Domestic PEO Vs Global PEO:
What’s the difference and which is right for you?
When businesses are ready to expand, they face a whole new wrath of challenges. Entering new markets, whether that be domestically or internationally, requires the right planning and process.
Mark Baggs
Head of Global Expansion
To carry out business expansion, organisation’s usually explore both domestic and international expansion strategies. Both options come with significant benefits. However, it’s important to be aware of the differences, and establish which one is best suited to your business’ needs. To help clarify, we are going to be exploring the differences between a Domestic Professional Employer Organisation (PEO) and an International/Global PEO.
Usually, we hear the term PEO being used for both service offerings. However, there are some fundamental differences with how they can help businesses overcome different expansion hurdles.
What is a domestic PEO?
This is a service that enables businesses to outsource their HR and other employee related administrative tasks like payroll, taxes, benefits, employer compliance and risk management.
Working with a domestic PEO still allows businesses to manage their employee’s day-to-day activities, whilst the PEO handles functions like regulatory, compliance and tax-related duties.
Who is this for?
A domestic PEO typically works well for small businesses, as the PEO is generally able to provide more competitive benefits packages including training, compensation, and health insurance. This is because they can place all their client’s employees together, allowing for a lower cost.
A study by NAPEO found small businesses that used a PEO grow 7 to 9% faster, have 10 to 14% lower employee turnover and are 50% less likely to go out of business. With less time being spent on HR and employee-related admin, businesses can focus on a successful expansion strategy.
What is an international PEO?
Working with an international PEO allows organisations to enter into a new market abroad, without having to set up an entity. This is beneficial for companies who do not have the time, staff or resources to do this themselves. Other names you may have heard for this service are Global Employment Outsourcing (GEO), or Employer of Record (EOR).
Working with an International PEO, they offer pretty much the same services as a Domestic PEO, but with a focus on expanding into another country. An International PEO enables this through outsourcing their employment to a local in-country partner in that region.
This allows businesses to be able to test new markets. Both setting up and closing an entity in another country can be an expensive and time-consuming process. By using a PEO you can do this without that cost, meaning testing new markets can be carried out much easier, quicker, and cheaper. It also means, like the Domestic PEO, that organisation remains in control of the day-to-day management of their employees.
Grow your company with a PEO
At Gibson Watts Global, we can make your business expansion easy and seamless. With our help, your business can hit the ground running in whatever market you choose. With a streamlined HR process and all of your businesses’ compliance and tax-related issues taken care of, you have time to focus on growing your businesses and refining your expansion strategy. Contact us today to start your business expansion journey.