No doubt, working with a professional employer organization (PEO) helps reduce the overall burden of managing the administrative or human resources (HR) services of the employees in an organization. In short, PEOs help their partner company handle the complex matrix of HR functions effectively. However, knowing the PEO benefits isn’t enough. You also must choose the right PEO partner who is a seasoned player in the PEO industry and capable of executing tasks on your behalf responsibly.
Choosing the most reliable Indian PEO isn’t a highly challenging process. Yet, you need to set some parameters and do some research before choosing one as not all PEOs have the same credibility and experience when handling their tasks and responsibilities. Also, service offerings may vary from one PEO company to another.
Based on this backdrop, this blog has explained major criteria that you must consider when choosing the best PEO companies in India. However, you can expand your research and study other factors depending on your specific business needs and nature. Before we dive into the key factors, it’s imperative to know the meaning of an Indian PEO. One vital reason is that the term “professional employer organization” has changed its meaning when used in India.
What is an Indian PEO?
As a reader, you must be well versed about what is a PEO, and in short, an Indian PEO can be technically referred to as an “international PEO”. One key aspect of international PEO is that a foreign business can enter the Indian market without setting up a legal entity when partnering with an Indian PEO.
On the contrary, a PEO service is used in the US when a company wants a co-employment arrangement for its employees; both the client company and the PEO company must have a legal entity in the state.
An international PEO, like a PEO service, provides a range of HR services and solutions to ensure effective engagement and management of your remote employees in India. Similar to the PEO model, the main services of an international PEO include payroll, employee benefits, compliance and risk management, and insurance.
Unlike the co-employment arrangement that prevailed in the PEO service, international PEO solely takes complete responsibility for handling the administrative functions of your Indian employees. With your PEO partner’s assistance, you can dedicate ample time and liberty to focus on your core business activities, while your employee management is well taken care of by your partner.
It’s a wise decision to work with an international PEO to operate a business or build a team in India. By partnering with an international PEO, you can easily hire Indian talent remotely at a reduced cost and operate your business or team without any complaint risks. Also, you can easily align them with your business goals and increase your team’s productivity.
Key Criteria to Choose the Best Indian PEO
Experience and Performance Record
A good PEO service provider usually has a solid performance record and a high customer satisfaction rate with its services. You must prepare a checklist of the following points to evaluate a service provider:
- Testimonials and case studies
- Total number of global clientele and their employees handled
- Reviews of the company through Glassdoor, Indeed, and Ambition Box
- Whether an ISO-certified company or service
- Knowledge about your specific industry
- Getting references and referrals from their existing or previous clients
Service Offerings and Customized Services Availability
PEO service providers in India generally demonstrate their expertise in navigating local regulations and compliance challenges as their key service offerings. Moreover, an international PEO typically offers low-cost administrative services, including payroll management, compliance assistance, medical and insurance, employee benefits, and risk management. Check the following factors:
- Availability of customized services or solutions as per your specific business requirements
- Service charge applicable only for customized services
- Any add-on services such as recruitment, office infrastructure, and IT support
Transparent Cost Structure
Transparency in the service pricing and cost is a key aspect of a reliable PEO service provider. There should be a clear cost structure and breakdown, including setup costs, monthly fees, and additional fees for extra services. Understand the following points:
- International PEO services charge either a flat service rate ranging from USD 200 to 1000 per employee or 3-12% of the employee’s wages monthly.
- No hidden costs and unexpected expenses
Prompt Response and Active Responsive Support
Unnecessary delays in response to customers’ concerns and questions often hamper the decision-making process. Not only do passive responses kill the time and money of customers but they also hinder the quick operation of their teams. Choose a PEO service with prompt response and active service support. Look for the following facilities:
- Availability of 360-degree service support through calls or email
- Responding within 2-3 days or earlier from the day of inquiry
- Having a dedicated team for your service
Technology Assistance
A good PEO service must integrate user-friendly technology and collaboration tools to facilitate effective management of its core services, especially HR administration. Having a robust technology setup, such as payroll processing, data management, and employee self-services can streamline HR functions and improve management efficiency. Check service providers if they have the following technology solutions:
- Availability of a centralized platform to provide real-time access to information and data, such as HRIS or HCM platforms
- Data-driven HR systems for effective analytics and interpretation related to workforce performance
- Integration of advanced tools for self-service portals and interactive platforms to enhance the overall employee engagement experience.
- Compliance and security safeguards to comply with the latest regulatory updates
Ability to Provide Quick Team Operation
Quick team operation in the Indian market is often the top priority for foreign businesses. Generally, an experienced Indian PEO service provider provides all the facilities required to initiate business operations swiftly. Ideally, team operations under the PEO model take 2-3 days if a business has already a team of remote professionals in India. If you don’t have a team, then you must look for a service provider that can provide the following services:
- Recruitment as an additional service. Not every PEO service provider provides recruitment services.
- Local network for talent acquisition, onboarding, and documentation of new candidates
- Office infrastructure and logistics support for quick office setup
Flexible Contract Terms and Exit Clauses
What is a PEO partnership and the things we should look for in the partnership agreement are flexible employment contracts and exit clauses play a crucial role, allowing convenient adaption to changing business scenarios. Look for an Indian PEO service providing the following terms:
- Clear information on the contract termination, scope of services, and pricing structure
- Clause to end the contract prematurely and fair exit if both parties agree
- Less risky in case of legal complications and disputes, arising from the contract termination.
To help you make an informed decision, you must consider seven key criteria and select the service provider that excels in those criteria.
Know more: 4 Criteria to Select a PEO in India
Why Remunance?
Remunance, as a seasoned player, has carved its significant presence in the business of Indian PEO services and is known as the best PEO for startups in India. Being a thought leader in the Indian PEO industry, Remunance demonstrates its expertise and unwavering commitment to helping overseas companies set up a remote team and facilitate a swift business operation in India.
With a robust experience in the PEO service for 5 years and being the best PEO for startups in India, we’re very proud to see our achievement of serving more than 100 clients across industries and 800+ employees across 34 cities in India.
We believe in growing together, doing business ethically, and helping scale your business to a new height in the Indian market. Transparency and agility are our key strengths, standing out from the crowd and enabling us to win the trust and confidence of our global clientele. As an ISO-certified company, Remunance respects and secures our clients’ data in our high-security vault.
