Hiring through Professional Employment Outsourcing

professional employment outsourcing

Whether you’re a small business owner looking to expand into new territories or a growing brand and want to push into a competitors’ market, it can be challenging to emulate your business operations in another country; and in some cases, it’s just too expensive to do so.

In this article, we’re lifting the lid on professional employee outsourcing (PEO) and explaining why it should be a part of your strategy if you’re looking to build a global business empire.

What is PEO?

Professional employment outsourcing may sound like a mouthful, but in reality, it’s a simple concept, that was designed to allow businesses to expand into new territories and hire staff in a new country, without having to form a local legal entity or a company. Simply put, companies can outsource their employer responsibilities (such as their wages, management of taxes, and so on) to a company that offers PEO, who will register the employee under their own company.

Not only does this mean you won’t have to register a company in another country, but it can save you time and money and allow you to expand abroad, virtually overnight.

professional employment outsourcing

Although you won’t be directly responsible for paying your employees’ taxes of salary, you’ll still maintain full day-to-day control over their workload. Think of it like contracting employees; you are effectively ‘hiring’ talent from another company, but they’ll act like any other member of staff.

The biggest advantages of PEO

The biggest and perhaps most obvious benefit of using PEO is that it can save you a great deal of money. Indeed, as a small or medium-sized business, registering your company abroad could be costly, and in many cases too expensive to make it worth it´s while.

However, with a PEO, you can hire an employee in another country, who can work on your behalf and allow for your international expansion. You may decide that you want to hire an employee in Colombia, for example, to oversee your Latin American expansion; you can use a PEO service to hire an employee, without having to legally register your business in Colombia.

Another significant benefit to PEOs is localized support. It can be tough to navigate the niches within different countries, and overcome challenges such as language or cultural barriers. When you hire an employee in a new country, you’ll have a presence in a new country and the ability to expand into new territories – and finding solutions to those problems can be expensive.

What’s more, when you work with a PEO, you won’t have to worry about legislation in countries, as this will be covered.  In my personal opinion, “professional employment outsourcing is a good business choice for companies looking to expand without having the legal and financial burden of establishing and maintaining a legal entity in a foreign country.” Simply put, PEO makes it possible for businesses of all shapes and sizes to expand.

Finally, using PEOs gives you the freedom to directly manage employees that are working abroad. Utilizing employees to work on tasks such as translation and business development will free up your time, allowing you to concentrate on the growth of your business operations.

Drawbacks of using Professional Employment Outsourcing

Whilst there are some significant benefits to using professional employee outsourcing as part of your business, there are some drawbacks to consider, too. The first of these is a loss of control. As a small or medium-sized business owner, you’ll no doubt have total control over your employees, including their pay and taxes. This isn’t always possible when employing PEOs.

Using a PEO can lead to less control over your employment strategy, as a PEO can dictate the tone of the scheme and take control over some aspects of your employee, whether that be their benefits or bonuses. If you want to go ahead with a PEO, then make sure that you establish the responsibilities and tasks that you’d like your employee to do from the get-go, as this will allow your contract to be written and signed off in your favour. Planning reduces the likelihood of problems further down the line, and ensures your employees are available to you on your terms.

The second disadvantage to using a PEO is that, in certain situations, the human resources that are offered to your employees may lack in flexibility or personality. You may be used to offering your employees a relaxed and comfortable approach to human resources, whether you allow employees to finish early and make up the time, or giving employees particular benefits. With a PEO, you won’t be able to provide your employees with on-site support, and if personal issues arise, then the human resources department may not deal with them in the way you would.

Of course, if you build a relationship with your employees hired by PEOs, and have an open and honest working relationship, you can take control of their wellbeing and support. You may even choose to introduce your overseas employees to your head office human resources department.

Wrapping up

There are a huge number of benefits to taking your business, and all entrepreneurs have their own reasons for doing so. Perhaps you want to find new revenue streams, or change the lives of more people who want to use your products and services? Maybe you want to expand into new territories to assess greater talent, or learn a new culture as a business owner? Indeed, you may even want to expose your brand to foreign investment opportunities, improve your brand reputation in overseas markets, or simply diversify your company markets.

Whatever your reason for expanding, make sure that professional employee outsourcing plays a role in your growth. Not only is it a low-risk and high-yield method of employing new staff in countries around the world, but it takes away some of the burdens of hiring and managing your employees, giving you more time to focus on what’s important: growing your business globally.

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