Exploring the Different Options for Global Workforce Management: PEO, EOR, GEO, and AOR

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Exploring the Different Options for Global Workforce Management: PEO, EOR, GEO, and AOR

Global expansion can open up significant opportunities for your business – from cost savings to talent retention to fostering new relationships. But, global expansion and hiring are not easy processes. Luckily, you don’t have to go alone. PEOs, EORs, GEOs, and AORs are all types of organizations that offer services to help you hire worldwide in different capacities.

The Human Resources arena is continuously evolving, with new words and terms being added to an already-overwhelming list of terminology.

You’ve possibly heard of a PEO or an EOR, but what do these abbreviations mean?
How about International PEO, AOR, or GEO?

Below, we’ll define and compare each of these terms to help you know which global hiring service is right for you.

PEO vs. EOR vs. GEO vs. AOR: Key differences

There are many companies out there that offer helpful services when it comes to outsourcing or managing payroll, but how do you know what kind of service is best for your company? That’s where knowing the difference between a PEO and an EOR comes in.

Professional Employment Organization (PEO)

A PEO, or professional employer organization, is a type of full-service human resource outsourcing known as co-employment. In this arrangement, the PEO performs various employee administration tasks, such as payroll and benefits administration, on behalf of a business.
Unlike an EOR, PEOs don’t assume a full legal employment role: they co-employ. The PEO takes responsibility for the payroll and HR support administration, leaving you to take care of your employees’ daily tasks and focus on what matters most to make a difference.
If you’re looking for more control, the co-employment offered by PEOs can be an advantage. However, you miss out on the insurance benefits and the ability to not need registration in other states and countries.

Employer of Record (EOR)

An Employer of Record, or EOR, is the legal employer of anyone you hire through them. They are the company solely responsible for paying employee wages and taxes and managing benefits, timekeeping, and compliance. They take on the total liability and report taxes under their tax ID. If you don’t have an EOR, your employees will be working in a gray area that could lead to more complications.
One of the significant benefits of an EOR is that they handle payment based on payment terms–unlike a PEO, which requires payment before payroll is made. Plus, you can hire anyone, anywhere in the world, through an EOR, regardless of whether you are a registered business entity there. If you’re looking to expand to new markets or hire top-tier global talent, an EOR is a way to go.
Many growing companies have hiring needs but don’t want to add additional headcount. Using an EOR is a way to get work done for your business as an expense because the EOR is the legal employer.
An EOR takes care of nearly all your HR needs. You don’t have to worry about healthcare, labor laws worldwide, or worker’s compensation because they will do everything for you – from payroll and onboarding to filing taxes and offering benefits.

Agency of Record (AOR)

An Agency of Record (AOR) is a company that is contracted to provide services for an extended period of time. The AOR might be hired by the employer or by the employee, and they are typically tasked with creating marketing material, managing social media accounts, designing graphics, and other day-to-day tasks related to branding.

What Are the Benefits of Using an AOR?

Onboarding/offboarding documentation management;
Enforcement of client policies regarding background checks, drug screens, NDAs, and more;
Contract administration;
Risk mitigation for IC compliance;
State and Federal reporting requirements;
Invoice management, expense reporting, and approval;
SOW execution;
End of year 1099 and other tax document delivery;
Audit defense data maintenance;
Single point of contact throughout assignment;
Unburden and redeploy purchasing and Accounting personnel;
Additional layer of insulation between company and potential audit.

Global Employment Outsourcing (GEO)

GEO is an acronym for Global Employment Outsourcing. These services are provided by international employment firms that can act as a legal Employer of Record (EOR) for a client company.
GEO services are designed to simplify the international expansion journey and help you navigate various administrative HR tasks when:

Performing work in a country where your company may not be registered
Setting up a new legal entity
Understanding labour laws and tax implications in-country

International PEO

International PEOs are often confused for GEOs. However, International PEOs are still simply co-employers and only share some of the responsibilities with your company. In addition to the usual PEO qualities, an International PEO does offer reduced compliance risk across state and national borders.

In Conclusion

An Employer of Record, or EOR, is the most advantageous option for maintaining a contingent workforce in today’s world. If you’d like talent from around the globe without the stress of compliance, and benefits for your remote workforce, consider an Employer of Record.

Adding to HR headcount in order to manage a newly expanded contract workforce can add significant costs to an HR department. And if cost savings and efficiencies are among the reasons why you may be considering adding contract workers to your workforce mix, then it seems counterproductive to add full-time resources to HR. In these cases, the AOR is definitely worth consideration.

At iGrowStaff, we provide Employer of Record and Agent of Record services, both with integrated payroll funding options. We are on a mission to help companies unlock their full growth potential by providing these simplified back office solutions. Contact us today if you have questions.

Editorial Team

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Exploring the Different Options for Global Workforce Management: PEO, EOR, GEO, and AOR

PEO vs. EOR vs. GEO vs. AOR: Key differences