Business Without Borders; How is borderless employment transforming the working world?
Whichever way you look at it, the world is becoming increasingly more connected, and globalization coupled with the Sharing Economy has introduced employers to the prospect that they should employ based on talent, and not on location. Combining expertise across the globe without the limitations of borders is boosting innovation and saving international businesses significant time and money, but what is the most effective way to embrace this in the modern working world?
An International PEO is a model that allows organizations to expand globally and strengthen their internal teams with global talent, through the outsourcing of employing and payrolling foreign employees to a PEO provider.
A PEO generally provides HR, payroll, workers’ compensation, and regulatory compliance assistance. Through providing this combination of services, their clients often see improvements in productivity, profitability, innovation, and focus on their core aims.
Payroll Companies – What’s the difference?
To put it simply – a Payroll company is typically targeted towards the contracting community and is focused on a worker’s financial arrangements, with their main objective being to ensure timely payments. A Payroll Company would not typically onboard employees into their payroll, and do not make arrangements to ensure that a worker’s welfare and benefits package are taken care of.
A PEO provider functions as the legal employer of their client’s employees, meaning that the client doesn’t need to open their own permanent entity in-country. PEOs work much closer with their clients and take substantial steps to ensure that an employee’s welfare is considered – ultimately boosting the employees security and stability. PEOs can ensure that companies can locate and most importantly, retain the best workers globally.
Most companies would agree that having the right talent in the right jobs is vital for their continued growth and success, and with a substantial shortage of skills and growing competition for global talent, new recruiting processes are being implemented all the time.
Apart from trying to attract the right talent, it is getting equally important to retain the best talent. PEOs, and the benefits that they offer employees, significantly help with retention. Therefore, many companies are choosing the PEO model instead of hiring a remote workforce through any other hiring model.
By offering an employee the benefits of job security and stability associated with employment, companies of all sizes can compete for the best global talent that might not otherwise be available to them.
Where does this fit in with the new working world?
The ‘Sharing Economy’ is the latest buzzword of the moment, and it refers to an economic peer-to-peer model of sharing assets and services through a platform. The Sharing Economy model has been adopted by some of the biggest companies in the world including Uber, Amazon and Airbnb. This is because it presents a streamlined process to deliver services for both the provider and the seeker through a global model, benefiting all parties in the supply chain.
PEO providers adopt the Sharing Economy model by acting as the platform that connects the employer and the employee outside of border constraints. PEOs significantly simplify an employer’s ability to establish themselves into new markets, embrace new expertise and ultimately grow their business.
The National Association of PEOs (NAPEO), released a new study on September 17th 2019, following their annual conference, which found that companies utilizing a PEO provider expected an average Return on Investment of 27.2%. They calculated that PEO clients had significant savings in five HR related areas including:
- HR Personnel costs
- Health benefits
- Worker’s compensation
- Unemployment insurance (UI)
- And other external expenditures relating to HR services (payroll, benefits, etc.)
With the working world growing more connected, we can conclude that a PEO presents the most efficient, cost-effective and rewarding option for organizations who are looking to expand their operations into new territories.
If you are an organization looking for a PEO, learn more about the services that Procorre offer here.