Insights into global expansion & employee retention

Published: June 2, 2022

How to Maximize the Benefits of International PEO

International PEO streamlines global expansion, ensuring compliance and mitigating risks. Benefits include quick market entry, cost-effective payroll and benefits, risk mitigation, flexibility, local expertise, and focus on business growth.
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If you’re looking to add a talented global workforce to your operations, one of the greatest challenges faced by businesses today involves upholding comprehensive procedures regarding recruitment, retention, compensation, benefits and compliance.

That’s because extending operations globally often involves many complexities that your current global HR team may not be equipped to handle. In that case, it may be time to consider an international professional employer organisation (PEO).

An international PEO can facilitate and simplify your global hiring processes to help put your company on the map. In this guide, we’ll explore everything you need to know about what is a PEO vs International PEO and their many benefits. 

Local PEO vs International PEO

Before jumping into the potential benefits of working with an international PEO, it’s worth touching on the differences between an international professional employer organization (PEO) and a domestic PEO. To that end, you’ll want to consider your:

  • Business size – PEOs are generally well suited for small to medium-sized businesses that don’t have the resources to fully handle their HR needs. While a business of under 10 employees might be too small for a PEO, something closer to 20 employees could be a perfect fit. However, international PEOs will likely partner with larger businesses looking to expand overseas.
  • Employee pool – The expertise of domestic PEOs is more locally based. They may have extensive knowledge of local employment laws relating to employees and taxes in numerous states, but likely not across countries. If your employee pool is international or you’re looking to expand globally, you’ll need to recruit the expertise of an international PEO.

Both forms of PEO services can help alleviate the burdens that would traditionally fall on your HR department. However, the scope of an international PEO is more diverse and specifically touches on international business expansion to a new location. With that in mind, let’s start looking at some of the potential benefits of working with an international PEO.

International PEO globe

1. International HR Expertise

Expanding your in-house HR team to an international market involves various HR tasks that will require effective communication within international employees. Fortunately, international PEOs have several systems in place to help your business manage the following:

  • Compliant onboarding and offboarding
  • Payroll and benefits
  • Medical and life insurance
  • Compliance
  • Tax withholdings
  • Government-required reporting

As such, expanding businesses can focus more of their efforts on daily operations to research and develop international marketing strategies, create budgets, and facilitate global franchising. 

In short, rather than allotting employee management tasks to making additional HR hires and implementing training programs, business leaders can tap into an existing network of experts to streamline their expanding operations.

Read more: Important Things Every HR Practitioner Should Consider when Choosing an International Employer of Record

2. Accelerated Expansion

If you’re thinking of expanding your business internationally, you probably don’t want to wait an exorbitant amount of time before you dip into international markets. However, the paperwork alone will probably slow things down considerably. Also, if you have plans to expand into more than one country, there may need to consider additional regulations and requirements. 

Fortunately, international PEOs can make your company more flexible and ready to operate in new markets. That’s because they already have the systems and the people in place that will allow you a fast pass towards expansion. This way, your international plans can move as quickly as you need them to and you never lose momentum to paperwork and red tape.

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3. Knowledge of International Law

Local employment laws that apply to taxation and hiring can be complicated enough to keep your HR team consistently busy. Just being sure that you have the necessary knowledge to stay in compliance is a full-time job. Now you need to expand that internationally.

The likelihood of an error goes up exponentially as your company expands to more global markets, which may lead to:

Even the best training can’t equal the years of experience with international laws that you’ll have access to by working with an International PEO. For instance, at Playroll, we’re backed by VAT IT Group, which works with over 50% of Fortune 500 companies, culminating in the expertise of working with over 13,000 companies in over 117 countries. 

4. Cost Savings

International business expansion can be very expensive. If you choose to send an HR employee to a foreign country, rather than work with an international PEO, you may experience costs associated with the following:

  • Language and cultural training
  • Relocation expenses
  • Housing and childcare benefits
  • Transportation costs
  • Tax equalization

International PEO services can help to streamline and, in some cases, reduce your expenses. Their international knowledge means they already have systems in place to make sure you only pay what is necessary and help you make an informed decision about expansion before you start taking on the burden of added costs.

5. HR Operations Assistance

International PEOs have great knowledge of international law and compliance regulations, such as the UK’s GDPR and PAYE tax and National Insurance (NI) contributions. They also have great knowledge of all things HR, meaning you can outsource many of your HR tasks to them. 

These responsibilities may include:

Basically, many of the things your HR team is already responsible for domestically can be handled internationally by an international PEO provider. This frees up time for your domestic HR team to focus on the tasks they’re experts in, while the international PEO provider handles global employees and international compliance requirements

6. Larger Hiring Pool

Expanding business internationally allows you to tap into the global hiring market. You can trust your international PEO provider to hire qualified candidates in-country and help you manage a global team with expertise. 

Additionally, with an international PEO, you won’t need to establish a foreign legal entity. Instead, international PEOs can expertly navigate international compliance risks and regulations to ensure your hiring processes meet the requirements and regulations of the new country you choose. 

7. Improved Morale

How can an international PEO help improve morale among your employees? The processes put in place by international PEOs tackle payroll processing inefficiencies and align with international payroll criteria, systems, and procedures. This ensures that automated payroll will be handled smoothly, with minimal to no errors to ensure that employees are paid on time.

8. Data and Analytics

The best international PEOs won’t just ask you to trust them when it comes to your international hiring—they’ll give you the tools you need to monitor how their efforts are aiding your HR performance on a global scale. 

At Playroll, we help you track employment contracts and compliance narratives within each new country you operate in to streamline your HR operations.

Find out How to Do Payroll for an International Business.

Should You Work with an International PEO?

Now that we’ve gone over many of the benefits of partnering with an international PEO, you may still be wondering if your company is the right fit for an employer of record partnership to help you expand globaly. To help you decide, let’s look at some of the types of businesses that may benefit from partnering with an international PEO:

  • Large companies expanding into new markets – If you already have a successful company and you’re thinking of expanding into international markets, an international PEO services may be exactly what you need to cut costs, streamline HR operations, and comply with international employees regulations.
  • Smaller startups – International expansion is often considered when you want to tap into different global markets. But what if you want to tap into international talents? Recruiting the top talent is what separates successful startups from the rest, and working with an international PEO ensures your startup has access to the largest global mobility pool possible.
  • Businesses expanding into an unfamiliar market – Big, medium, or small businesses may see ample opportunities in the international arena, but you don’t want your ability to tap into these international opportunities to be limited by your lack of knowledge of that market. Tapping into the expertise of an international PEO allows you to expand confidently, knowing you’re abiding by the country’s hiring laws and regulations. 

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Global Professional Employer Organizations (PEOs) offer numerous benefits to businesses seeking to expand their operations overseas. Here are eight of the most significant benefits of using a global PEO service:

  1. Simplified HR management: Global PEOs can handle complex HR issues, such as local and payroll, local tax laws compliance, and benefits administration, so businesses can focus on their core operations.
  2. Access to international talent: With a global PEO, businesses can hire talent from around the world without having to set up a local entity in each new country.
  3. Cost savings: Setting up and maintaining a legal entity in a foreign country can be expensive. A global PEO can provide cost-effective solutions, saving businesses time and money.
  4. Compliance: Global PEOs stay up-to-date with local employment contracts laws and regulations, ensuring compliance with all legal requirements.
  5. Flexibility: A global PEO can offer businesses the flexibility to scale their operations up or down in different countries, depending on their needs.
  6. Risk management: By using a global PEO, businesses can mitigate risks associated with international expansion, such as compliance, legal, and tax risks.
  7. Faster time to market: With a global PEO, businesses can enter new markets quickly, without having to navigate complex legal and HR requirements.
  8. Local expertise: A global PEO company has local expertise and knowledge of different countries’ cultures, laws, and regulations, providing businesses with invaluable insights and support.

Expand Internationally With Playroll 

Partnering with an international professional employer organization. Global peo provides your business with an opportunity to expand to new countries with the ease of knowing your hiring processes are within international employee compliance regulations. Additionally, they may help to accelerate your expansion and cut costs of employee transfers. 

If you’re looking for international expansion , let Playroll guide the way and help your business manage employee payroll management systems across the globe. We also have employer of record services to help you set up businesses in other countries.

When you’re ready to start moving forward, take a look at our easy-to-understand pricing structure. Once you’ve done that, we’d love to schedule a demo where we can show you the many benefits of working with our experts. 

International expansion should be exciting. Tap into that excitement (and international markets) with Playroll.

Global PEO Services can provide a range of services, including hiring, payroll management, benefits administration, and compliance with local laws and regulations. With Global PEO Services, companies can expand their global footprint without having to establish a entity in every country they operate in.

This can help businesses save time and resources while also reducing legal and financial risks. By leveraging Global PEO Services, global companies can focus on their core business activities and leave the complexities of managing an global workforce to the legal employer of record experts.

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