A global employment organization (GEO) is a third-party company that provides international employment solutions for companies to hire, pay, and manage global talent.
A GEO serves as the legal employer of a company’s distributed workforce. It allows businesses to legally engage employees across borders without having to first set up local entities or risk violating local employment laws.
A GEO hires remote and international employees on a company’s behalf. It also ensures compliance with global labor and tax laws and handles HR responsibilities while the company retains control of day-to-day workforce management.
A GEO typically handles all global HR management tasks, such as:
- Complying with local employment and tax laws
- Administering payroll and benefits
- Developing employment contracts
- Hiring and onboarding new employees
- Processing work permits and employee visas
GEO vs. PEO
While a GEO is an organization that takes full employment responsibility for another company, a professional employer organization (PEO) is an organization that shares employment responsibilities with a company.
A PEO acts as the company's co-employer or outsourced HR department. Similarly to GEOs, PEOs take on responsibilities such as hiring, payroll processing, benefits administration, and tax management on the company’s behalf.
But unlike GEOs, PEOs don’t take on total liability for noncompliance—that falls on the company. For example, if your PEO is audited and found guilty of miscalculating payroll contributions for your employee in the Philippines, your company will also face penalties and be required to pay damages.
PEOs also typically partner with small and medium-sized businesses rather than enterprise businesses. Additionally, PEOs only exist domestically, and co-employment is even illegal in certain countries.
A GEO handles all aspects of employment administration and is the full legal employer of the company’s distributed workforce, meaning it takes full responsibility for compliance.
GEO vs. EOR
A GEO and employer of record (EOR) are interchangeable terms. Companies typically use either term when partnering with a legal entity to hire and manage their distributed workforce.
More specifically, when a company partners with a GEO to hire and onboard their international talent, that GEO becomes their employees’ EOR and assumes all employment responsibilities on the company’s behalf, including onboarding, payroll and benefits administration, relocation and immigration needs, and compliance with international employment, payroll, and tax laws.
Read more: PEO vs. EOR: Which Is Right For Your Organization?
When to use a global employment organization
A GEO is a valuable partner for businesses interested in testing new markets and quickly building a distributed workforce abroad. GEOs mitigate risks associated with international employment while lowering the cost and time it takes to expand abroad.
Companies often partner with a GEO to explore new markets and build local teams without the need to establish foreign entities. A GEO helps companies quickly hire distributed employees in new global markets, gain local knowledge, and reach new customers and clients.
Companies in the process of establishing a foreign entity can also work with a GEO to serve as an employment bridge solution to reduce risks in the event of an entity or banking delay.
Benefits of using global employment services
GEOs act as a catalyst for global expansion by removing operational burdens, reducing costs, and maintaining compliance so companies may focus on their core strengths, capitalize on growth opportunities, and ultimately achieve their global business goals.
A GEO partner offers many benefits, helping global companies with the following:
Save time and money
Setting up a local entity in a foreign country is time-consuming and expensive, and companies looking to test new markets or hire a small distributed team may not be ready to commit to entity establishment.
A GEO allows companies to hire talent quickly and efficiently in new markets without building or acquiring legal and administrative infrastructure. Through a GEO, companies can avoid the costs of entity establishment, minimize setup costs and ongoing operating expenses, quickly reach new customers, and quickly generate new revenue streams.
Maintain compliance
Employment contracts, tax requirements, and labor laws vary from country to country, and companies unfamiliar with local requirements risk noncompliance.
A GEO has expertise in international laws and regulations, minimizing companies’ legal risks and ensuring smooth operations in each market. A GEO ensures global hiring compliance with local laws to help companies avoid tax and payroll processing errors and support their distributed workforce.
Attract top talent
A GEO allows companies to access a broader pool of skilled talent easily. Businesses can find the best candidates, regardless of location, and gain insights into new markets.
A GEO also helps companies relocate employees when needed by handling proper visa and permit obtainment and offers competitive and comprehensive benefits that improve international talent attraction and retention.
Receive ongoing HR support
GEOs handle several international HR tasks on a company’s behalf, freeing up their internal HR team’s time to focus on other impactful responsibilities. Distributed employees also receive ongoing local HR support wherever they live and work.
Increase scalability
GEOs offer flexible solutions that adapt to a company’s evolving needs. Companies can easily scale their workforce up or down in different markets without the administrative burden of managing local entities. This assistance allows for quick responses to changing market demands and opportunities.
Avoid misclassification of contractors
Many companies directly engage contractors to target specialized, international talent and avoid the need for entity establishment. However, employment laws vary worldwide, and companies that hire contractors also risk misclassifying contractors as employees. A GEO helps companies avoid compliance risks when engaging contractors.
Read more in our complete guide to employee and contractor misclassification.
Hire talent in 185+ countries with Velocity Global
Velocity Global is a market leader in providing global employment solutions that leverage a cloud-based platform and local experts across 185 countries to help companies compliantly and quickly build and support a globally distributed workforce. Learn more about our EOR solution.
