Many SMB companies are choosing to use a PEO as their outsourced HR function. In the US alone, PEO’s (Professional Employment Organization) provide services to 175,000 small and mid-sized businesses, employing 3.7 million people. The 175,000 PEO clients represent 15% of all employers in the US, whose number of employees is between 10 and 99.
The total employment represented by the PEO industry is roughly the same as the combined number of employees for Walmart (United States only), Amazon, IBM, FedEx, Starbucks, AT&T, Wells Fargo, Apple, and Google. The estimated revenue from the PEO industry sits at $270 billion.
Using a PEO is also attractive to startups, enabling them to focus on establishment and growth of their core business, while it enables existing businesses to look offshore to find and engage the best talent.
With the advent of globalization, businesses now have more opportunity than ever before to expand their global footprint. Whether you are expanding your business to new countries and regions or looking to engage offshore talent, both come with their own set of challenges.
An international PEO performs many of the same functions as a domestic PEO but with added benefits. Using an international PEO enables a company to start doing business in a new country, without the need to setup a new business entity. The PEO company will engage, onboard and manage the workers, ensuing they are compliant with all the local laws. Global payroll is facilitated by the international PEO and invoicing centralized for the client.
The majority of PEO’s in the US only operate locally and aren’t setup to provide global PEO functionality. In some cases, a PEO will partner with a global PEO in order to provide their client with the international piece for their business requirements.
When selecting a global PEO to work with, we suggest a few things to take into consideration.
Does the global PEO have offices setup where you want to conduct business?
It’s easy to list a number of countries where they operate, but do they have their own offices in those countries listed? Having an in-country office is the best case scenario. It means you are dealing directly with the company itself, rather than third party providers. The more in-country solutions provided, the better your service.
North American region is expected to hold a major share in the Global Professional Employer Organizations (PEOs) Market
Payroll and compliance
When setting up business in a new country, it’s imperative to be in compliance with local laws. A global PEO will enable compliant global worker engagement, global worker classification, global worker payroll and ongoing workforce management. Ensure your workers are paid on time wherever they are.
Your business will change over time and you may require to scale your workforce to meet your business needs. Always check if your PEO can adapt with you.
For US and Canada based businesses looking to expand globally, having an international PEO that is based in the US/Canada enables smooth operations. You will be dealing with people that understand your local market and business acumen. You should have a dedicated account manager in your same geographical location, who will then liaise with their global counterparts.
CXC Global enables, simplifies and enriches the experience of engaging contingent talent, on demand, across the globe. We’ve been in business since 1992, helping businesses all around the world to compliantly engage, pay and manage their global workers.
We partner with PEO companies in the US to assist their clients with the international PEO function.
Our global workforce solutions footprint continues to expand, as we take on new territories to meet our clients’ needs.
Speak with one of our international workforce specialists to learn more about our global PEO solutions.
Request a demo for our compliance platform, CXC Comply.