Whether as a contractor, recruiter or employer, there are various acronyms or other industry terms that you are likely to have encountered in the process of trying to devise a global employment strategy, and which you may still be unfamiliar with the meaning of.
There can be a lot of confusion, for example, about PEOs & GEOs, and what these terms really refer to – so let’s drill down into the specifics.
Introducing Professional Employment Organizations
Yes, PEO stands for ‘Professional Employment Organization’, which describes an organization specializing in outsourced HR support. You may turn to such an organization for all manner of employment management services, such as payroll administration, HR guidance and help with keeping on the right side of local employment law.
If you have previously or currently work in the United States, you may be aware of the ‘co-employment’ model used by PEO providers in the country. This model involves the PEO assuming responsibility for the legal employment and payroll element of hiring an employee, while it is the company that manages the workers’ day-to-day activities.
One particularly important, but often overlooked aspect of the co-employment model is the need for the client organization to be legally registered as a company or entity in the country where its employees are based.
However, such a co-employment format is absent outside the United States, with some countries even regarding it as illegal.
So, how does a GEO differ?
The acronym GEO refers to ‘Global Employment Outsourcing’ or ‘Global Employment Organization’. It’s a little different to the co-employment PEO approach in the United States, in that such a service does not require clients to establish an entity in the countries where they are seeking employment support.
The confusion as to what constitutes a GEO or PEO approach in various countries around the world is therefore understandable, especially given that the two do have much in common – for example, the relief of administrative HR and payroll burdens from clients.
Indeed, it is precisely because of this that whether a given organization calls itself a PEO or GEO, you should clarify with them the exact model they use.
Don’t look to any other PEO or GEO
If you are currently comparing PEOs & GEOs as a contractor, recruiter or employer, don’t hesitate to contact the Link Global Management team today about the comprehensive employee management services that we provide, and which will help you to ensure complete compliancy, cost-efficiency and peace of mind.