By Zephrina Cazaubon (Founder and CEO, Ascension BPM)

When deciding to outsource your internal human resource management to a trusted provider, there are key questions to ask your team before embarking down this road. The most critical is deciding if an Employer of Record (EOR) and Professional Employer Organization (PEO) structure is right for you. 

Understanding this and other differences between a PEO vs. EOR is the first step to choosing an ideal solution for your company’s complex talent needs. The main difference between PEO vs. EOR is that a PEO acts as a co-employer, while an EOR is the legal employer of an organization’s distributed workforce.

Effective companies need novel solutions to quickly and compliantly build their global workforce. It’s no wonder that many teams look beyond their surrounding market to find and hire remote talent across the country, nearshore or offshore.

However, hiring and paying across borders requires compliance with local employment laws—a time-consuming and complicated endeavor. Understanding the key differences between PEOs and EORs are factors when selecting the structure you want to pursue. Here’s some guidelines: 

The Professional Employer Organization

A PEO is a company that works with businesses to provide comprehensive HR services. Businesses that need help hiring full-time, permanent employees in their local area often choose PEO partners to offload tasks like:

• Payroll processing
• Benefits administration
• Regulatory compliance
• Tax filings

PEOs act as a company’s outsourced HR department so that internal teams have more time to focus on their core tasks. A PEO is a partner company and not the employer of your workforce. This means that working with a PEO relieves you of HR-related responsibilities, but your company is still held accountable for both legal and day-to-day operations—including registering your business where you hire talent

The Employer of Record

An EOR organization assumes all employer-related responsibilities for small to large enterprise-sized businesses in locations where they don’t own a legal entity – such as one of the many islands in the Caribbean. On paper, an EOR is the legal employer of your workforce. In reality, you maintain a similar relationship with your workforce as you would without an EOR.

An EOR handles complete HR-related tasks, such as:

• Locality-specific onboarding
• Payroll
• Taxes
• Payroll compliance
• Benefits administration
• Unemployment claims reporting

If your goal is to quickly and compliantly hire top talent no matter where they’re located, an EOR provider gives you the flexibility to easily enter nearly any market—no business registration and complicated paperwork required.

Working with an employer of record also gives you peace of mind knowing that experts compliantly handle every HR and employer-related responsibility, so your teams can focus on their core responsibilities. As a result, an employer of record reduces the time, hassle, and cost required to build a distributed workforce.

In developing your relationship with your outsourced provider, its important to stipulate what your role you want them to full as well as appreciating the benefits they can offer. 

The Advantages of Selecting PEO or EOR Outsourced Support 

Consolidating all your global HR functions with a nearshore or offshore provider can simplify all your people management processes. From recruitment to retirement, your partners should be able to streamline compliance with all the confusing – and often conflicting – government requirements.

You should expect your provider to have in-house knowledge providing: 

Professional Employer Organization Services

• Complete PEO solutions provide your organization administration relief, reduced liability and provides your employees with comprehensive coverage plans.

Experience serving as a Employer of Record

• Transfer day-to-day responsibilities to a provider who can manage the full life cycle of your domestic and Caribbean employee base from recruitment to retirement.

Ability Managing Employee Benefits

• Provide your employees with access to inclusive benefits from medical, dental, vison plans and short and long-term disability insurance.

Know exactly what you’re paying for HR management.

Change is a common denominator in the HR sector and the most efficient way to keep pace with change is to work with an outsourced provider dedicated to this function. Be sure your provider has a record in ensuring clients are protected from multiple and sometimes confusing government requirements throughout the Caribbean or any global jurisdiction. Services where your provider should excel include: 

Administration and Payroll

• Dedicated teams process payroll, manage deductions, simplify time-tracking, and manage compliance, records, and reports. We’ll also streamline employment verification, onboarding, vacation approval and employee access to online payroll details.

Government Relations

• Deep relationships with elected officials and public servants allow access to the region’s decision-makers.

Legal Compliance

• Ensure disparate legal requirements for multiple jurisdictions align with your internal processes with our expertise.

Regulatory Adherence

• Ascension BPM’s staff constantly review HR regulations throughout the region to ensure clients’ policies and procedures are up to date.

Your PEO/EOR should offer legacy expertise in financial management offering unmatched discipline in uncovering waste and savings. No hidden costs, just straightforward and transparent pricing, ensuring you have control and a clear line of sight of your costs.