverage and administration. Other companies maintain and expand large workforces in multiple countries and need to use the full range of services a Global PEO offers.
What are the benefits of a Global PEO?
1. Save time
Hiring employees in a new labor market, especially an international one, can be time-consuming, difficult, and costly. Qualifications and certifications will be different from those the home office management are used to, and the most competitive and qualified candidates may not be readily apparent. Local online job posting platforms may be different from those at the home office, and in some developing locations, an online platform may not even be used, especially for construction or factory jobs. What’s more for many positions, even skilled ones such as engineers, English will often not be the language of choice for recruiting the most skilled and cost-effective staff.
A global PEO will have an established base in all of the countries they operate in. They will know which local channels work best for various markets, what the standard wages are, and how to spot the most qualified local employees. By using a Global PEO, home office representatives do not need to take up residence in the field just for the hiring process. These time savings allow company owners and management to focus on building the market, finding partners, and developing other necessary local infrastructure.
2. Save money
Expanding internationally can cost a lot before a single product has been sold or manufactured, or a single project is completed. A Global PEO can help to offset many of those costs.
Legal fees and consulting fees relating to hiring will be avoided by using a Global PEO. It is the job of the co-employer to ensure that qualified employees are found and retained in compliance with all local regulations.
In many cases, a Global PEO will eliminate the need to establish a subsidiary company in the country. If the new co-employees are working remotely on projects or products that will be sold in other jurisdictions (I.e. the foreign co-employer is not building a factory, a mine, or selling products within the country), the PEO’s legal status as co-employer may be all that is needed. This will save on licensing, taxes, accounting, and many other fees.
By having the Global PEO in front as legal employer in the country, the home office will be spared any potential fines, and the legal and PR costs associated with them as well.
3. Ensure compliance with foreign labor and tax laws
Labor laws, tax laws, and insurance and hiring regulations can vary widely in different nations. Even the basis for those laws may stem from a legal tradition that is completely alien to the home office management and its legal advisors.
Working with a Global PEO will save a tremendous amount of time and money on ensuring global legal compliance because it provides a local partner who already has extensive experience in that terrain. Problems can be solved much more quickly if the home office management does not have to learn the specific ins and outs of the legal environment in a foreign labor market.
As with all PEOs, the Global PEO will shoulder liability for any breach of local regulations as well. This provides a great measure of safety for the client business, as they will not risk their international market or workforce due to errors in regulatory compliance.
4. Hire the most talented staff
20 years ago, globalization was still mainly useful to manufacturers, the resource extraction industry, and large consumer goods producers. Today, especially after the leaps that have been made in remote work technology since the coronavirus pandemic, this is not the case. Global staff can now be hired for nearly any skilled position; engineers, programmers, PR, content production, design, and many more capabilities can now be sourced from a global talent pool. By using a Global PEO, businesses can hire the best talent, even if team members are all based in different countries. Many Global PEOs also offer immigration services, if international staff need to be brought to the home office.
What are the leading Global PEO providers in 2023?
Remote owns all of its own legal entities around the world, meaning that all co-employees work under Remote directly rather than a Regional or National PEO partner. Remote also operates a state-of-the-art, customizable platform. Through the Remote API, companies can integrate all of Remote’s services in onboarding, payroll, analytics, and compliance, into their existing software systems. This allows Remote’s clients and partners to seamlessly provide Remote’s onboarding and employer of record services to their clients.
2. Velocity Global
Velocity Global prides itself on having a “people first” attitude and maintaining a high level of customer service. They provide 24/7 customer support worldwide for both clients and co-employees. Clients are assigned an account manager who is able to match the time zones, languages and culture of both the client and the co-employees.
Velocity currently works in over 185 countries, and offers comprehensive benefits packages globally.
Deel offers analytical insights into global hiring, allowing businesses to compare costs per employee around the globe. They also allow contracts for every jurisdiction in which they operate to be viewed and signed online through the Deal dashboard. Compliance documents for each employee are listed in the dashboard, showing which are still needed and allowing managers to easily request outstanding documentation from co-employees. They maintain a network of legal employers of record in the jurisdictions they work in (currently over 150 countries), as well as over 200 legal experts in those markets. Deel is ISO 27001 and GDPR compliant in its data security protection.
4. Papaya Global
Papaya specializes in compliant global payroll processing, but can also provide benefits packages, handles equity packages for global employees and even assists with immigration for employees. Papaya currently processes payrolls in over 180 countries. Their HRIS platform allows management to check onboarding status, work hours, vacations, and sick leave. It also enables co-employees to view their payslips, request personal time off, and track their own hours. Their platform offers an HR overview showing types the vital metrics for all employees in the organization.
5. G-P (formerly, Globalization Partners)
G-P are one of the earliest global PEOs, and may have the widest global coverage. With a state-of-the-art PEO platform, they are a useful option for businesses with truly global teams. With an impressive client list covering global brands like Udemy, Zoom, and Distek, G-P can ensure you are tax and labor-compliant anywhere in the world.
Learn more about G-P do business below.
Global PEOs —Your Ticket to Global and Remote Hire
When hiring globally — especially when hiring remote employees — a Global PEO is a fast and cost-efficient option. And compared to hiring freelancers or contractors, you can rest assured that you are in full compliance with tax and labor laws and will not face a surprise bill for employment taxes.
Frequently Asked Questions (FAQ)
A Global PEO is a Professional Employer Organization that serves as a co-employer for staff in many countries around the world. They provide the same services as a Regional or National PEO such as onboarding, benefits packages and administration, employee tax reporting, and record keeping.
A Global PEO owns and/or contracts with legal employers of record around the world. Through these entities they are able to hire and onboard new employees, and report taxes and administer benefits in compliance with local regulations. As employers of record, they also assume liability for these global employees. Global PEOs usually provide regional experts to advise clients, as well as online platforms to provide data on the multinational workforce compliance documentation. Global PEOs usually offer their own unique services for international employers, such as immigration assistance, legal advice, HR software integration, and international insurance.