Key takeaways:

• PEOs and EORs are HR outsourcing solutions that can help you manage your international hires.
• A PEO can provide economies of scale, while an EOR can provide local expertise.
• When deciding between PEOs and EORs, consider cost, control, local expertise, and administrative burden.

What’s a PEO (Professional Employer Organization)?

A PEO is an HR outsourcing solution that provides a range of HR services, such as payroll, benefits administration, and compliance. When you work with a PEO, your employees or independent contractors become employees of the PEO, which means the PEO takes on many of the legal and administrative responsibilities of being an employer.

One of the advantages of working with a PEO is that they can provide economies of scale, allowing you to offer benefits and HR services that may not be available to smaller businesses. Additionally, a PEO can handle many of the administrative tasks involved in hiring and managing employees or independent contractors, freeing up your time to focus on your core business.

However, one of the downsides of working with a PEO is that you may have less control over your HR processes. You may also need to share sensitive information with the PEO, which can be a concern for some employers.

What’s an EOR (Employer of Record)?

An EOR is responsible for all aspects of employment, including payroll, taxes, and benefits. When you work with an EOR, they become the legal employer of your independent contractors, which means they take on all the legal and administrative responsibilities of being an employer.

One of the advantages of working with an EOR is that they can handle all of the administrative tasks involved in hiring and managing employees or independent contractors, freeing up your time to focus on your core business. Additionally, an EOR can provide local expertise and help ensure compliance with local regulations.

However, one of the downsides of working with an EOR is that it can be more expensive than working with a PEO. Additionally, you may have less control over your HR processes, and you may need to share sensitive information with the EOR.

So, how do you choose between a PEO and EOR? Here are some key factors to consider:

Cost: EORs are generally more expensive than PEOs, so consider your budget when making a decision.

Control: If you want more control over your HR processes, a PEO may be a better option. However, if you want to outsource all HR responsibilities, an EOR may be a better fit.

Local expertise: If you're hiring independent contractors in multiple countries, an EOR can provide local expertise and help ensure compliance with local regulations.

Administrative burden: If you want to free up your time to focus on your core business, both PEOs and EORs can handle many of the administrative tasks involved in hiring and managing independent contractors.

Ultimately, the best HR outsourcing solution for your business will depend on your specific needs and preferences. By considering the advantages and disadvantages of both PEOs and EORs, you can make an informed decision that supports the growth and success of your business.

Skip the PEOs and EORs—try Thera instead to save time & money

If you’re hiring contractors, you’re probably spending too much time on their payroll, contracts, and tax documents. Which is why we built Thera, which saves you 90% the time you spend on contractor paperwork each month.

With Thera, you can compliantly hire your contractors in 150+ countries, onboard them in minutes, and pay them all at once (in a click). It’s global contractor payroll, finally simplified. More affordable and faster than just about any PEO or EOR solution you’ll find.

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