International employee leasing is a modern technique companies are using to help minimize their international business operations overhead and/or increase their global expansion flexibility.
Just like a domestic Professional Employer Organization (PEO) arrangement, a third party company serves as Employer of Record in your target country and typically this company also manages your employee’s HR functions (payroll, benefits, risk management, etc.) in that country.
International employee leasing is synonymous with Foreign Subsidiary as a Service (FSaaS) and International PEO which are two services we offer in over 185 countries. Typically companies are evaluating this type of international employment option against creating a foreign subsidiary, using foreign independent contractors, or using business process outsourcing (BPO).
Why Choose International Employee Leasing:
Just like domestic PEO relationships, there are benefits and trade-offs for this type of employment relationship.
Benefits
- Speed
- This employment option tends to be executable in days versus months
- Flexibility
- Companies can add or remove employees with a service-oriented structure; good for testing markets and being more Lean about your global expansion
- Compliance and IP protection
- You can still hire internationally compliantly with this option and create enforceable employment contracts to protect your IP
Trade-Off
- Inability to hold physical assets in country
- If your company is in manufacturing or real estate, you will most likely have to create a foreign subsidiary company in your target country because you can not hold physical assets through your employee leasing provider
- Depending on a third party provider
- Just like any other service, you will not have 100% control with employee leasing. The thing to do is weigh all the benefits for your particular situation against the alternatives and multiply by your confidence factor with the provider you are talking to. Ask your provider to provide a client satisfaction or Net Promoter Score (NPS) to help judge how good they are.
International Employee leasing, International PEO, and FSaaS are revolutionizing global expansion for companies looking to have a lighter footprint. If you have more questions about any of these services please do not hesitate to reach out.
