The differences between EOR, PEO, and GEO
Terms like EOR, PEO, and GEO may seem quite intimidating and abstract to an ordinary person, but these terms are used frequently for organizations looking to expand into new territories.
Expansion into new territories signifies growth, which is the aspiration of every organization. Acquisition of new clients, expanding the organization’s financial coffers, and planting the organization’s footprints on different parts of the globe are real hankerings for any organization. However, these goals come with challenges and will leave even the most astute and wealthy organizations bewildered.
To ease the complexities of international expansions, organizations contract third-party organizations’ services to handle the complex aspects of establishing an entity in a new region. For example, these organizations take on payroll management, legalities, taxation, and policy compliance in the new country. Having different functions, PEO, EOR, and GEO are the entities that simplify these processes for any organization seeking global expansion.
EOR vs. PEO vs. GEO — The Definitions
EOR (Employer of Record) is a company tasked with paying employees on behalf of a client organization. The EOR company handles the payroll management, taxes, benefits, and other employee transactions for the hiring organization.
The EOR company essentially stands as the legal employer of workers in territories where the hiring organization does not have the legal rights to carry out business operations. The invaluable service offered by the EOR partner for an organization ensures the organization stays compliant with the new territory laws and can carry out its business without worrying about the challenging aspects of human resource management for the workers in the new region.
Skuad is a top-tier EOR platform that handles payroll management, Local and IC compliances, and cross-border payments. With a supreme network of over 150 countries, organizations can onboard top global talents seamlessly.
PEO (Professional Employment Organization) is an entity that allows its client organization to hire workers in a new territory without the organization having its footprints in that country. However, PEO’s definition is clearly defined in the United States, and this is because employment requirements vary amongst the states in the US. Therefore, the PEO company steps in for small to mid-sized organizations and helps them meet all the regulations in different operations areas.
Unlike the EOR that bears the employee management’s full responsibilities, a PEO company co-employs alongside the client organization. In simpler terms, the PEO company handles a part of the HR administration (like payroll management, employee onboarding, contract termination, etc.). In contrast, the client organization takes the employment responsibilities and liabilities and focuses on the organization’s core business.
It is worth noting that a Global PEO is quite different from a PEO. The difference lies in the fact that a Global PEO employs workers through its entity and handles other HR responsibilities — Just like the EOR.
A trusted PEO company is PEO Worldwide Limited. They are a professional team based in the UK with global footprints and far-reaching expertise to take your business to the next level.
GEO (Global Employment Organization/Outsourcing) handles the employer functions globally for its hiring organizations. The GEO company is responsible for the legal recruitment and management of employees on behalf of an organization. The GEO does the same duties as an EOR company.
EOR/GEO vs. PEO — The Differences
Ultimately, the choice of a third-party organization for globalization depends on many factors. One of them is the organization’s size, and the number of employees onboarded into the organization. Therefore, the organization should conduct a thorough analysis of their wants to make the right choice when expanding globally.
