How do PEOs help businesses?
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Traditionally, international companies wanting to establish a presence in the UK must undergo a long and complex process that takes time and money. But today, they have a better option – a professional employer organisation (PEO). With the help of a PEO, multinational corporations can avail of various services to help them set up in the UK in a legal, safe, and quick way.
What is a PEO?
A PEO, or professional employer organisation, is a form of full-service human resource outsourcing. Another term for it is co-employment, where the PEO performs different employee administration tasks, such as benefits administration and payroll, on behalf of the client. However, the services PEOs offer vary, so it is important to get in-depth information about providers.
Using a PEO allows international companies to hire employees worldwide and pay them locally. A PEO relationship is a simple and safe way to offer compliance-assured HR tasks for employees willing to work for an overseas organisation. A UK PEO can hire and manage employees within hours for global clients that want to conduct business in the country.
A professional employer organisation is a third-party provider of HR services that manages regulatory compliance or hires on behalf of an international company. It often stands as an Employer of Record, allowing the foreign company to enter the market more flexibly and avoiding the onerous and costly administrative requirements of establishing a branch or subsidiary.
Why work with a PEO?
A PEO can provide a client with expert, strategic guidance. It can help you grow your business in the target location, such as the UK, and feel secure that your organisation is protected. The PEO can help you in several ways.
- It handles regulatory compliance. A PEO typically has a team of legal experts. Setting up a company in a foreign place is difficult, and the PEO’s legal team understands all the laws and regulations you must meet to establish your company.
- Your entry into the UK market is faster. Working with a PEO allows you to operate in the UK after a few days.
- It streamlines the company structure. Working as your co-employer, the PEO provides you with a single point of contact while enjoying the services that usually take a team to provide.
- Efficient HR functions. Many companies do not have the budget or number of staff to operate an HR department in another country. The PEO provides all the HR services you need to make the department operate efficiently.
PEO versus company incorporation
Incorporating or registering as an overseas company in the UK is complex. There are forms to fill up and fees to pay. You also have to submit the required documents with detailed corporate information. You need financial, legal, HR teams, etc., to handle the various requirements. The entire process can take months.
In the meantime, a UK-based PEO can work as your co-employer or employer on record, which allows you to bypass several administrative hurdles involved in incorporating your company. Even without a legal entity, you can start operating your company.
In a co-employment relationship, you and the PEO share specific employer responsibilities. You focus on your core business responsibilities to establish your company in the UK while the PEO handles HR functions.
