Global employment outsourcing is a hiring solution that allows companies to hire, onboard, pay, and manage the workforce globally without setting up legal entities in any country. This method is best for compliance management while avoiding legal pitfalls of labor laws and regulations across countries worlwide.

What is Global Employment Outsourcing?

GEO (Global Employment Outsourcing) is hiring employees worldwide to build an international team. Under this arrangement, companies can hire, onboard, pay, and manage employees in any country without setting up local offices.

GEO provider is a company that helps other companies outsource their employees anywhere in the world. It acts as the official employer for a company's workers in other countries. GEOs take care of important tasks:

• Paying workers
• Managing benefits
• Following local laws
• Handling other HR jobs

The company still directs the daily work of its employees  while the GEO handles the complex parts of employing people in different countries. This system helps businesses to focus on their operations instead of compliance and labor laws regarding hiring and retaining employees. It is an excellent wat to save time and money and redirect the same for business growth.

What are the benefits of global employment outsourcing?

As discussed above, global employment outsourcing offers several benefits for companies looking to expand their operations internationally. The advantages of outsourcing global employees are discussed below.

Quick Market Entry

Firstly, companies can plan to enter new markets without setting up a legal entity or subsidiary. This agility is crucial to seize opportunities quickly and adapt to changing market conditions.

For example, an IT company can set up a team in an emerging market to cater to growing demand by temporarily hiring local talent.

Access to Global Talent

This benefit goes beyond just hiring internationally. It opens the door to KPO - a process to onboard specialized knowledge and skills from any part of the globe.

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For example, a US-based tech company can virtually hire top coding experts from India or Brazil for a short period. This allows the company to utilize the expertise of offshore coders without relocating them. This global approach to talent acquisition can boost innovation and competitiveness.

Simplified Management

Outsourcing routine HR tasks frees up internal resources for other core business activities. This acts as a strategic move while seamlessly dealing with complex international payroll systems and foreign labor laws. 

Consequently,  more resources and manpower can be dedicated to product development, winning market strategy, and superior customer service. The overall streamlined process leads to faster growth and increased revenue.

Cost Efficiency

The financial benefits extend beyond labor arbitrage. By avoiding setting up legal entities in each country, companies save millions on legal fees, office space expenses, and administrative costs.

Valuable Time Utilization

The time saved by outsourcing global employees is equally valuable. Companies do not have to spend months chasing foreign bureaucracies. Instead they can start operation in new markets within weeks while still staying compliant to local laws. This valuable time is key for competitive advantage for fast-moving industries.

Risk Mitigation

International employment laws are complex and dealing with them is an overwhelming process. Each country has its own regulations covering everything from working hours to termination procedures. Non-compliance to such regulations can result in hefty fines or legal troubles.

However, by outsourcing this responsibility, companies can avoid these risks and focus on strategic decisions instead of legal pitfalls.

Flexible Workforce Management

The flexibility in workforce management is probably the most attractive benefit of global employment outsourcing. Companies can equally scale their offshore teams up or down quickly in response to changing project needs.

This agility in workforce management is valuable in industries with fluctuating workloads or seasonal peaks. It further allows businesses to maintain optimum workforce without the long-term commitments and costs.

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Cultural Bridge

GEO companies understand local business practices and work cultures. This insight is valuable in building effective international teams while respecting cultural practices around the world.

What services do global employment outsourcing companies provide?

Services offered by GEO providers may vary per provider or scope of work. However, some common global employment outsourcing services have been outlined below.

Global Payroll Services

• Handling currency conversions and international payment transfers
• Tax calculations and deductions based on local tax laws
• Reporting to local tax authorities
• Managing social security contributions
• Managing overtime, bonus, and other variable pay components

Global Benefits Administration Services

• Implementing mandatory benefits as per local laws
• Managing supplemental benefit packages
• Enrollment processes in various countries
• Claim processing

Global Immigration Services

• Managing visa process and work permits
• Liaison with government officials for visa processing
• Assistance with document legalization
• Employee relocation support

Employment Contracts Services

• Drafting employment contracts as per local regulations
• Assistance with contract amendments and renewals
• Translation of contracts into local languages
• Managing termination and resignation

Local HR Support

• Assistance with day-to-day HR processes
• Managing employee onboarding and offboarding
• Leave and absence tracking
• Managing performance monitoring
• Guidance on local cultural norms
• Establishing conflict resolution processes

Local Legal Counsel and Compliance

• Monitoring local employment laws
• Guidance on compliant HR policies and procedures
• Advice on employee data protection and privacy regulations
• Support during labor inspections or audits

How to select the right employment outsourcing partner?

Before you proceed to partner with an employment outsourcing company, here are some useful tips to choose the right GEO service provider company.

1. Local Expertise: Ensure the GEO company has in-depth understanding of local labor laws and regulations.
2. Transparent Pricing: The outsourcing partner should offer a clear pricing structure without hidden fees and discrepancies.
3. Accurate Cost Calculations: The GEO company must be able to provide precise estimates of total costs and expenses, including social security contributions and taxes.
4. Industry Recognition: Selecting a recognized company in the field is advisable. You can seek validations by third-party auditors to filter out the right outsourcing service provider.
5. Prompt and Responsive Support: Finally, the employment outsourcing partner must have a dedicated support team available for all time zones.

Expedite global outsourcing with an employer of record

An EOR (Employer of Record) is a special entity for businesses to hire talents from other countries. The EOR does all the paperwork, formalities and follows the rules about hiring people. When a company uses an EOR, the EOR becomes the de facto employer dealing with all matters related to employment. But the company still holds the power to utilize the talent at its discretion.

A step further, a global employer of record, or global EOR, does everything done by an EOR but on a global scale. It helps companies hire people from foreign countries while staying compliant to the country's laws.

The bottom line

GEO arrangement allows a company to expand anywhere in the world without the need to set up legal entities or subsidiaries. It is a suitable method to hire employees while complying with local laws and regulations yet without legal liabilities.

Partnering with a GEO company can be beneficial for several reasons including cost and time efficiency. The best feature, however, is to scale up and down workforce management as per changing business needs. 

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FAQs

What is global employment outsourcing?

Global employment outsourcing is a hiring solution that allows companies to hire, onboard, pay, and manage the workforce globally without setting up legal entities in any country.

What is a global employment company?

A global employment company is a company that provides employee hiring and management solutions  for other companies in return for service fees.

What is outsourcing employment?

Outsourcing employment allows a business to hire a workforce in another country to perform business processes and handle day to day operations without setting up offices in that country.