Cost-Effective Way to Expand Your Business
During times of economic downturn, company leaders need to address their strategy to make their business model more efficient. Reducing business overheads and getting the right headcount are smart methods to cut-costs.
With economies taking a heavy hit from the Covid-19 pandemic, the need to manage your budget in your business plans has become increasingly important. Enterprises still looking to expand their footprint into other countries are choosing PEO/EOR secondment services due to the large savings they can make.
What is PEO & EOR?
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.
The 5 Benefits of PEO/EOR Expansion
For businesses looking to expand their operations overseas, this is the perfect cost-effective and time-saving alternative. Company leaders who are deciding between setting up a legal entity or using secondment services should know about the benefits of PEO/EOR first.
1. Risk Minimisation
Setting up an entity or a branch in a new location can be a very risky move. If your service or product does not resonate well with the local market you may have to withdraw from the country and concur serious losses. With PEO/EOR, businesses can test the waters without making a large financial commitment.
2. Fast Market Entry
Time is money. Without the need to go through the traditional process of establishing an entity, you significantly reduce the time to enter a market. Less paperwork and bureaucracy can reduce the time it takes from months or years to just a few weeks.
3. Trusted Compliance
Unsure about local labour laws and regulations? A professional PEO/EOR vendor will ensure you are fully compliant with protocols. Legislation and payroll system rules like mandatory taxes and deductions can vary tremendously from country to country. Trusted vendors will help your business keep up with the ever-changing employment laws, so you will never receive penalties for non-compliance.
4. Negate Potential Lawsuits
Employers must know their liabilities in relation to employment. If they are not in check, one small mistake can result in a lawsuit. Employment-related lawsuits like wrongful termination or discrimination, can devastate your business and ruin your reputation. A secondment vendor will have specialists familiar with the intricacies of HR-related rules to advise you and better protect your business.
5. Payroll Assistance
Look for a PEO/EOR provider that also has payroll services. A vendor that can offer you both services will be able to tailor a package for you at a better fee. Automate your payroll processing and accounting costs to take your employees off mundane HR tasks. Focus their attention on other departments and watch your business grow.
Good Example – Businesses Are Expanding into Vietnam with PEO/EOR
Vietnam has been one of the premium locations for businesses looking to expand. The reforming business environment and improving infrastructure is attracting a host of companies to set up operations. With tensions between the US and China growing, businesses are being encouraged to diversify their supply chains to Vietnam. Vietnam is looking likely to be one of the few beneficiaries of the geopolitical tensions, and business leaders should all be exploring its markets for opportunities.
Many company leaders are choosing to expand by using PEO/EOR services due to language complications and inexperience with local laws. Using secondment services will help businesses navigate the difficulties and avoid corruption-related incidents. Focus your efforts on key business tasks and expand your operations!
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Links International is an industry leader in innovative HR outsourcing with services such as payroll outsourcing, visa application, PEO/EOR Secondment, outplacement, recruitment and more! Contact us for more information on how we can help leverage your HR function.