If you’re hoping to expand into a new market, chances are you’ll be hiring some workers on as part of your team. Employment management is a challenging task in almost any company, even when you’re only managing workers in your home country.
When you move to a new market, you may find compliance, insurance, and even payroll present new challenges. You know you will need a partner with the expertise to help you manage everything, but should you hire an employer of record or a professional employer organization (PEO)?
Determine Your Needs
The first question you should ask yourself is what you need help with the most. If you need help hiring people for your business, an employer of record might be the right choice.
If, on the other hand, you find you need more help with maintaining compliance or administering payroll, then a professional employer organization (PEO) could be the right fit for your business.
When you work with a PEO, you retain control over hiring and termination. The PEO becomes more like a co-employer.
An employer of record, on the other hand, assumes full responsibility for hiring and termination. Some employers like this arrangement, since it reassures them that HR tasks are being handled by the experts. Others feel it gives them too little control over who is working for them.
Thinking Long-Term vs Short-Term
Another way to think about the employer of record vs PEO question is to ask if your concerns are short-term or long-term.
If you’re looking at short-term hires or temporary employment, then working with an EOR may make the most sense.
If you’re thinking about hiring permanent employees to work for your business, then a PEO partnership could serve you well. The PEO can help you manage compliance, look after insurance, and administer payroll. If you know employees are only going to be with you for the short-term, you may not want to sign up for payroll services on an ongoing basis.
What Is Your Expertise?
If your team is full of hiring and recruitment experts, you may not need much help with this task. Additionally, you might want to retain control over the hiring process to make sure you’re finding people who are a good fit for your company.
You might find that you need more help with other HR tasks, such as compliance or payroll. As mentioned, working with a PEO could be the answer. The PEO provides an expert team to help you with everything from insurance to compliance to advice on benefits and procedures.
If you’re unsure your HR team is equipped for hiring or terminating employees in the new market, then working with an employer of record should be an option you explore.
Looking at the Bottom Line
One question that comes up when business leaders try to decide whether they need employer of record services or the help of a PEO is the price point. Will one service be more affordable than another?
In many cases, it comes down to what the business requires. The price of either EOR or PEO services will change with what you need.
For some businesses, the PEO will be the right fit. You retain more control, which can be important when it comes to hiring the right people for your business. Their expert advice assists in maintaining compliance in different markets, but it also gives you the opportunity to synchronize your policies and procedures.
With an employer of record, on the other hand, you can rest assured that hiring tasks are being taken care of by an expert team. You also know that your compliance will be top-notch thanks to the EOR’s expertise.
Finding the right services for your business just takes some evaluation of your business needs. Still unsure? Talk to the experts today.