A Professional Employer Organization is an agency that acts as the legal employer for your global human resources, thus allowing you to hire remotely.
Global hiring has become a potent tool for businesses to get remote work done. It allows businesses to widen their talent pool, segregate workloads, and even offload some tasks to external individuals. Most importantly, it allows entrepreneurs to extend their reach into foreign territory. With global hiring, there are three main avenues you need to check out: PEO, independent contractors, and international employees.
- PEO for Global Hiring
A Professional Employer Organization is an agency that acts as the legal employer for your global human resources, thus allowing you to hire remotely. is an agency that acts as the legal employer for your global human resources, thus allowing you to hire remotely. By regulations, as a foreign business owner, you cannot hire legally until you form a legal business entity in the target region. A PEO allows you to bypass this restriction.
If you want to hire employees in India, a professional employer organization in India will employ the resources you select, look after their HR processes, and also payroll processing. Technically, the PEO agency becomes the employer for your human resources. But practically, these employees in India work for you. You are in control of their throughput, their task assignment, and their productivity.
When hiring globally, a PEO service provider absorbs considerable risk for your business in terms of understanding the market conditions, employee retention, and business availability.
- Hiring International Employees
If you are not averse to triggering a Permanent Establishment (business entity), you can set up a legal presence in the target region and then hire international employees. However, certain risks and caveats are associated with this.
Firstly, you will need a deep understanding of the local employment laws and practices in your target country. You will need to match salaries, employee benefits, and working conditions with the norms being practiced in that region. Moreover, you may need to formulate certain policies that contradict the ones you have in your domestic setup or add in some exceptions. This is because your hiring policies need to be compliant with the local regulations. For instance, you may need to accommodate travel allowances for night shift employees in India even if you do not have any policies in place for travel allowances.
Additionally, you will also have to consider employee data protection. This is to comply with data protection laws and regulations being followed in your target region. Employees need to be able to rightfully access the data which your company is collecting and also understand how you’re planning to use it.
Furthermore, you need to take on the unique challenges of handling a team from afar and be responsible for their productivity.
- Independent Contractors
Independent contractors are freelancers to whom you can outsource your work. You just negotiate the pricing, decide the scope and parameters of work, and then let them loose, so to speak. They will complete their tasks and hand over the deliverables once done, but beyond that, you don’t have a say in the way they work, the hours they put in, or the setup they use.
This is one of the biggest risks in contracting. You have very little control over maximizing the throughput from the human resource. They may be working from a suboptimal work setup or working late hours when they may not be at their peak energy levels. But you cannot object as long as they deliver the product on time.
Another critical risk with independent contracting is that your contractors can also be working for your rival companies! Remember, you can protect only your work product under non-disclosure contracts, but you cannot stop a contractor from working with any company that is willing to take them.
Another worrying factor is the cost. Contracting rates are growing higher and higher ever since freelancing portals and platforms have gained repute. HR outsourcing is also becoming a trend. If you need tweaks or an extra round of iterations, the cost is calculated separately, which makes contracting a very expensive affair.
- Making a wise choice
The people in your team can make or break your business. The right kind of people will take you very far ahead. Hiring is not an avenue where you’d want to take brash or emotive decisions. Now that you have a better understanding on 3 main aspects of global hiring, you can take an informed decision.
If you are looking to play it safe and get the most out of your global employees and incur minimum risk, PEO is the way to go. If you would rather think long-term and build an operation base in a foreign country, then maybe you can set up formal legal entities and hire international employees directly. Or if you have individualistic tasks that will not affect the smooth running of long-running projects, then you can think of contracting work.
If the PEO industry is the way to go for you in the Indian marketplace, look no further. We offer specialized PEO services in India, which are honed and polished from years of experience in the Indian markets. Looking to connect with us? Well, we’re just a contact form submission away.