Co-employment is an employment relationship between two organizations. Often, a client business and a Professional Employer Organization (PEO) share employer responsibilities between them. For many business owners, the beginning of the year is a great time to review the overall financial health of the business. One area that they are often left to ponder is their payroll. Many owners think about outsourcing the payroll, but do not know what exactly outsourcing entails.

In co-employment there are defined tasks that the company manages by themselves. Day-to-day business operations and daily HR tasks which also include employee performance activities are managed by the company. Job targets and KPI’s are also monitored by the company itself in most scenarios. Management of the employee however is taken over by the PEO. Recruitment, placement of employees at different locations on requests, managing payroll, benefits and deducting tax, complying with local tax and regulatory laws and even performing employee surveys and exit interviews become a part of the PEO’s role.

There are many benefits of co-employment for a company that is expanding globally. One of the key benefits is that PEO takes responsibility for the legal and administrative side of employees allowing the company to focus on its core business.

The HR can be agile and managed seamlessly with a PEO onboard in terms of quality, international standards and guidelines. PEO with their expertise in the region can guide a company plus provide additional benefits to the employees such as pension, insurance, medical benefits etc

Payroll planning and management can be done efficiently while PEO would handle paychecks and taxes on behalf of the company, allowing them to focus on strategic expansion. Not just compensation, PEO manages benefits including leave, retirement and entitlements.

Co-employment with a PEO also entails that they support the company have a robust HR strategy to support the expansion strategically. PEO allows the company to take decisions while they focus on growing the human capital and supporting with HR policies and statutes.  

There’s lots of paperwork involved in the complex HR responsibilities of a company. Working with a PEO can simplify the HR responsibilities, by taking over the administrative and labor-related tasks of a company and becoming its co-employer.

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