If you were searching for a ‘Global PEO’ or an ‘Employer of Record’, you would probably come across at least five companies offering services in either 130 countries, 185 countries or 190 countries. These seem to be stock marketing numbers that arethrown about to get your attention.
In fact, you might even come across companies claiming to have incorporated in EVERY country in the world. However, when you drill further down, you’ll see that all is not as it first appears.
What these companies often leave out is that, although they may technically be able to support you in 190 countries, a large percentage of this will either be through existing partnerships (delivered and supported in the territory by a local firm) or by a “let’s find someone to deliver it as we go along” approach.
Why should you care?
Ultimately, both of the above approaches are fine so long as you aregetting the service you want and require. Butthey do mean you will have no transparency and quite possibly little accountability in the supply chain — or worse, you may be trialling a territory your provider has little to no expertise in.
If you are using a Global PEO provider that ONLY uses partners, you are essentially just buying a vendor management service.
From an internal perspective, you may have many valid reasons to care about the type of arrangement you enter into (although these will largely depend on your individual business circumstances). However, there are some considerations that apply to every business.
If you are signing agreements with a ‘master vendor’, how are they ensuring compliance and governance in the country of work? How do you know that the payroll tax is being paid to the local government? What happens if the domestic partner goes bust? In many cases, the Global PEO will swerve responsibility for employees by citing contracts between partners.
Most EORs will use partners — that’s a given. In some countries, partners are a necessity. But it is essential to ensure your provider only uses a select few, trusted and financially stable partners and that it guarantees payments.
It is almost inevitable that the level of service will never be as good as if they delivery directly. Even with full autonomy to make top–up payments, deductions, contractual amends and anything else you may require, the process will take longer through a partner. Although you can still achieve the same result eventually, adding in the language barrier, the time difference and the fact you have three parties in the chain will mean it’s not as efficient.
A good PEO provider will employ only the best people and continuously invest in training and development for its team. It will also retain local payroll and legal experts in each country it operates in — just in case! These experts would have built up their knowledge and experience over many years and provide significant benefits when it comes to payroll queries, employee disputes, HR needs and legal services.
Many Global PEOs are predominantly looking to squeeze their partner’s margins, not to invest in excellent service and training for their partners and clients. In addition, if your provider is working blindly through a third party, how will you or they know how good these partners really are at supporting your business’ most valuable asset — your people?
A co-employment relationship
When you choose TopSource Worldwide as your Employer of Record, we enter into a co-employment relationship that delivers on your business’ goals to give you the best outcomes.
Unlike many Global PEOs, our preferred approach is to deliver our Employer of Record services directly through our own infrastructure, entities, bank accounts, payroll advisors and legal teams. This approach enables us to reduce the size of the supply chain, maintain control and, ultimately, offer a better service with reduced costs.
Where this is not possible, we will partner with a trusted local PEO to deliver the solution. This is often the case in places where there are a lot of customs to overcome or in countries like China which require a local entity. In these instances, delivering a premium PEO service would not be possible without the help of local knowledge and expertise.
Finally, we can also take a project-based approach, which is requested by multiple clients. This involves developing a six-week programme thatenables us to quickly go into and support clients in territories we are not already set up in. Through this approach, we are constantly adding to our capabilities and setting up new territories (last year alone, we set up three new entities).
To find out more about our expert PEO servicesand how we can help take the hassle out of your global hiring needs, get in touch today.
Sam is our Global Business Development Manager for Employer of Record services. For the last 10 years, he has assisted companies in the successful execution of their international expansion plans. Sam tells us “There’s something inherently exciting about growing a business into overseas jurisdictions. Each country does things slightly differently and it’s great to be able to share learnings on statutory requirements and cultural nuances”.
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