3 Reasons to use an Employer of Record during a Crisis

For a long time, a professional employer organization (PEO) or an employer of record (EOR) was merely considered a go-to tool for companies looking to grow. 

Although this observation isn’t wrong, a PEO solution or and EOR service can also be used in times of crisis, such as the current COVID-19 pandemic we are facing.

When the economy is turned on its head, hitting organisations and their workforce hard, the need for expert HR knowledge is crucial. This is where access to a PEO becomes quite enticing.

The most obvious reason why companies tend to seek PEO assistance for their growth and expansion projects is because it provides them with flexibility and peace of mind.

What most don’t consider though, is that crises, or any other unexpected turbulence, create equally as many complications due to companies having to manage unforeseen costs while protecting employees.

Partnering with an Employer of Record provides access to a team of HR experts with extensive HR-experience in different industries who are able to assist your organisation in navigating the complexities of doing business and managing employees in challenging times. Unsure if this suits your business? Discover 3 ways in which it can help.

But first, here’s a quick refresher:

What is a PEO or EOR?

Employment outsourcing comes in various forms, though with the same premise. Services and providers may be referred to as:

Employer of Record (EOR)

Portage

Co-Employment

Professional Employer Organization (PEO)

Global Employment Outsourcing (GEO)

Essentially, this refers to the service of outsourcing a part, most or all of your business’s employment, liability and administrative duties.

What are the Benefits of using a PEO during COVID-19?

1. Staffing Needs

If you have been confronted with a mandatory or involuntary decline in headcount whilst keeping your workload, a recruitment freeze or greater client demand your organisation may benefit from a fast, compliant and agile PEO workforce solution.

Considering that, as part of the PEO service, the vast majority of employment responsibilities are outsourced to a third party, using a PEO ascertains that the hired staff are no longer reflected on your payroll nor do they absorb any headcount. Instead, they appear as a business expense and are paid through a single invoice.

Since hiring and onboarding commitments aren’t usually the most appealing to (or even possible for) organisations during times of uncertainty, a PEO service can be the ideal solution to quickly ensure that you have the right people in the right place, to ensure your organisation comes out stronger from this crisis. 

Compliant onboarding can be arranged within the same day (if no visa is required) and offers flexibility where required by the organisation. 

Should terminations be inevitable, such as can be the case during an economic crisis, a PEO helps to take the burden off of your shoulders as the PEO will be responsible for this process.

2. Immigration 

A PEO can also be used to hire and sponsor foreign skilled talent on behalf of an organisation.

Immigration and visa applications can be daunting and complex processes, requiring thorough preparation and knowledge to present the application in the most favourable and successful way.

When you add a global pandemic to the mix, immigration processes become increasingly more complex, even though foreign talent can be key to your organisation’s success.

Under the current circumstances, the Department of Home Affairs appears to be looking at applications more selectively, which means that applications will be held at a higher standard. In the near future, a review by the Department of Home Affairs will also be conducted, which may lead to less people being eligible for visa sponsorship

Although borders are currently still closed, travel exemptions can apply to some industries and occupations. Additionally, some foreign talent may already be in Australia.

In this case, hiring and sponsoring an employee through a PEO simplifies the process for your organisation, since they have the sponsorship licence, industry expertise and contacts to do so. A PEO can also help you by providing guidance on the likelihood of travel exemptions.

3. Compliance Management

Whenever there is a crisis, we tend to see legislation, employment terms  and government measures change at an incredibly rapid rate.

This makes it difficult for employers to keep up and this can feel overwhelming. Yet, making sure that your organisation is compliant and makes the most of available opportunities is very important for business continuity. 

A PEO has HR and Payroll specialists in-house whose core responsibilities include staying on top of changing laws so as to be able to answer the variety of questions regularly thrown at them. Equipped with such knowledge, they can also help design new tools and processes that meet both employers’ and employees’ needs. All in all, HR professionals are experts at handling periods of crisis as part of their role.

Something worth noting is that partnering with a professional employer organisation also helps mitigate the risks associated with compliance violation. Consequences of non-compliance can have significant financial implications. Therefore, it’s most certainly worth investing in a partner to take care of HR and Payroll compliance, leaving your organisation with more time and resources to focus on your core business.

In preparation for the “new normal”, companies need to focus on what they do best. This means delegating and outsourcing what they can. 

An EOR comes in handy as it takes away liability worries, administrative burdens and provides HR excellence at your doorstep (or on the other end of the phone line in this case). 


Need Expert EOR and PEO Solutions in Africa?

Africa HR Solutions offers a full range of reliable services to facilitate your workforce management on the African continent:

  • Hire people on the African continent without a registered entity
  • Complete payroll rundown and management
  • Central point of contact for all your queries
  • Guaranteed compliance to local laws
  • Professional indemnity and employer liability

As always, Africa HR Solutions guarantees 100% compliance for your business operations in Africa

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