Global Employment Organization (GEO)

Whether you want to scale your business effortlessly or need help entering a new market area, a Global Employment Organization (GEO) can help. This is also sometimes referred to as Global Employment Outsourcing (GEO). This specialized service provider helps you tackle local compliance regulations, payroll processing, and tax management, so you can focus on running your organization. While there are major differences between different GEO providers, they are all eligible to serve as your Employer of Record (EOR) and can help with important HR-related activities.

If you are considering an international expansion for your company, a Global Employment Organization may be able to help. Businesses turn to GEOs because they can reduce the amount of time and money it takes to move into a new market area. The GEO handles all of your paperwork and legal compliance, so you don’t have to worry about your local payroll, benefits, and HR services.

Unlike Professional Employer Organizations (PEOs), the GEO serves as the actual Employer of Record. This means it bears the legal responsibilities for hiring your worker, while you continue to manage the worker’s day-to-day tasks. Because the GEO is already set up in your target country, you are able to instantly hire new employees as you scale your business.

There are a few key differences between a PEO and a GEO. The biggest one is that a GEO serves as your Employer of Record, and a PEO does not.

A PEO is essentially your co-employer, so they take on some of the responsibilities of having an employee. While you can use a PEO when you expand into new areas, you’ll still need a local business entity of your own in order to hire the workers. A PEO only assumes some of the employer responsibilities, so you can both be penalized if the PEO makes a payroll, tax, or HR mistake.

With a GEO, you are actually hiring employees through the GEO. Because the GEO is the employer of record, it bears a large share of the employer responsibilities. You might handle the worker’s day-to-day tasks and manage the hiring process, but they are in charge of making sure your employment contracts, taxes, payroll, and HR activities are in compliance with the law.

Because of this major difference, GEOs are a more popular option for companies that want to expand into international territories. They take the burden out of the employment process, so you don’t have to invest as much time and money into your expansion.

An EOR and a GEO are essentially the same thing. At its heart, a GEO is a type of EOR that provides specialized services as part of its unique service model. 

When you hire a GEO, the GEO becomes your Employer of Record. In many cases, the GEO and EOR designations are chosen due to the type of audience the organization is targeting. If the EOR primarily focuses on international clients, they may be more likely to go by the GEO acronym. With either option, the organization takes on the role of your Employer of Record and reduces your legal obligations.

While some GEO services are offered automatically, other services are add-on options. Before you hire a GEO, you should carefully read through the contract to determine which services are included automatically and which ones cost extra. Most of the top-rated GEO providers offer the following services.

• EOR Services: In order to serve as a global employment organization, the GEO must offer EOR services. As an EOR, they are the legal employer of your workers, so they take on added duties and responsibilities.
• Payroll and Benefits Administration: When you move into a new area, there are different laws about required benefits, taxes, and payroll processing. A good GEO can handle all of these services. Whether you need help with providing leave under the Dutch Work and Care Act or compliance with the Affordable Care Act in the United States, the GEO can help.
• HR Administration: A GEO can handle key HR administration tasks, such as contract creation, onboarding, and offboarding.
• Immigration and Visa Support: Depending on the GEO you choose, the provider may be able to help with immigration and visa support. If you plan on relocating your current employees to new regions, the GEO can ensure they are legally authorized to work. The GEO may also be able to help you take advantage of important tax benefits, such as the 30% tax scheme in the Netherlands.
• Legal Compliance: A good GEO will ensure your company is in legal compliance, ensuring your company doesn’t accidentally run afoul of the law. They understand important labor laws, tax codes, and legal requirements, so you can be completely confident about your company’s compliance. By taking on the liability for major employment tasks, the GEO can significantly help with risk mitigation.

By working with a GEO, your company can enjoy a few important benefits.

Improved Compliance

One of the biggest reasons to work with a GEO is for the compliance benefits. It’s impossible to know what you don’t know, and two countries can have incredibly different laws. For example, cross-border companies that work in the United States and Canada have to navigate major differences between Social Security contributions and Canada Pension Plan (CPP) contributions before they can even consider the many different types of voluntary retirement plan benefits available in each country. By hiring a GEO, you don’t have to try to learn all of these compliance rules from scratch.

Reduced Time and Labor Costs

In many cases, using a GEO can lower your time and labor costs. If you didn’t use a GEO, you would need to set up your own entity and staff it with local payroll and HR professionals. Moving into a new market region would be a time-consuming, costly process. 

Better HR Support

For many reasons, a GEO can help with your talent attraction and retention goals. They can provide location-specific, in-demand benefits for your potential workers. Additionally, a GEO can sponsor immigration visas in certain countries, allowing you to bring your top talent along with you.

Easier Scalability

Another key benefit of using a GEO is the scalability potential. With a GEO, you can scale your workforce up and down as you go. You can instantly hire new workers without needing a local entity or payroll department of your own. 

In turn, this reduces the risks involved in your company’s growth. If it turns out your growth plans were overly optimistic, you can always scale down your company’s operations without having to worry as much about your sunk costs.

Better HR Support

With a GEO, you can reach out to a global talent pool. Your distributed employees can receive support directly from the GEO provider, so your domestic HR team can have a smaller workload. Additionally, GEO providers offer unique, cost-effective benefits packages.

While there are a number of important advantages involved in working with a global employment organization, this isn’t the right move for every company. Using a GEO provider makes sense in the following situations.

• International Expansion: If you are expanding internationally, there will be new laws to worry about. Rather than commit to staffing an entirely new headquarters, you can outsource your HR, payroll, and employer duties to the GEO provider.
• Fast Services: Expanding into new geographic regions can take a significant amount of research and operational planning. To shorten the expansion timeline, you can use a GEO to handle your legal legwork.
• Compliance and Risk Concerns: If you are concerned about the added risk and compliance issues involved in your expansion plans, it is essential to work with a GEO provider that understands local laws and regulations.
• Cost-Related Problems: Renting a new office space and hiring in multiple departments gets costly fast. By hiring a GEO provider, you can avoid renting out a large footprint and hiring on as many workers. This allows you to expand quickly for a reasonable cost.

While there are many benefits to working with a GEO provider, this isn’t the right choice for every company. For example, if your goal is simply to expand into another part of your state or province, you probably don’t need a GEO to serve as the employer of record. In most cases, you could use your existing in-house team to expand instead.

If your new international operations create a permanent establishment risk, you may want to avoid using a GEO. You’ll either need to set up a legal, permanent establishment of your own or talk to a tax lawyer about how to mitigate this risk. If you plan on having a large-scale, long-term presence in the country, the best option may be to just set up a new headquarters or branch. 

Finally, a GEO may not always be the right fit for certain company cultures. By making the GEO the employer of record, you are giving them some control over your workers’ benefits and payroll. They are essentially becoming a facet of your organizational culture, and you might not be willing to give them that control.

With hundreds of GEOs offering similar international employment services, it can be hard to know which provider would be best for your business. Check out our comparison guides, or get in touch with our international employment specialists to choose the best provider for your business.