What Is Professional Employer Organization (PEO) Software?

A professional employer organization (PEO) is an outsourcing firm that provides HR solutions for companies and acts as a co-employer in areas where your company doesn't have an established business entity.

This means that while your company retains control over the employee's day-to-day activities and interacts with international employees just as you would with any other remote employee, the PEO handles all aspects of employee payroll, taxes, and HR solutions.

This division of employee management means that when you partner with a PEO like Skuad, both companies are legally responsible for international employees.

PEO software companies are designed for businesses who want to seamlessly scale their organizations while remaining compliant and avoiding the pain points of hiring employees in foreign countries.

Partnering with a PEO software firm is advantageous for a number of reasons. Small businesses choosing PEO services typically grow at a rate between seven and nine percent faster and save roughly 27% in costs, on average, than those that do not.

By using a PEO software partner, your company can focus on growing your team and hiring the best talent across the globe without having to worry about establishing legal entities or remaining compliant with local employment laws in the countries where you plan to operate.

What Does Professional Employer Organization Software Do?

PEO software can offer your company a host of benefits and relieves much of the pressure and confusion of hiring international employees.

Although partnering with a PEO like Skuad doesn't relieve your company of legal liability when internationally scaling your business, our local experts offer knowledge of the ever-evolving compliance requirements in the 160 countries we serve.

Continue reading to understand better those aspects of scaling your international business with which PEO software can assist you.

Hiring International Employees

The first step in international expansion is hiring full-time employees and independent contractors living abroad. Utilizing PEO software services provides your company with legal expertise in your country and the countries where your prospective employees reside.

A PEO can help you establish subsidiaries in whichever foreign countries you expand. You can hire new employees and remain compliant in all aspects of onboarding, including:

• Drafting employment contracts
• Assisting with any necessary work permits and visas for foreign employees
• Local minimum wage
• Social security
• Payroll taxes

Onboarding

Onboarding is a tedious and time-consuming process for your HR department. By partnering with a PEO, you can streamline and standardize your onboarding process as you hire more employees across the globe through a single platform.

Skuad helps your company onboard new employees and independent contractors by collecting and managing all necessary documentation in our secure, easy-to-use platform, including IP protection.

Use this same platform for all aspects of managing independent contractors, including invoicing, ensuring uniformity as you scale your business to more global markets.

Payroll & Benefits

Working with a PEO allows your company to pay international employees seamlessly and compliantly. A PEO can ensure that foreign employees file all necessary tax documents and are paid in the currency of their choice.

Different countries have different payroll laws, and utilizing a global employment solution like a PEO is the best way to ensure that your company isn't mistakenly paying employees incorrectly, which can result in hefty fines, back-pay, and more.

Furthermore, partnering with a PEO provides you with local experts who can help your company better understand any cultural differences, assisting you in creating appropriate and comprehensive benefits.

Employee Management

Even after getting over the hurdle of hiring your first employee in a new country, your company will need to remain compliant as long as it operates in that foreign country.

This means staying abreast with local labor laws as they change and evolve and continuing to offer foreign employees a minimum wage and benefits package that is current with the local minimum standards in their country of residence.

Partnering with a PEO can ensure that your business compliantly manages workers in all aspects of employment, including:

• Payroll taxes
• Work visas and permits for foreign employees who are currently residing outside of their country of origin
• Offboarding, including remaining compliant with local termination laws
• Local payroll and benefits laws, including minimum wage, overtime, paid leave days, and more

Security

One of the primary concerns many companies have when they scale their businesses globally is keeping them secure and private.

A perk of having all of your employees in one place is that you can use an internal software system that mitigates any risk associated with personal computers and more. However, this limits your ability to hire candidates that don't reside in areas where your company operates.

Partnering with a PEO can help keep your company secure as you scale across multiple countries. Skuad's platform ensures that all employee and employer documentation is kept in one secure location.

When You Should Use PEO Software?

Utilizing PEO software is beneficial for any company that plans to work with independent contractors or hire employees who reside outside of the country in which the business is currently operational.

PEO software companies are designed to mitigate risk for globally scaling companies. They can provide your business with the necessary local knowledge that can impact the overall health of your business.

Benefits of Using PEO Software

While hiring your first foreign employee is daunting, growing your team internationally opens your business up to ample opportunities, and partnering with a PEO can help make this process significantly easier.

Consider the following benefits of using PEO software:

• Your company will remain compliant with all local labor laws
• All global hiring can be done utilizing the same platform, which means you can add employees one at a time or in groups across multiple countries.
• By setting up a foreign subsidiary and partnering with a PEO, you can access a new and diverse talent pool and work with local experts to ensure your business will be attractive to the best candidates.
• Payroll and benefits are all managed through the PEO software
• You can pay employees in your currency, and they will receive their paychecks in their preferred currency
• Aspects of employee management such as unemployment, workers' compensation, family and medical leave, and more are all managed through the PEO software
• PEO companies can assist in recruiting and hiring processes

If you plan to hire employees in foreign countries without PEO software or other global employment solution, you will have to set up a legal entity in every country where you intend to hire employees (even if you only hire a single employee) and manage all aspects of employee payroll, onboarding, compliance, and more.

The Difference Between PEO Software and HR Software

Although you may think of PEO software as an HR solution, there is a significant difference between a professional employer organization and HR software.

HR software will provide your company with a service through which you can manage payroll and onboarding, but rather than co-employing foreign workers in a partnership with you, it will simply provide the software through which you employ these workers.

Suppose you plan to use an HR software company. In that case, you will still accept sole responsibility for appropriately managing your foreign employees and ensuring that your company remains compliant with all local labor laws.

Simplify Global Hiring, Payroll, and Compliance With Skuad

Although it can feel daunting to begin hiring foreign employees, the process can be made significantly easier when you partner with a global professional employer organization like Skuad that provides service through PEO software.

Utilizing our simple platform, your company can hire and onboard new employees in minutes. You can also pay foreign employees in their preferred currency, manage work visas, benefits, and more, while remaining compliant with your local employment laws.

Whether working with a single independent contractor or growing your team across multiple countries, you can quickly and affordably scale your business by partnering with Skuad.