When planning an international expansion, the sheer variety of acronyms employed can be intimidating: PEO, EOR, GEO, ASO, BPO…the list goes on. Here we explain what Global Employment Outsourcing (GEO) is, and how it can differ from Professional Employment Organization (PEO) services.
What Is Global Employment Outsourcing?
Many functions of an enterprise can be outsourced: That is, the enterprise contracts with a third party to carry out a particular function or operation. A common example of outsourcing is Business Process Outsourcing (BPO): This covers, for example, the outsourcing of accounting, IT, human resources, or payroll. ‘Front office’ functions can also be outsourced: For example, the outsourcing of customer relations or sales.
It is increasingly common for European and North American enterprises to outsource some of their functions and processes to Asia. It has been estimate that by 2025, half of Fortune 500 companies may have an outpost in an emerging market. The converse is also true: Increasingly, Asia-based companies are outsourcing functions or expanding into Europe.
Learn more about the many benefits of outsourcing here.
Global Employment Outsourcing (GEO) means the international outsourcing of the ‘employer function’. This is also sometimes referred to as ‘outsourcing staffing‘. Note also that the firm that carries out GEO is often referred to as a ‘Global Employment Organization’ (also, confusingly, known as a ‘GEO’).
When expanding into another country, instead of employing staff directly in that country, you can engage a specialist GEO firm to become the ‘Employer of Record’ (EOR) for your workforce. This means that, while employees still report to your firm on a day-to-day level, the GEO firm takes on all the legal and compliance responsibilities of the employer. This includes withholding payroll taxes, administering benefits, and payroll.
A crucial element of your international human resources (HR) strategy needs to be a decision on which processes and functions to outsource.
How Is GEO Different from PEO?
Professional Employer Organizations (PEOs) provide a similar service to GEO firms. A Professional Employer Organization can also act as the EOR for staff. However, in some countries, such as the United States, PEOs operate on a ‘co-employment’ model. That is, both the client company and the third party take on some level of legal responsibility for employees. This means, for example, if a PEO fails to perform its legal duties in the United States, the client company may still be found liable. Sometimes, these PEOs are referred to as ‘domestic PEOs’.
In short, all GEO involves PEOs, but not all PEOs involve GEO.
GEO firms are often referred to as ‘Global PEOs’ or ‘International PEOs’. A Global PEO, as well as acting as the EOR for your staff, often provides a range of related global expansion services including:
For enterprises that seek to ‘go it alone’, and don’t need the ongoing support of a Global PEO. It is also possible to engage a Global PEO for global expansion consulting services.
What Are the Benefits of Global Employee Outsourcing?
Why should a company engage a GEO company, for its international expansion? Benefits of GEO services include:
For more information on the benefits of GEO/international PEO services check out 8 PEO Benefits That Will Help Your Business Expand Quickly, Compliantly, and Reliably.
Global Employment Outsourcing (GEO), also known as Global PEO, is often the best employment solution for international expansion. GEO firms are able to provide a package of services to comprehensively support an overseas expansion of your company. In addition to acting as the ‘Employer of Record’ for your workforce, they often provide other services including global mobility, recruitment, and entity (company) establishment support.
New Horizons Global Partners provides the full suite of GEO services. By engaging a GEO firm, you can ensure that your international expansion is cost-effective, flexible, and compliant. This leaves you to focus on growing your core business through your international expansion.