Advantages of Using PEO and EOR Outsourcing Services – Professional Employer Organisation (PEO) and Employer of Record (EOR) are secondment services that help businesses with overseas deployment. Under PEO/EOR businesses will not have to set up a legal entity to set up a workforce in another country. A service provider will legally employ staff on behalf of your company and transfer them back to you under a service agreement, allowing you to hire staff immediately to perform business operations. 

PEO (professional employer organization) vs EOR (employment of record): Are they both the same?

PEO and EOR provide different services. EOR puts a portion of your business and employees on the payroll. PEO takes care of all your employees and provides all HR-related functions. Additionally, you hold an employment contract when you work with a PEO, whereas EOR holds an employment contract, engaging you with a service agreement.

PEO and EOR provide different services 

Below are the main differences between PEO and EOR:

1. Workers are Classified Differently

If you choose EOR, then EOR provides the job and is legally responsible to employees, but in the case of PEO, the legal responsibility remains with you to hire your employees.

2. Responsibility for Business Registration

EOR allows you to hire employees in other countries without registering a physical entity, but at PEO you need to register your entity at your location.

3. Difference in The Minimum Number of Workers Required to Start

EOR can be started with one or two employees but for a PEO you need a minimum of 5-10 employees to get started or more.

4. Insurance Plan

For registered employers, insurance costs are included, but in the case of professional employers’ organizations, insurance is paid in addition to the PEO service fee which is one of the biggest hidden costs in the service.

As mentioned above by title. What are the Advantages of using these two services?

PEO – Professional Employer Organisation & EOR – Employer of Record 

1. Minimizing Risks

PEO/EOR allows clients to employ full-time employees (not contractors) without risk without having to establish a legal entity in the state or country in which they wish to operate. With PEO/EOR, businesses can test conditions without making major financial commitments.

2. Local Knowledge

Work-related lawsuits, such as termination of employment or wrongful discrimination, can destroy business and damage reputation. Using a PEO/EOR outsourcing service enables an employer to understand all local laws and regulatory requirements, putting compliance requirements and international payroll solutions in the hands of a capable local organization. With outsourcing PEO/EOR services you will have specialists who are familiar with the intricacies of HR related rules to inform you and better protect your business

3. Time & Cost

Time is money. Without going through the traditional process of setting up an entity, you significantly reduce the time it takes to enter the market. Fewer paperwork and red tape can reduce the time needed from months or years to just a few weeks.

PEO/EOR can save costs by allowing employers to hire local workers without the expense and hassle of setting up a local office. PEO/EOR will charge the company for their services.

4. Handling Employee Payroll

The payroll process is a procedure that an organization or company uses to pay its employees. Payroll usually involves paying employee salaries, handling mandatory benefits (social security), deduction of Personal Income Tax, paying annual bonuses, Paying Overtime (if any), etc.

By using a PEO/EOR provider that has payroll services. Automate you not to do the usual things, i.e: process the payroll accounting of your employees which is usually done by HR.

Indoservice is a modern employment agency and payroll company, and therefore we offer PEO/EOR services under our company, if you are ready to hire an employee, but not ready for the legal hassle that comes with it. Our professional staff and payroll services can help.

Contact us at email: admin@indoservice.co.id and Telp./Whatsapp +62818-1881-1887 for more information and special offers.

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