International or local PEOs: what’s the difference?
As a business evolves, so too do their needs and customers. At one stage in your business’s life, you might consider increasing your local footprint in your country, or you might look to expand globally. Either option will present itself with both opportunities and challenges, which is why many businesses choose to employ the help of local or international PEOs (Professional Employment Organisation) to help them along the way.
There are two main types of PEOs; a Global PEO (also known as an International PEO) or a Local PEO (or Domestic PEO), and there are inherent differences between the two.
What is an International PEO?
An international PEO operates in multiple countries, although they tend only to have one office based in their origin country. Your international PEO would then become your employees’ Employer of Record across the globe.
If you’re wanting to expand into multiple countries and only wish to use the one supplier, then you might be inclined to approach an International PEO. Although, there are limitations to using a PEO that isn’t actually based in the country you’d like to expand into, which we’ll cover a little further down.
What is a local PEO?
A local PEO (or Domestic PEO) is one that operates in one country and serves only businesses looking to expand into that country. They’ll have one head office with a team of dedicated HR experts serving the local market.
Just like an International PEO, they’ll take on a business’s employees in the local market as their Employer of Record, and perform specific HR tasks, without the client company having to set up a local entity in the country.
Local or international PEOs | Which one should I choose?
Both International and local PEOs offer a level of convenience and efficiency you won’t find anywhere else for your international expansion, but International PEOs do have several limitations you should be aware of.
Firstly, an international PEO doesn’t have the level of familiarity to a market as a local PEO, who’ll have robust systems in place to receive real-time employment legislation changes, as well as changes in working conditions.
An international PEO may also partner with a local PEO in the country you’re expanding into in order to place your employees. Which means you’re ultimately going with a local PEO, but likely paying a higher price for it.
A local PEO is on the ground in your country of expansion and work on the same or similar time zones to your employees. What this means is that they’re able to offer a level of support to your workers when they need it the most.
Because International PEOs operate in a number of different countries, they often don’t offer the level of personability and care as smaller, single-market firms. At Australia PEO, we’re often approached by disgruntled company directors expressing distrust and dissatisfaction with major global PEOs who have made them feel like a number in their long list of clients.
At Australia PEO, we know that expanding into international markets can be daunting and risky. So, by partnering with a local PEO such as Australia PEO for your Australian expansion, we not only become an extension of your business, but we offer a level of support and customer service to both our co-employees and your international teams that simply can’t be achieved with an international PEO.
Are you looking for a local PEO to assist in your Australian expansion?
Speak to our expert team of HR professionals to find out how partnering with Australia PEO will ensure your Australian expansion is one of success.
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