When businesses go international, it involves dealing with multiple complex issues. One aspect that cannot wait is hiring the right employees in the foreign land. But, hiring internationally is not an easy job. Companies often plan to transfer employees from their existing setups to the new office. That also involves dealing with various complexities – not an aspect that one can handle all independently.
A global PEO service provider has an extensive global reach – through its large in-house team and with the help of advanced technical aids, it can hire and onboard employees in multiple countries with ease and at lightning speed. Sometimes the global PEO provider has a network of reliable partners who offer regional assistance – it is a business model where the PEO subcontracts to its partner vendors in other countries where it does not have a presence.
Choosing between the former and the latter could be a tough call. It is a choice between going with a PEO provider with its in-house team versus a PEO provider who subcontracts. Generally, it is the former that is a safer option of the two. Why?
Your business is completely dependent on the Global PEO to get over with the recruitment work. They need to be fast and accurate. No aspect of compliances can be missed here. The local and international labor laws have to be aligned with the last detail too. Hence, a PEO that has a full-fledged workforce in-house is a better prospect. In this format, the PEO service provider has more control over the end product and deliveries. The service provider also ensures the quality of service, prompt deliveries, accurate documentation as required by the law, and overall, there is an assurance that every aspect is being handled as per the standards required in the geographic region.
When working with sub-contractors, there is always the risk of average quality being served out. However, there might be no other option in some countries than going ahead with a PEO firm with local partners. That is fine, but to a certain degree only. Only if necessary and in the absence of any viable option should this particular model be signed up. The risks of under-performance and not meeting all the compliance will always loom large on your business.
One aspect that should be mentioned here is the credibility of the Global PEO Service provider. Suppose the company has a flawless reputation and has received commendable testimonials from its clients, across industries and regions. In that case, you can trust the service provider even if they work on the latter model. After all, it is their internal process and completely depends on how well the management can get qualitative work out of the sub-contractor.
The right way is transparency. Ask the PEO on which model works in the given regions of your expansion. Ideally, a dependable Global PEO organization will have about 60% to 70% of its in-house professionals and the remaining filled up by sub-contractors. Assess how well-balanced the service provider is before taking the decision.