The differences between PEO, GEO and EOR in the global market
10th November 2019
What is a PEO service in the USA?
In the USA PEO is a well-defined term – as a Professional Employment Organisation. The PEO company, co-employs teams alongside the ‘workside employer’. The workside employer is the traditional employer in the sense that they meet the cost of the payroll and benefits, they provide line management, direction and control of the employees. They retain hiring and firing autonomy over the workforce.
The PEO firm assume responsibility for the administration of the payroll and benefits alongside the HR support. The co employment relationship allows the workside employer to concentrate on its core business whilst the PEO focuses on the admin. Both parties benefit from the specialization of the other and the relationship is a win -win.
Are global PEO services the same?
Yes & no. The result for the client is the same - the global PEO takes care of the administration, HR, benefits and payroll in the host country. They also employ the individuals through their own local entities. This is where the key difference occurs. In the US domestic model, the ‘co-employment’ model is recognised by legislature and so it has a formal basis in law. In the rest of the world it is not that simple.
In most cases the client requiring the global talent does not own an entity in the host country – this in normally part of the reason for leveraging a Global PEO or Employer Of Record (EOR) firm.
What is the difference between a global Employer of Record and a global Professional Employment Organisation?
Outside of the USA – Nothing. Its semantics. EOR and PEO companies do the same key things. They employ individuals on their infrastructure, they manage the HR, Benefits and payroll. The client gets the work delivered by the people they want regardless of location.
Is a GEO the same as a global PEO?
Yes- some firms have coined the phrase GEO (Global Employment Organisation) to describe the services offered globally rather than PEO. As noted, PEO is only truly defined in the USA.
So, what’s the difference between an ASO service and a PEO service?
ASO (Administrative Services Organisation) is when a business (with its own legal infrastructure) outsources the management of the payroll, HR and benefits to the ASO partner. This is close to the PEO model in terms of the work carried out but the risk around severance, tribunals, unfair dismissal and employee disputes remains with the client.
What is a global payroll solution?
Global payroll is not the same as the above- it forms part of the solution however. If you have multiple global entities with large volumes of employees, you may opt for a global payroll solution. This consolidates your payroll processing but does not support your HR function – neither does it allow you to payroll someone without a local entity (in most cases).
So, if you are looking to employ globally and want a plug and play approach to your global employment, get in touch with PEO worldwide to see how our service fits your needs.