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International Full Service HR Outsourcing Explained

By July 12, 2016 No Comments
International Full Service HR Outsourcing Explained

Many small to midsize firms opt for full-service HR outsourcing because they do not have the time and expertise to handle the complexities of international employment in-house. This practice is extremely common among firms during their global expansion. To help you determine if this is the best route for your business, we’ve laid out the explanation of what a full-service HR company does, what the benefits are, and how to choose the best service for your business.

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What does “full-service HR outsourcing” do?

The question should be more like, what does full-service hr outsourcing not do?  HR outsourcing firms help businesses in all areas of human resources. Outsourcing payroll is the most common form of outsourced HR both internationally and locally. Payroll should be included in your international full-service HR outsourcing consideration.  Variables in employee contributions, including factors like the 13th-month salary, benefits withholdings, and taxation are all minefields to navigate. The implication of having a payroll or withholding error in your target country can be huge as well as how much human capital power it takes to run each payroll.

Full-service HR outsourcing can also include international consulting, which helps you build momentum and develop an effective strategy using tried and tested methods in your target country.  A best practice when including a consulting service in your HR plan is working with a firm that has experience in your new country. They can fill you in on the culture, community, and customer-base you’re likely to encounter.

Overall, a full-service HR outsourcing plan is basically like a Professional Employer Organization (PEO). When speaking specifically on the grounds of working overseas, you’ll likely work with an International PEO. This service manages HR responsibilities including:

  • Payroll
  • Benefits management
  • Hiring/onboarding
  • Firing
  • Tax compliance

It becomes a co-employer of your company’s workers by taking full legal responsibility of your employees. The PEO and business owner become partners, essentially, with the PEO handling all the HR aspects and the business handling all other aspects of the company.

Why is full-service HR outsourcing beneficial?

Chances are, you and your colleagues do not have time to manage employment laws personally, especially in an international market. These laws are complex and difficult for even seasoned experts to understand.  Companies rely on outsourced HR services is because they don’t have the time or expertise to handle the complexities of employee relations during their global expansion. Working with full-service HR outsourcing services allows companies to pass all of their employment responsibilities onto their partnering firm.

In addition to saving time and headaches, your company may also open up room in your budget by saving money. Working with outsourced HR services usually, leads to a reduced benefits rate.

Choosing the Best Full-Service HR Provider

If speed and flexibility are most important, consider an International PEO. Talk to your colleagues in similar fields or those who have headed a global expansion and see what firms they work with to manage their HR services. We believe in the power of a good referral.

Other important factors to consider when choosing a full-service hr outsourcing option are:

  • Does the provider have experience working in your target country?
  • Does the service have a dedicated (and domestic) team or team member that is available to help you via phone or email?
  • Is the cost of the service going to greater than its benefit to your company?
  • Is the company willing to provide you with the services you need and not try to give you unnecessary add-ons?

If you want to understand more about your options for global expansion, contact us today!

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