A Global PEO can act as a critical part of your HR administration, but partner with the wrong one and you’ll wish you’d asked them a few of these questions up front.
The traditional way of expanding globally doesn’t work anymore.
Let’s say your organization wants to hire one person in France. This seems simple, but in today’s world it’s actually incredibly difficult.
First, you’d have to own a subsidiary or branch office, which means you’d have to find a reliable local payroll company, accountants, lawyers, and HR advisors. Then, you’d have to wait until your entity gets a tax ID and a bank account. You’d also need to set up benefits, as required in France, and figure out which collective bargaining agreement (union) your employees fall under.
While this work is going on, you’re going to need to make absolute certain your brand-new entity is compliant with local labor laws. The liability of making sure all the details are covered falls on you—not the in-country partners you’re entrusting with this sensitive, complex process.
Finally, in six months, maybe a year, and after several thousands of dollars, you may be able to hire and run payroll in-country. This assumes that the employee you want to hire hasn’t already found another job.
Enter the Global Professional Employer Organization (PEO) and accompanying Employer of Record platform. The Global PEO acts as your company’s “Employer of Record” for all your international employees.
Using its local subsidiaries or partner companies, the Global PEO legally acts as the employer in any location. All local legal matters, including HR matters, are managed via the Global PEO, since the employees legally are employed via the Global PEO’s companies. The employees are assigned to work full-time and exclusively for you. Thus, you have a global workforce, without having to set up a complex global infrastructure.
Evaluating a Global PEO is much more complicated than evaluating many other go-to-market partners because setting up and managing an international workforce involves so much more than simply “putting someone on the payroll.” Drafting a compliant employment agreement—including how to structure benefits, avoiding unforeseen pitfalls with local working conditions, and working through the market norm best practices—requires deep expertise in any one of dozens—sometimes hundreds— of countries. Having a partner who can help you understand the nuances, see around corners, and prevent the inevitable bumps in the road is critical.
Which is all the more reason to have questions ready as you feel out your potential PEO partner. But not just any questions, you need the right questions.
In Globalization Partners’ latest eBook, “Not All PEOs are Created Equal: 20 Questions to Ask Before Choosing a Global PEO” we’ll arm you with the questions you should be asking as you do your vetting.
Within our ebook, you’ll find questions that will help you uncover everything from hidden costs to the availability of advice, so you can establish what’s included and where there may be gaps. Download “Not All PEOs are Create Equal: 20 Questions to Ask Before Choosing a Global PEO today.”
(Oh, and don’t worry, we give you the correct answers, too.)