All entrepreneurs have a single goal and that is to expand their company to all parts of the world. If you want to achieve that, you must have different resources to be able to supervise your employees. Both full-time and part-time. This is because every good businessman knows how important it is to have a good workforce. Many companies offer Employer of Records (EOR) or Professional Employer Organizations (PEO) services. The question is, between PEO vs EOR, which is better?

In this article, we will help you solve the question of which is better if PEO or EOR. For this, it is important to know how to differentiate between these two concepts, so you can know which one best suits your company. Also, there are some differences between EOR and PEO. To know them and know how you can make the best decision, the following topics will be covered.

1. Do you know what is PEO?

PEO is a company that is associated with small and medium-sized companies to offer them comprehensive services related to human resources. In this way, businesses that need help hiring employees permanently in their local area use PEO companies. Among the tasks they perform are tax returns and payroll processing.

An international PEO will act as the outsourced human resources department of a company. In this way, other internal teams will have more time to develop their main activities. However, this is a partner company and is not the employer of your workforce.

Working with an international PEO will free you from activities related to human resources. However, your company will continue to be responsible for all legal and day-to-day operations.

2. Do you know what is EOR?

EORs are companies that assume all employer-related responsibilities for small and large businesses located in places where they do not have an entity. On paper, EOR will be the legal employer of your entire workforce. However, you will have the same relationship with your workforce as you would without an EOR.

EORs perform comprehensive HR-related tasks such as payroll and taxes. In addition, the specific incorporation of the locality and an unemployment claim report. If you want to hire the best talent quickly no matter where they are, having an EOR partner will help you easily enter almost any market.

3. Learn the most relevant PEO EOR differences

Knowing both concepts, it is time to know the differences between PEO vs EOR. In this way, although both manage the human resources functions in a company, they are not the same. For this reason, we will present the most relevant differences regarding PEO vs EOR:

3.1 The structure

PEOs are co-employers, meaning they are third-party company that outsources all of their organization’s human resources functions. On the other hand, an EOR is a company that is responsible for employing its workforce distributed in different areas where it does not have an entity.

If you have a PEO partner, your company will be the employer on the site and will have authority over decisions related to human resources. However, with an EOR partner, you will relinquish some control regarding decisions that are related to human resources. In the same way, this will be done with a reliable partner that will offer you great benefits and a local experience.

3.2 The risks

Because PEO is a co-employer, your organization will be exposed to certain job responsibilities. Among them is safety in the workplace. There is a possibility that a PEO can help you manage the risks. However, a PEO will not hold full responsibility for any hazard in the workplace.

On the other hand, as EOR acts as the actual employer of its workforce; it assumes all labor risks and responsibilities that are related to the services it offers.

3.3 Costs

In comparison to PEO vs EOR, we find that they structure their initial and long-term costs similarly. They often charge a fixed monthly fee for each employee or take a percentage of the monthly payroll. We found that a PEO may have an initial charge that is unique to establishing services.

Typically, a PEO is more expensive in the long run than an EOR. EORs cover the insurance and benefit your distributed workforce will have. In this way, you can save money and time. Having a PEO would make you still responsible for insurance and all benefits.

4. How can you decide which of the two services to hire?

Now that you know the differences between PEO vs EOR, you need to think about which one would be better for your organization. An easy solution is to choose the one that meets most of your long-term needs.

It is important to note that PEOs need a local business to be found operating and a joint employment contract to be signed. On the other hand, EORs will allow you to hire abroad even if you do not establish a local business or sign a joint employment contract.

5. When you make your decision, contact KinzaHR to hire the best PEO or EOR services

You have already decided between PEO vs EOR, if so, contact us and we will help you with everything you need. Also, keep in mind that in our blog you will find articles that may seem interesting to you. You can find information about mass recruitment and the challenges of this recruitment. Contact KinzaHR through our number +971 43 316 668 or by writing to the following email contact@kinzahr.com.

Now, if what you wish is to get that job you want so much in the Middle East, you have to enter The Talent Point. In addition, our team is made up of experts on the subject who will advise you to get this job. You can contact us by writing to contact@thetalentpoint.com and receiving more information.