What is a Global employment organization (GEO)

A Global Employment Organization (GEO) is an employment solution that enables companies to hire global talent without establishing a local branch in every new country they wish to hire.

Most global employment organizations provide global employment outsourcing. This means the GEO can act as a legal Employer of Record (EOR) to hire remote and international employees on a company’s behalf. They also take care of employer responsibilities such as administration, global payroll, and taxes.

A GEO streamlines the hiring process and ensures that the company complies with local labor and tax laws while the company retains control over its core business and day-to-day management of workers.

What does a GEO do?

A GEO takes care of the business needs of multinational companies, including:

• Compliance with local employment laws (labor law, rules, and regulations)

• Handling tax administration and insurance

• Filling the payroll requirements in the host country

• Creating employment contracts that follow local laws

• Providing employee benefits

• Hiring and onboarding new employees

• Money transfer across the home state and foreign countries

• Processing work permits and visa-related requests for each international employee (if applicable)

Benefits of using GEO services

Having someone else manage your company’s human resources workload will mean you have far less to worry about as you begin to expand out of your home country. However, GEO services go beyond HR administration, from scouting top talent worldwide to ensuring your company doesn’t break any laws.

Below are all the benefits of using GEO services instead of doing it yourself:

GEO increases scalability: GEOs can scale your company and form a global workforce in response to industry shifts and business requirements. These organizations know more about the local industry and where and how to look for fresh talent.

No more compliance and security issues: If you hire independent contractors and the job description is too similar to an employee, you’re at risk of employment violations. By using GEO services, you can rest assured that your contracts remain compliant with local labor laws, and your company won’t suffer any penalties. GEOs also have a team of experts that ensure you avoid any tax and payroll processing errors. 

GEOs help you enter new markets quickly: A GEO is a safer and faster solution instead of establishing a business entity (permanent establishment) in a new country. Establishing a new legal entity can be complicated and time-consuming. You can confidently fast-track international expansion and global mobility with a GEO in a few hours.

Using GEO is cost-effective: Setting up a local branch is expensive, especially if you only intend to hire a couple of people. With a GEO acting as the EOR, you can manage international expansion from your existing headquarters.

Better time management and increased productivity: GEOs have an internal HR team that can handle administrative tasks on your behalf. Freeing up more of your time so you can focus on revenue-generating tasks. 

GEOs open doors to richer talent pools: AGEO is your gateway to global talent. Depending on your business needs, a GEO can assist you with international employment and setting up for remote work.

GEOs can bring attractive employee benefits: GEOs have access to more attractive benefits than many companies can typically afford their own. A desirable benefits package will help you stand out against the competition, attract new talent, and retain existing talent.

Global Employment Organization (GEO) vs. Employer Of Record (EOR)

The terms GEO and EOR are interchangeable.

A Global Employment Organization is a company that hires employees on a company’s behalf, assuming all legal responsibility. Once a company signs a contract with a GEO and the GEO hires an employee, it becomes the official employer of record. Although the employee will still respond directly to the company, the company is not the employer. The employee is connected legally to the GEO as the employer of record. Should there be a contract breach or legal dispute, the GEO is liable, not the company. 

Global Employment Organization (GEO) vs. Professional Employment Organization (PEO)

A PEO is an organization that shares employment responsibilities with a company. In contrast, a GEO is an organization that takes full employment responsibility. 

PEOs and GEOs relieve companies of certain HR and payroll burdens to varying degrees, ensuring there are no compliance risks. However, GEO presents a more comprehensive solution for hiring employees abroad if you plan a global expansion.

PEOs don’t exist outside of the United States, and in some countries, using a PEO is not allowed. For example, co-employment is illegal in France and Switzerland.

Some PEOs present themselves as global PEOs or international PEOs. However, this is just an American term for a GEO since they have extra capabilities for helping companies hire abroad.

The following differences will help you decide what solution suits your enterprise best: 

Liability: GEOs take full responsibility for employees as an employer of record. PEOs only take some legal responsibility for employees which means the company is also liable for employees in case of any disputes. 

Employee insurance: GEOs provide employees with full insurance coverage as the employer of record. While PEOs offer some insurance coverage, the company must contribute some additional coverage to provide the full scope of protection. 

Employee contracts: GEOs are fully responsible for employment contracts since they are signed between the employee and the employer of record. This means the company is not liable in case of employee misclassification or any other contract disputes. PEOs, on the other hand, do not assume responsibility for employment contracts which means the company is responsible in case of any breach of the employment contract.

Business registration: A company that partners with a GEO does not need to complete business registration when hiring in a new country. However, with a PEO, the company must register in every country it hires employees. 

HR Services & Support: A GEO handles all HR requests as the employer of record, ensuring companies remain compliant with local laws, rules, and regulations. A PEO provides companies with HR support upon request. Still, the company is responsible for receiving and implementing the initial request.