Global PEO vs. Umbrella and Payroll providers

What is International PEO, how did it appear and what differs it from other methods of hiring and compensating foreign workers? On a basic level, global PEO service or global employment outsourcing, umbrella and payroll services are precisely what it sounds like: a third party provider that helps businesses expand globally and/or strengthen their internal teams with global talent by hiring and payrolling international workers on their behalf.

Notwithstanding the similarities among the three methods, you’ll probably nevertheless use each of them in different situations to help meet the three very different needs you may have. It is advisable to carefully analyze the differences between the three solutions in order to choose the best option.

Umbrella companies take care of payments to independent contractors. Ideally the contractors need to be self-employed in order to get paid via an umbrella company. Umbrella company however cannot onboard workers on its payroll. Umbrella companies don’t make arrangements to ensure workers welfare is well taken care of during the time they are on their assignments. Besides, they do not decide with the employer to offer parental or holiday leaves. Their objective is only payments. In terms of Umbrella company, it acts as employer to different individual contractors and pays them through PAYE (pay-as-you-earn), that is the employees’ salaries are first taxed before the payments.

Most of payroll service providers will do monthly salary payout to your employees on your behalf. However, you will need to be a legal employer that would bear all employment risks while outsourcing the payroll function. Using Payroll provider services, the client’s employees do not become the payroll provider’s employees. It’s an option suitable for companies that need to outsource the accounting tasks.

With international PEO solution, you can legally employ and compensate global workforce in literally any country of the world without the need to be a legal employer and/or open your own company to hire foreign personnel. In other words, you can outsource a complete global HR cycle and grant the risks and effort to a PEO provider. Apart from paying all statutory contributions, you can provide additional benefits in order to retain top employees. A global PEO would handle for you all administrative costs, business travel, fuel expenses, accommodation, office rent, medical and life insurances, and pension fund deductions.

International PEO emerged as a reaction of the HR sphere to the development of the sharing economy that separated international employment from contracting workforces. Global PEO helps businesses that go global meet their growing hiring needs as easily as they would in their home countries. It has become a core of many international companies’ HR strategies in the sharing economy: global 100% compliance for talent beyond borders. The main advantage of Global PEO is that it helps companies with work permit and immigration support, which any other company doesn’t do, as the sponsor would need to employ the worker further after the work permit is issued. Moreover, it protects the overseas employee from any kind of mistreatment or any unpleasant coming from the employer.

Most successful businesses such as AMAZON, AIRBNB, and UBER use the business model of the sharing economy and so far, they are top in the industry. Ready to become a successful international company through our International PEO solution as an integral part of the sharing economy for the employment field? Let’s talk.

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