What is a Global PEO? Why HR Leaders should care?

In Dubai and the UAE, some entities allow companies to outsource certain processes and tasks related to employee management. That is to say, a global PEO is a service that assists employers in the hiring process and other tasks. However, the client is able to direct the day-to-day activities of the workforce, while PEO maintains record-keeping and maintains a global payroll service.

In this article, you will learn What is a Global PEO process of obtaining a Dubai Golden Visa and why it is so important. Similarly, you will fully understand the advantages and suitability of this service. That is to say, we will make sure that you understand why is sometimes better to use a global PEO instead of setting up a legal entity. Let’s observe:

  1. All you need to know about PEOs
  2. PEO services
  3. 4 advantages of Global PEOs
  4. Differences between Global PEO, EOR and GEO
  5. What if I am using a co-employment service in the USA?
  6. Why companies should hire a PEO service instead of setting up a legal entity?
  7. Differences between global PEO and global payroll service
  8. Who manages the workforce when you hire a Global PEO?
  9. No local incorporation is needed
  10. Differences between a Global PEO and HR
  11. How can ConnectHR improve your company’s processes as your Global PEO?

1.     All you need to know about PEOs

The main value of what is a Global PEO is that you can keep a highly motivated and competitive workforce; while you get rid of payroll issues and comply with local labor laws.

Firstly, a Global PEO is a ‘Global Professional Employer Organization’. This type of service allows businesses to outsource employee management and other specific tasks hassle-free. The PEO’s duty is to become the employer of record and hire the company’s workforce for tax and compliance purposes.

Consequently, the client is able to conduct day-to-day activities and to focus on important matters that impact the company.

Payroll is one of the most key processes inside a company, learn about the best payroll software in the market.

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2.     PEO services

Global expansion is always an exciting process for companies. In ConnectHR, we want you to feel at ease and in control during the entire setup process. These are the type of services a Global PEO offers to businesses in Dubai and the UAE.

  • Employer of Record: companies reduce the risks as your PEO becomes your Employer of Record (EOR). In addition, the global PEO is legally responsible for the legal payment of the international workforce, payment of taxes, and pensions as the local labor law requires.
  • Payroll outsourcing: payroll processes do not always have to be overwhelming. We have a team of HR professionals that will help your organization and take full responsibility.
  • Recruitment: global PEOs assist the business to build up their global workforce without having to worry about any complex employee and onboarding process by themselves.

We have an article about how having a highly skilled workforce will improve your company.

Global mobility: if the organization’s employees are needing visas or it needs to move the workforce to your country, we have a professional law team that will ensure your company complies with all requirements and immigration laws. We can help you, reduce, build up, or relocate your employees to the country of your preference.

  • International knowledge: global law is a delicate area when you want to establish businesses anywhere. However, we have a team of experts with in-depth knowledge of regulation, cultural practices, and international laws.
  • Support to help you achieve your goals: we will help you and your side by side with you and your company to achieve your business goals, in addition, to help your company’s growth.

3.     4 advantages of Global PEOs

This type of service has several benefits for the client, it allows the company to keep its business and customer needs as its main focus. In addition to this, there are four main advantages where clients benefit and where the Global PEO excel: cost, time, local compliance, and flexibility.

  • Cost: setting up a registered business in a foreign country is sometimes a gruelgiing and expensive process. However, with the practice of workers leasing, PEOs allow companies to hire local employees without the hassle and expense of setting a permanent local establishment. This service is of great help for every type of business because it hires compliantly and quickly.
  • Time: the main reason companies hire global talents is to construct a global footprint close to the market they want to approach. And in situations where time is short, global PEOs excel. Therefore, a global PEO gives companies the opportunity to surpass their competition, placing the workforce in a short period of time than what it takes to hire traditionally.  
  • Local Compliance: one of the stronger barriers new businesses face is to understand local payroll regulations, local labor laws, and mandatory employee benefits. That is to say, a global PEO takes care of your local payroll making you safe from legal trouble. Therefore, using this type of service allows companies to put aside these processes, allowing them to focus on important matters.
  • Flexibility: this service allows companies to hire their employees (not contractors) without setting up a legal entity in the country they want to approach. Instead of trying to understand local complexities on contractors, PEOs allow organizations to hire a workforce that can the job done, this creates a stronger workforce relationship more stable than temporary workers could offer.

4.     Differences between Global PEO, EOR and GEO

An Employer of Record (EOR)is an intermediary between the employer and the workforce. In addition, the EOR’s duty is to carry out the legal activities of the organization; employment, payroll, immigration processes, etc. However, the EOR does not participate in day-to-day activities.

Salaries are so important for employees, learn everything about salary certificates in the UAE.

The Global Employment Organization (GEO) is a legal global entity that uses Employees of Record in countries they want to settle in. That is to say, these GEO services begin the business relationship with the companies; after that, it refers the workforce to the local EOR for onboarding and payroll.

The GEO’s role is to supervise the client/EOR/employee relationship, and their role is to make sure that there are no legal issues and all deadlines are met. That is to say, there are single GEO entities, and usually, EORs employ locally in host countries.

     5. What if I am using a co-employment service in the USA?

This practice of co-employment in the United States of America is different from what is a Global PEO service. However, this type of service is known as PEO and it requires that the company is a registered entity in the country; this makes the PEO process all taxes payments and liabilities. In addition, all compliance liabilities still must be enforced by the company.

      6. Why companies should hire a PEO service instead of setting up a legal entity?

Establishing legal entities in any country is sometimes a complex process; it comes with legal liabilities and several tax obligations including:

  • Annual financial report.
  • Nominating local directors.
  • Ensure that the company complies with local requirements overall.

However, there are several cases where the company must establish a local entity to set up its business in any country. Likewise, sometimes it is better to not set up a local organization in the new country when you are establishing in it for the first time. Similarly, discharging employer obligations and understanding labor laws is a complex and time-consuming process.

In addition, payroll mistakes may cause legal trouble, employee disappointment, and bad publicity. There are several rules of thumb for when the business is ready to change from a Global PEO service to the ‘payroll’ option.

We have an article about manual vs automated payroll if you want to learn about it.

To sum up, a global PEO service is the perfect solution when companies want to establish in a new country.

       7. Differences between Global PEO and Global Payroll Service?

Payroll is a process that includes:

  • Calculating the workforce earnings.
  • Withholding correct income and social taxes.
  • Managing bonuses.
  • Commissions and expenses.

In other words, it also involves making payments to all partners, keeping track of worked hours, and paid time off.

However, the process is the same in every country but with different levels of complexity. Labor laws and taxes vary from country to country. Keeping track of different spreadsheets, several data streams, and expense accounting in different units of measure and in different languages is an overwhelming process.

When a company establishes in a country as a local entity, global payroll is used to differentiate from the global EOR/PEO when they use a third-party business for the employer of record service. However, both processes have the same agreements.

     8. Who manages the workforce when you hire a Global PEO?

A global PEO in the UAE service is a straightforward layer between organizations and their employees. This type of entity ensures that all legal compliance is met in regards to the hiring process of the client’s workforce. However, the day-to-day management activities in the workplace is conducted by the employer.

      9. No local incorporation is needed

When companies choose a DIY approach when they settle in a new country, they must complete the registration and legal tasks. Likewise, this process is time-consuming since it requires knowledge and legal support in order to comply with local laws.

Some businesses justify time and expenses when they establish a foreign subsidiary, sometimes is a better alternative for businesses in several industries. The Global PEO assist companies that want to establish in the UAE with:

  • Payroll.
  • Workforce management.
  • Immigration requirements.
  • Local laws compliance.
  • Hiring process.
  • Taxes.

      10. Differences between a Global PEO and HR

The HR department is your in-office management team that will handle employment in your home country. Likewise, a PEO service will support you internationally. With our hiring processes we assist your company with:

  • Finding the best workers for the role.
  • Employ highly skilled individuals.
  • Onboarding process.
  • Managing your global employees.

Make sure to learn why a Human Resources Management System may improve your company.

Our tech-savvy team will create a strong relationship between your company and your new employees. Likewise, workforces are the foundation of every type of business and we will make sure you conquer new markets worldwide. 

       11. How can ConnectHR improve your company’s processes as your Global PEO?

Now that you have learned all the important information about What is a Global PEO, its advantages and how it can improve your company. The next important step is to find the best businesses partner that helps your company in Dubai and the UAE. With ConnectHR working with you side by side, your business will grow efficiently.

Above all, our main focal point is to provide companies in the UAE with the greatest professional services, such services will ensure your business run smoothly in the next areas:

  • Time Management
  • Productivity
  • Reduction of errors
  • Automation
  • Keep your workforce motivated.

Most importantly, if you want to improve the HR department of your organization, you can request HR insurance, consultancy, or attendance. Similarly, we have services so you can get rid of tricky processes: HR management systems, WPS, and payroll systems.

 Having motivated employees is a good sign of the future, learn why attendance is important for companies.

In case you want to use any of our services, we will make you’re your company grows in an efficient way. Likewise, you can easily acquire any of our services for yourself or your company.

Since 1998, we have been working with businesses in the UAE providing them with the best-streamlined solutions and services.

Would you like to contact ConnectHR to discuss any of our services?

If you have any inquiries, call us on +97143316688 and you will talk to one of our agents who will kindly answer all of your questions.

Author avatar
TIMOTHY PATRIDGE

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