Which PEO Services Fit Your Business?
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March 6 2023 - If you are embarking on global expansion and your new market target is the UK, signing up with a PEO or professional employer organisation is the most viable option. Many international companies use this option because the PEO provides many HR and administrative services, such as shortening the time it will take for the international organisation to start business operations and hiring all the required staff on behalf of the clients.
What does a PEO do?
A professional employer organisation is a type of outsourcing service provider. Its key function is to assist businesses with HR tasks.
A service provider like UK PEO provides a solution for international companies that plan to establish a small team in the UK, allowing them to operate quickly as the initial step in establishing a subsidiary that the parent company owns.
Services a PEO in the UK offers
Not all PEOs are alike, so the services they offer international clients may vary. But generally, a PEO service provider can offer several or all of the general services listed here.
- Selects and hires UK-based staff for you
- Creates employment offer letters
- Prepares contracts of employment
- Creates an employee handbook
- Full management of UK employees' payroll, insurance, pensions, and other benefits
- Compliance with UK labour laws
- Computation and payment of taxes
Each broad service category here includes many details. But the main consideration is a company provides you with professional employer organisation and employer of record service for a company needing to hire and manage small business teams in the UK. A PEO allows the client to start business operations without registering a legal entity. The PEO service provider acts as your co-employer, and the government recognises the PEO as the employer on record. It means it acts on your behalf to hire and manage employees in the UK following local labour laws. The employees you hire will work for your business, although the payroll, benefits, and taxes processing will be under the PEO.
Do you need all the services a PEO offers?
If you are after international expansion, the answer is yes, you need all the services the UK-based PEO offers because it is difficult to establish a company in the country and hire the new employees you need. The PEO provider typically offers payroll services, insurance, and compliance monitoring, which are tasks the HR department usually performs.
In the international setting, the PEO becomes your business partner, co-employer, and employer on record if you want to expand in the UK. It allows the client company to start business operations legally within days without setting up an infrastructure. Usually, the PEO contract lasts one year, giving the client the time to establish its company-owned subsidiary.
Remember that despite the PEO performing HR functions on your behalf, it will not take over the entire HR department. The HR functions of a PEO work on an interim period. Once you are settled in the new market, the PEO can assist you in seamlessly transferring the employees hired by the PEO to work under you. Afterwards, you are ready to terminate your contract with the PEO.