What is a Professional Employer Organization (PEO)?
A Professional Employer Organization or PEO essentially signs a co-employment agreement with foreign companies to be able to hire remotely in overseas markets. A PEO partners up with companies to undertake every HR process or function they need for outsourcing, including:
- Recruitment, hiring, and onboarding
- Compensation package development and payroll processing administration
- Implementation of statutory and supplementary benefits
- Ensuring compliance with local labor laws
In the co-employment agreement, the client and the PEO split and share responsibilities and liabilities for hiring, managing, and paying remote employees. For companies looking to leverage outsourcing to scale their business, PEOs offer a way to safely circumvent one of the most pressing hurdles they face: compliance. PEOs ensure that HR processes and functions needed to run by their clients are fully compliant with local labor laws. Offloading this concern to a trusted PEO partner lets companies focus on other areas of business or accelerate the building of globally distributed teams without worrying about compliance.
Without the use of PEOs’ in-country legal expertise, companies planning to outsource to Ghana and other international markets would need to muster their own in-house capabilities relating to compliance. With every new remote team set up in another country, their in-house compliance team would need to be able to address that market’s distinct local employment legislation. If that sounds like a tall order, that’s because it is. What companies often do is rely on a PEO to handle compliance.
In Ghana, you’re looking to access a workforce of over 13 million people in one of West Africa’s key outsourcing destinations. Solid government support for the development of the country’s outsourcing sector has proven appealing to foreign investment, and remote working is quickly being embraced by many in the region, especially after the pandemic lockdowns. All of these are favorable factors pointing towards Ghana’s continuing maturation into a top outsourcing destination for Africa.
For companies looking to secure a piece of the pie, compliance is a significant and ever-present hurdle. This is why PEOs are highly sought after to address local labor laws.
What are the benefits of using a PEO in Ghana?
HR administration and management is work- and time-intensive, and outsourcing it to a reliable partner will already net gains in terms of lowered overhead costs. What makes PEO services in Ghana stand out, however, is the role they play in local labor law compliance.
- PEOs ensure compliance with Ghana’s labor laws: Labor laws in Ghana govern practically all aspects of employment practice in the country. This spans everything from recruitment to compensation. Consequently, non-compliance with mandatory guidelines opens up foreign companies to potentially hefty penalties and legal fees. It also strains their relationship with the talent they work so hard to attract and retain.
- Payroll processing and tax filing: Among the most tedious and work-intensive aspects of HR management are also some of the most important: payroll processing and tax management. The right PEO can make payroll and taxation much more efficient, as well as completely compliant with the strict statutory guidelines set by local labor laws. With these HR functions streamlined and compliant, even outsourced employees benefit through payments that are not prone to inaccuracies and delays.
- Risk mitigation: As a PEO in Ghana guarantees compliance with local labor laws, they serve to protect their partners from a lot of the risks inherently associated with hiring, managing, and paying outsourced workers. A reliable PEO can also extend legal guidance to cover more complex concerns such as the nuances of local worker classifications and even IP protections.
- Administration of competitive benefits: PEOs can also help draft competitive benefits to round out compensation packages that attract the right job seekers. Employees in Ghana are entitled to a minimum set of benefits as prescribed by local labor law, but competitive packages need to not only meet minimum standards — they should match market and industry norms.
- Employment cost mitigation: Through all of the above, a reliable PEO in Ghana can greatly reduce what would otherwise be snowballing overhead costs if all these concerns were managed in-house. This cost reduction not only multiplies every time new employees are onboarded but also includes potential costs from penalties that are avoided due to strict compliance.
Take advantage of Skuad’s services in Ghana to reap the same benefits and focus your energies on actually building globally distributed teams instead worrying about compliance.
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What are the differences between an EOR and a PEO?
Like a PEO, an Employer of Record (EOR) also enables foreign companies to outsource overseas, but there are important differences. As a high level guide, below are the differences between an EOR and a PEO in Ghana.
|An EOR is the legal employer for any hired workers — not its client.
||PEOs and their clients are co-employers, flexibly splitting and sharing liabilities and responsibilities between them.
|As the sole legal employer, EORs handle all the HR processes and functions required for ongoing engagement with hired workers from onboarding to payroll.
||PEOs can flexibly extend what HR functions and processes they handle as they essentially share these with their clients. In effect, clients can dictate a PEO’s involvement in HR management.
|EORs hire on behalf of their clients, so the clients themselves do not need to register a local entity for HR purposes.
||PEOs are co-employer, so clients need to establish a local legal entity that can legally hire employees.
|Performs all contract and agreement drafting on behalf of their clients.
||Clients perform contract and agreement drafting with assistance, where required.
Hiring in Ghana with a PEO
Ghana’s appetite for foreign investment is reflected in the local government's push for the growth of IT infrastructure and upskilling of its workforce. Over the last decade, in fact, the country spent 25% of its yearly budget on free education to bring up the next generation of its workers. The result? In 2019, Ghana became home to Google’s Artificial Intelligence center in Accra — a clear show of confidence in the technical potential of the country’s talent.
If you want to access that talent, of course, you need to successfully navigate Ghana’s local labor laws.
Employment practices in Ghana are governed by local labor laws, collective agreements, and contract specifics. The collection of mandatory guidelines span every aspect of employment from compensation to leaves, taxation to employment security. Few companies will have enough in-house resources or capabilities to stay compliant with all these regulations not just in Ghana, but also in every other market in which they want to outsource. Companies partner up with providers like Skuad to ensure that they’re not only compliant today, but in the future as well, wherever they may need to stay compliant.
Let Skuad’s services in Ghana act as the springboard for your efforts to build globally distributed teams that are 100% compliant with local labor laws.
Payroll in Ghana is challenging. It’s easy when you use a PEO.
Payroll processing is a tedious, often complicated process that is strictly governed by local labor laws not just in Ghana, but all over the world. After all, it’s a unique function that handles sensitive data as well as financial information, and it forms the very foundation of the working relationship between employer and employee. Any inaccuracies or delays in payroll have an immediate effect on the workforce. And of course, any noncompliance may swiftly be penalized with fines and legal fees.
So it’s understandable that for many foreign companies outsourcing to the country, running payroll in Ghana through in-house means is a nonstarter.
And if they try, they get bogged down in constant compliance concerns and allocate precious business resources to this singular task so much that company growth can effectively be stalled. This is a key reason why finding a reliable PEO partner is a strategic priority.
Leveraging Skuad’s global HR and payroll solutions, for example, addresses all these concerns under one platform. Better yet, clients can flexibly expand the services they require when they need them to fuel aggressive growth.
Request a demo from Skuad’s experts for more information.
What a PEO in Ghana can and cannot do for you
Signing on with a PEO under a co-employment agreement is definitely a huge business decision. You need to clearly know what you’re going into to be able to make an informed choice.
A PEO can
- Manage payroll processing and administration for remote team members in Ghana
- Assist with the recruitment, onboarding, and management of talent in Ghana
- Reduce a lot of the overhead costs that come with managing outsourced workers and at the same time shield their co-employment partner from a lot of compliance risk
A PEO cannot
- Hire employees as the sole legal employer on your behalf
- Take full control of your company
- Be the sole decision-maker for hiring and terminating your employees
Businesses big and small can find value in partnering with a PEO in Ghana.
Clearly, compliance is the foundation that lets you build globally distributed teams in Ghana and and other attractive outsourcing destinations all over the world. What you need is a reliable PEO partner to whom you can offload the compliance concerns, and who can also offer you a streamlined platform you can use to aggressively build more remote teams for business growth.
What you need is Skuad’s centralized HR and payroll processing services, which removes a lot of the stress in hiring, managing, and paying remote workers. Skuad empowers your organization to effortlessly hire, onboard, manage, and pay employees in Ghana 100% in compliance with local labor laws. Book a demo with Skuad today.