If you are looking to expand your business, you will come across Professional Employer Organizations (PEOs) that cater to the expansion needs of businesses. Many entrepreneurs and start-ups get confused by the different types of PEO and wonder if it is the right choice for them. That is why it is important to know the difference between domestic PEO and global PEO; it will help you make an informed choice.

Understanding Domestic PEO
A domestic PEO handles certain HR responsibilities for other businesses. These responsibilities are outsourced and can include payroll, benefits, training and development, compensation, and risk management. The domestic PEO functions as a joint employer, who takes on employee management of your staff. However, your company is still responsible for the employees and allocating work and assignments.

A PEO works for several clients simultaneously and hence, it can offer competitive rates. It clubs all employees from different organizations into one group and that enables it to get bulk discounts and provide cost-effective training, health insurance, compensation, and HR services.

It is important to note that in some countries, such as France, domestic PEOs are illegal. However, in the US, the UK, and in Asia, businesses can easily collaborate with a domestic PEO and ensure that certain HR functions are handled without worries or added expenses.

Why Use Domestic PEO?
If you want to focus on building your business and growing it but do not want to handle certain operational tasks, it makes sense to collaborate with a domestic PEO. It reduces employee turnover and also allows businesses to grow and expand without worrying about staffing and other HR responsibilities.

It is important to note that you still need to register your company and create a legal entity. Also, you will be liable for employment contracts and other legal responsibilities.

Understanding Global PEO
A global PEO is quite similar to a domestic PEO but handles more than the outsourced HR tasks. A global employment solutions company helps organizations that are looking to expand internationally. So, if your company is looking to hire employees in an overseas location where you do not have a legal entity, you can easily do so with the help of a global PEO.

When you choose global employment outsourcing services, your organization does not have to open a subsidiary or a legal entity in a foreign country. This saves a lot of time, effort, and money. The global PEO not only ensures that your international staffing needs are met but will also provide other services, such as handling visa and work permits, managing payroll, compensation, and benefits, and ensuring that your organization is in compliance with the HR laws in the foreign country.

When Should You Use Global PEO
Your company should look to collaborate with a global PEO when you want to hire a talented candidate in a new country. In such a case, it makes sense to choose a company that offers employment solution services so that you do not have to set up a legal entity or worry about compliance.

Also, if you are expanding your business into a new country but the cost of setting up a legal entity is high and you are unsure whether the new location is the right choice for your global expansion strategy, it is best to collaborate with a global PEO. Another reason is when you are entering a hypergrowth market but it will take you a long time to set up a legal entity in that market. When you collaborate with a global PEO, it will enable your company to be up and running within no time.

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