There are multiple ways to find, recruit, hire, and manage remote talent from different parts of the world — establishing a local entity in the hiring country, working with an Employer of Record, hiring a Professional Employer Organization, or hiring independent contractors.
When U.S.-based tech companies make the decision to hire global talent in emerging tech markets and approach the hiring process, they will have a decision to make about how they will accomplish their goals and find the talent they need to drive success. Truss is here to help you find the talent you need to succeed and this quick comparison will highlight the differences between a PEO and an EOR — and help you make the right decision for your company.
Contact Truss today for more information about our global hiring platform and employer of record services!
READ MORE: EOR vs. Legal Entity in Central Asia
Employer of Record vs. Professional Employer Organization
It is not always easy to navigate the global hiring process and find remote employees around the globe that will meet your skill and salary requirements — but an employer of record or professional employer organization can help tech companies accomplish their goals. But they do it in different ways and each provides its own competitive advantages.
An employer of record — like Truss — is ideal for tech companies searching for talent in emerging tech markets or for hiring talented individuals quickly in different parts of the world. A professional employer organization performs well for tech companies that want to continue to grow in their home country or where they have an established legal entity, but still want to outsource some aspects of the business, like human resources, employee benefits, and more.
The primary differences between an EOR and a PEO hinge on their employment model and operational control, the legal support provided by each entity, legal requirements, and the financial costs of each employment option. Here is a closer look at the differences between an employer of record and a professional employer organization:
EOR vs. PEO: Employment Model and Operational Control
The foundational difference between an employer of record and professional employer organization is the employment model that they each use. Tech companies that partner with an employment of record give operational and management control over remote employees to the EOR to handle legal and financial challenges — leaving the company to focus on overall strategy. A professional employer organization creates a co-employment relationship where the PEO and the company share the responsibilities of employing and managing remote employees.
EOR vs. PEO: Legal Requirements
When you make the decision to hire remote employees in Central Asia or other regions around the world, it is important to understand the legal requirements for employment — whether that involves an employer of record or a professional employer organization. When you use a PEO to find and hire remote employees, you must first establish a legal entity in the country where you hire — which involves higher costs and additional legal challenges. An employer of record does not require you to establish a legal entity prior to hiring.
EOR vs. PEO: Legal Support and Responsibility
A key difference between an employer of record and professional employer organization is the legal support and value provided. The co-employment framework of a professional employer organization means that you and your company share the legal responsibility and risk of any violations of local employment laws. An employer of record — like Truss — takes on full and complete legal responsibility and risk of employing remote employees to ensure that you do not violate local labor laws and do not face potential fines.
EOR vs. PEO: Financial Costs
The financial cost structure of an EOR vs a PEO may inform your decision when you decide to hire remote employees from around the world. Professional employer organizations typically charge an initial fee and a percentage of the payrolls to support international businesses — but also involve an additional $3,000 – $15,000 to establish a legal entity. Employer of record providers charge a flat fee per employee that includes onboarding, management, and legal support.
READ MORE: Differences Between an EOR and an AOR
Why Hire Truss as Your Employer of Record
Finding the right employment model for your tech company is an important step in your growth and success — and understanding the differences between an EOR and PEO is an important first step to take. While both models provide an element of administrative relief for HR and payroll, the right choice depends on how quickly you want to hire and where you want to scale.
U.S.-based tech companies that want to cut through the red tape and reduce the financial costs required to establish local entities in a new market will find that an Employer of Record is the right choice. By trusting an employer of record as your partner, you eliminate your own legal liability and can focus on what matters most — building a talented team and refining your product.
Truss simplifies your ability to find, recruit, hire, onboard, and manage remote employees in Central Asia by handling everything from local employee benefits to compliance with international labor laws. When you provide Truss with a list of skill and salary requirements, we will use our years of experience to find qualified candidates for your tech company, and provide onboarding assistance when they join your team. When you choose Truss, you gain a strategic ally that is committed to ensuring your global team is efficient, compliant, and ready to hit the ground running.
Contact Truss today and build your remote global team in Central Asia!
