All You Need to Know About Professional Employer Organization (PEO) in the Philippines

In order to focus on their core strengths, such as developing, enhancing, and selling goods and services, small and midsized (SME) business owners frequently turn to PEOs for assistance with important and strategic HR management. You might be able to expand your company while feeling more secure doing so with the professional and strategic advice of PEOs. Let KMC help you with these!

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What is Professional Employer Organization (PEO)?

PEO stands for professional employer organization. What do PEOs do? Professional Employer Organization is an organization that empowers a joint employment relationship with an employer. The agreement in this process is that the PEOs can share or rent out their employees to the companies. As such, there becomes a shared responsibility and management of employee-related obligations and liabilities. In this process, employers are given the opportunity to outsource HR duties, such as compensation, benefits, tax, payroll management, etc.

What does a PEO do?

Integrating PEOs into small to medium enterprises (SME) can offer crucial benefits to its operations. It boosts efficiency and productivity and also raises the overall quality of management of the companies. Plus, it takes off the burden of some major responsibilities from employees. PEO is also known as business process outsourcing, HR outsourcing, or co-employment services. In line with this, companies can hire PEO to manage employee benefits, human resources, and compensation. PEO also supplies services to different types of industries and sizes of organizations.

How Professional Employer Organization (PEO) Works

After learning the basics of PEO, it’s time to take a closer look at its process and service inclusion. This knowledge is crucial for business owners looking into working with PEOs to ensure it’s in line with their company vision.

Process

Professional Employer Organization (PEO) continually seeks employees for talent insourcing at a mutual agreement on the rate (usually hourly or monthly). Under this arrangement, it is within the PEOs responsibility to handle employee management, behavior, tax compliance, and all employment-related matters.

Meanwhile, the client company is responsible for managing the daily tasks of their remote teams from the PEO. And while PEOs provide insource talents to the client company, they are still the ones recognized in the employer of record (EOR).

In this manner, the client company benefits from the services done by the employee without needing to handle any human resources work.

HOW PEO WORKS

SERVICE INCLUSIONS

Professional Employer Organization (PEO) offer various professional services essential to a business, including a number of administrative tasks. Below are a few service inclusions a company can get from a PEO :

Using PEO in the Philippines: What are the Benefits?

The Philippines is one of the top places to look for PEOs when it comes to cost efficiency. The country is booming with young, reliable professionals that can be an asset to your labor force. Below are some of the benefits of using PEO in the Philippines:

Recruitment and Hiring

The co-employment setting lessens liabilities and risks to the client business in the recruitment and hiring process. Aside from handling employee compensation, they also manage all the necessary tasks in the hiring process, including interviews and background checks.

Minimize Operational Cost

Working with a PEO enables a business to save on operational costs. It is because it becomes the PEO’s task to handle administrative and HR-related tasks. Thus, it leaves room for the business to focus on boosting productivity, gaining maximum profit, and growing the business overall.

Seamless Management of Payroll & Tax

As mentioned, PEOs handle the payroll processing once a business works with them. This benefits the business by removing administrative tasks from their plate that often impacts the productivity of HR employees. However, note that it is still the business’s responsibility to handle the preparation before the payroll processing.

Reliable Compliance Assistance

Laws and regulations on employment are constantly getting modified. And of course, the task of keeping up with all these changes involves money. Fortunately, PEOs also cover assistance on the compliance of businesses to employment laws and regulations. They can provide the company with HR professionals that can guarantee employee compliance.

Strengthen Employee Development & Benefits

The principal goal of the company-PEO relationship is to provide employees with convenient and practical benefits while lessening workload stress. A PEO offers benefit plans to the business’s employees. These plans include a number of coverage, such as medical, dental, vision, life insurance, as well as retirement plans.

With this, the business gains more opportunities to benefit from talent insourcing and an enhanced workforce. Being able to focus on more critical tasks leads to increased productivity and quality of work within the company’s core team.

Why Businesses Subscribe to PEO Services

How does PEO help businesses?

Business owners can focus on growing their company through onboarding quality employees provided by PEOs. This co-employment arrangement allows businesses to minimize administrative work while ensuring that the employment process remains compliant with laws and regulations.

A PEO can especially be a massive benefit in terms of the work environment for small businesses. Having an expanded network of remote teams boosts productivity, cost-efficiency, localized support, and business development.

Who should work with the Professional Employer Organization (PEO)?

There are many aspects to consider as a beginning entrepreneur or small business owner, especially in terms of finances. Since they are only beginning to establish their brand, a number of financial issues may come up in the process. As such, it’s critical for a company to employ quality staff and workers without compromising the numbers. At the same time, the growth of huge companies and corporations also often translates to issues with administrative tasks. Oftentimes, this leads to spending more on human resources which can ultimately hinder the company’s success. And from the employees’ perspective, it’s not worth it to give their all to a company that doesn’t prioritize their benefits. In this case, the services PEOs cater will come in. The co-employment arrangement involved in working with a PEO creates a win-win situation. It reduces the business’s need to handle some financial tasks while mitigating risks and ensuring the well-being of all employees. Note that PEOs place their utmost priority on hiring only the best employees to work with a company. They guarantee the business’s compliance with all required laws and regulations. As such, a PEO is right for a business if they are looking for the best staff at a cost-efficient price.

Need a Professional Employer Organization (PEO)? Work with KMC now!

KMC takes pride in our client-centric solutions. We commit to placing our 100% effort in building trust with all our partners and clients. Contact us today, and we look forward to being a part of your company’s success!