The Role of International PEOs in Managing Remote Workforces

Managing a remote workforce is as much a challenge as it is an advantage. It opens doors to a bigger talent pool, more cost savings, and better workflow, yes. But it also brings complexities in compliance, payroll, employee engagement, performance management, etc.

This can happen mainly because the expansion capacity in remote teams can get quite high. And due to this, the internal HR teams face the burden of managing large remote teams spread across different geographies and time zones.

So, how do companies usually solve this challenge?

They choose International PEO (Professional Employer Organisation).

In this blog, as the title says, we discuss the role of PEOs in managing a remote workforce.

What is international PEO?

In the simplest words, an international PEO is a third-party service provider that helps companies hire and manage employees in foreign countries.

Essentially, an international PEO acts as the official employer on paper. They handle multiple HR functions of the business. By doing this, an international PEO helps your business grow faster, with lower risk and lower costs than establishing a foreign subsidiary.

The infographic below shows the scope of functions an international PEO manages for you. And don’t worry, we will be talking about each of these points in more detail later in the blog.

Before we get into the ‘role of PEO’ part of this blog, let’s fully grasp why remote workforces have gained such a positive response from companies.

Why are companies embracing remote workforces?

Harvard Business Review recently conducted a study. It was conducted by Nicholas Bloom and James Liang, a co-founder of a Chinese travel company called Ctrip. In this study, they put half of Ctrip employees in a work-from-home arrangement and half were made to stay in the office.

Studies showed that people working from home completed 13.5% more calls than people in the office. Work-from-home employees were not only happier and less likely to quit but were actually more productive than office workers.

In addition, the Ctrip company saved around $1900 per employee on furniture, electricity and space costs.

1. This proves that a remote workforce is a more cost-effective model, as it helps you reduce overhead costs.
2. A remote workforce helps with global talent expansion, which further fosters a diverse thinking and working culture.
3. It has proven to be a catalyst for reducing burnout and allowing a more flexible work style. This gives employees control over their hours and further helps their mental health.
4. This, in turn, has increased employee satisfaction and retention.
5. Allowing a work-from-home model significantly lowers employee turnover as employees actively prefer working remotely.
6. We already covered a study where working remotely increased productivity and improved the quality of work.
7. It’s a situation where companies get the expected output from the employees, the employees, too, get a healthy work-life balance. This makes them feel valued, keeps them happy, and improves their mental health.

I mean, from what I wrote up there, I pretty much sold the remote working model to myself. It’s a win-win for both companies and employees.

What are the key challenges of managing a remote workforce?

If you remember, I mentioned it is as much a challenge as it is an advantage. The challenge part here is not a remote team but managing a remote workforce. Let’s see what these challenges are.

1. Since the entire team is pretty scattered across different regions and time zones, communication and collaboration can become a real challenge. Some employees could even be working outside the headquarters’ official hours.
2. This scatteredness also makes it difficult to build trust among employees and the company.
3. This lack of trust further causes employees to feel a disconnect from the company and its culture. Even if companies have a healthy culture – it’s not truly sustainable if it’s not inclusive of all employees, remote or not.
4. This disconnect can become a lot serious than it sounds. Employees can get at risk of social isolation if their interactions are limited to a small screen. Social isolation can lead to a drop in productivity which creates a domino effect eventually impacting the revenue of the company.
5. Another technical challenge companies can face is providing necessary technology to remote employees. This includes IT infrastructure, various softwares to help employees with their work, any support they might be in need of.

And that marks some of the most frequent challenges faced by companies managing a remote workforce.

Now, I ask the same question I asked in the introduction: How do companies usually solve these challenges?

They go to an International PEO (Professional Employer Organisation).

Let’s understand the role an international PEO plays in managing a remote workforce.

How does international PEO manage a remote workforce?

A business can essentially get many benefits of global expansion with an international PEO. Let’s get to the grain of this and understand exactly what role they play in managing a remote workforce and how they do it.

1. Reduced administrative burden

International PEO takes off a good chunk of your administrative tasks – the HR function. As a result, you’re left with one less thing to worry about. Not only does it reduce administrative burden, it also frees up your time and resources to be allocated to core activities.

2. Local compliance management

While managing a remote workforce, an international PEO is primarily responsible for dealing with the local compliance of your remote team. As a business, you can face compliance challenges in forming a remote team. The international PEO helps you with these challenges by taking care of compliance for payroll, employee benefits, leave management, etc.

3. Risk mitigation

With local compliance also comes risk mitigation. While providing these international PEO services, your partner assumes the responsibility for all legal risks relating to your employees. Therefore, they make sure they keep mitigating risks in international hiring for your company. They do this by implementing various strategies like

• Contingency planning (making strategic plans if any risks are materialised),
• Risk transfer (adjusting and shifting compliance responsibilities through),
• Testing, etc.

4. Recruitment and onboarding

Now, in my opinion, this is one of the best services a PEO can provide. Why? Hiring, retaining, and managing employee onboarding are difficult tasks in the HR function. If you’re looking to enter a new market, your reputation plays the biggest role in attracting the best talent. And, yes, an international PEO can help you with that – not just building a strong rep but also sourcing, screening, and handpicking that top talent that will help your business grow.

5. Employee benefits administration

One of the best ways to offer employee benefits to your remote team is through international PEO services. The main reason for this is that these PEO partners can negotiate and help you give the best and the most competitive benefits to your employees — the kind of benefits that employees of Fortune 500 get. Yes, a good international PEO partner can do that for you.

6. Payroll processing

Now this falls in one of the basic and necessary services int. PEOs can offer you. It’s basic because you won’t be able to pay your employees without having your own legal entity in that country. That’s where your PEO partner steps in as a legal employer and adds your employees to their payroll.

For more information, read how int. PEO manages payroll services in India.

7. Employee contract management

Contracts, I feel, are one of the most important elements to have in your employment relationship with your employees. They safeguard both the employer and the employee from unnecessary disputes and exploitation. Remote employees who are not so familiar with your work culture need these contracts as a metric to trust you — and for you as an employer to trust them.

8. Communication facilitation

Another basic but very important point. A PEO does not interfere with your day-to-day communication, yes. But as an HR, it plays a crucial role in making your employees feel happy and connected to the company. It also helps your employees with employee support, and good communication is essential. Let’s see how.

9. Employee engagement and retention

Like I said, one of the key elements of managing a remote workforce is taking care of your employees. This includes conducting engagement activities, creating a rapport between the employee and the company, and making sure retention rates stay high. Other than engagement activities, international PEOs keep retention rates high by offering them perks like competitive benefits, quick support, etc.

10. Employee training

Yet another benefit of an international PEO services managing a remote workforce for you is that they help immensely with employee training. They don’t provide training themselves; they find the best local trainers for your employees and manage the whole training sessions.

And with that, we come to the conclusion that managing a remote workforce becomes n times easier with international PEO services by your side. They help you in more ways than you might expect.

Here’s an important read I recommend: A Checklist for Choosing a PEO Service Provider

Conclusion

“If a company doesn’t go remote, they’ll steal your most talented people”, are the words of Chris Herd, Founder & CEO @FirstbaseHQ.

When international PEO services manage your remote workforce, it’s you stealing the most talented people off the market. This helps you set a good pace in the market, helping you overtake your competitors with a good strategy.

You can focus better on scaling your business while with their expertise, they ensure butter smooth operations across borders. And having this exceptional support in this globalised economy makes all the good difference for your business, setting you up for accelerated growth.

Whether it’s providing good training for your employees or lesser HR headaches for you, international PEO services are a strong and valuable partner. So, waste not another minute — if hiring and managing a strong remote workforce is on your mind — reach out to international PEO services today.