PEO (Professional Employer Organization) services can allow you to pursue new horizons by taking care of all the most complex parts of expansion and assuring compliance with international employment regulations.
However, in recent years, more and more companies offer PEO services at “low prices”, and an increasing number of businesses are finding themselves at risk of being misled by promises of high-quality services at low cost.
In reality, many of the PEO service providers that have sprung up over the last decade are giving businesses an inflated sense of confidence. In fact, the client will often find out later that the final contract doesn’t take into account the specifics of a job because the provider doesn’t have the right skills or knowledge.
How Much Do PEO Services Cost?
While the exact figure depends on several factors, including the services demanded, country of operation, and the number of employees provided for, PEO services typically cost a percentage of an employee’s wage, paid as a monthly service fee. There may be a setup cost including a deposit to cover potential severance payments or other unforeseeable events.
This fee should cover every element of the PEO service, including payroll, benefits, tax, and all leave calculation management, as well as provide continuous legal compliance assurance.
Low PEO Prices Covering High Costs
Unfortunately, whether through intentional attempts to mislead or unintentional mistakes due to a lack of the proper experience and expertise, many companies are unable to provide reliable breakdowns of PEO service costs.
In many cases, the initial quotation may be small, yet by the time the client comes to sign a contract, a number of additional fees have been added.
Worse still, in other cases the service may begin with a cheap figure, yet due to the mishandling of an unprepared provider, the service begins to cost more as mistakes or inexperience cause employee fears or expensive compliance errors that you the client are expected to pay for.
4 Common Mistakes Made by PEO Providers and What You Can Do to Avoid Them
Lack of Local Experience or Expertise
It can be hard to traverse the requirements and regulations of multiple countries when it comes to employment compliance assurance. That’s why many companies choose to seek PEO services after all.
Having the right legal and HR experts in place to juggle local and international processes is essential to being able to provide consistent and reliable service. A company that can provide this expertise is also likely to be an experienced one, having dealt with problems before. This experience can’t simply be bought, but comes from years or decades working in a limited number of markets where the provider can show true expertise.
That’s why it’s essential to always check a provider’s references before starting a business relationship. A reliable PEO provider will be able to supply a range of testimonials or references from satisfied customers. Always be sure to check a provider’s online presence to see how they are perceived, or ask them to supply references directly if you’re in doubt.
INS Global offers testimonials from many of our previous customers on our website or through third-party review sites.
Oversights Caused by Internal Company Issues and Practices
For many of the biggest and most visible PEO or HR outsourcing providers, having a larger staff is used as a sign of reliability. However, just as often it’s a serious disadvantage when it comes to service.
A large PEO provider experiences high turnover rates just like any other company, meaning you are more likely to be placed with an inexperienced or uninterested replacement right when you need consistent expertise the most. These companies typically prefer new clients over existing ones, leaving many businesses unsupported at key moments.
Your services partner should match your needs and your company’s situation. Many companies claim to offer services in hundreds of markets worldwide, but how is that going to help you when you are only considering one?
An in-depth knowledge of the market you are considering is preferable to a basic understanding of many unrelated countries. Likewise, your PEO provider should be able to demonstrate that you will receive consistent support throughout the process, putting your needs above internal changes or the pursuit of other clients.
Outdated Information
International regulatory compliance assurance is not done overnight. It is not a problem that is simply fixed once and can be left untouched. Instead, being able to ensure total legal protection throughout sensitive administrative procedures is an ongoing challenge.
One of the biggest ways that PEO companies fail their clients is by not paying enough attention to changing laws in the countries they operate in. Every change to employment law in a country can potentially change the way your employees need to be protected. This means PEO providers need to be constantly vigilant and reactive.
While a PEO service can be a quick way to get started in a new market without the same amount of involvement from your own HR team, it doesn’t mean that you should totally step away from the process. Fortunately, INS Global gives you a constant source of communication through a streamlined point of contact. If you ever have questions or concerns, we are here to answer them in a way that helps, not just pushes more services.
Trusting the Wrong In-Country Partners (ICP)
In order to sign as many clients as possible, many PEO providers work with local ICPs in the countries that clients are interested in, rather than handling issues themselves. These ICPs can be used to solve a number of problems related to PEO services, such as local visa process management or payroll guidance.
The use of local ICPs is not by itself a bad thing, and often the linguistic and local expertise that an ICP can provide is the best way to ensure your needs are met as efficiently as possible.
However, the problem comes when the use of these ICPs is not disclosed, leaving you unaware of potential problems with liability, or when these local partners are not properly vetted by the PEO provider.
You need a PEO provider that only works with the best, and only in situations where you benefit. That’s why INS Global works with a limited number of trusted and verified ICPs in situations where they are the only way to provide the top-quality services you need. Otherwise, we use our own entities where we offer solutions.
If You’re Ever in Doubt About the Cost of a PEO Service, Why Not Contact INS Global for a Free Consultation?
INS Global is a tech-based supplier of industry-leading PEO services worldwide. For nearly 20 years we have been helping businesses reach their global potential through the best in local experience and expertise.
We know there are many companies out there offering services that appear too good to be true and so often turn out to be just that. That’s why we offer to check the amount that you’ve been quoted by any of our competitors to give you the confidence you need to choose a PEO provider. We use our own expert knowledge of the markets you’re targeting, to compare it with real-world examples, for free.
Our number one goal is to ensure an easy route to global expansion for every company. That’s why we pledge to give you all the figures up front with nothing hidden or misrepresented.
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