Benefits of a PEO — Business expansion across borders can be exciting.
From putting together your global expansion plan to hiring more employees, reaching more customers and expanding your product/service reach, this exciting growth can, however present with a variety of changes.
Without matching the need to grow profitably with the effective management and planning required to execute the business expansion strategy, most organisations often struggle to achieve their expansion objectives.
Whether you currently operate in only one country or you’re exploring a global growth approach, providing the right answers to 2 key questions “Where are we going?” and “How will we get there?” is the first building block of a successful global expansion plan. Read on to discover how to assure the success of your global business expansion into Africa and the benefits of PEO in the process.
So, you’re thinking, where does your organisation get started with its market expansion plans for Africa?
Well, the first step is to research and decide on the country you want to expand to in Africa. There are 54 countries in Africa, and each has its own way of doing business.
For example, in our guide 7 reasons why you should expand your business into Nigeria, we shared compelling evidence to help you determine if the Nigerian market is the best fit for your needs/products or services.
Next, you need to draw up a resourcing structure to support your global expansion strategy. Do you have the in-house capability to execute the set objectives? Does your internal HR team have enough knowledge of the selected country or market to help you resource appropriately, or do you wish to consider outsourcing compliance and HR functions?
One of the mistakes many business leaders make while navigating the global business expansion process is underestimating the work to be done and being ill-prepared to manage a whole new set of challenges.
As a result, they end up losing sight of their strategic business activities and become distracted by the tactical, operational tasks associated with a successful international expansion. A PEO benefit that research findings have proven shows that privately-held businesses that use PEOs are approximately 50% less likely to fail (permanently cease operations) from one year to the next when compared to similar companies.”
To enter and conquer a new African market with minimal risks, proactive business owners and leaders opt for working with international Africa-focused PEO firms – like Workforce Africa. But before we go any further, it’s important to understand what an Africa PEO is, the roles played by Africa PEO partners and why you should consider their services while planning your international business expansion
What is Africa PEO?
A Professional Employer Organisation (PEO) acts as your onsite HR department. They hire employees, draft contracts, set up payroll, fulfil tax obligations, negotiate with vendors, manage legal matters and overcome all compliance challenges during your international business expansion. An Africa-focused International PEO firm like Workforce Africa enables you to concentrate on your core business while ensuring rapid, flexible and compliant business entity set-up and operations management.
When you engage the services of an International PEO, you can access quality talent and manage day-to-day operations in virtually any market without having to set up an entity in that international market.
Multinational organisations utilise global PEOs as a quick solution when they need to expand but do not have the internal resources, capacity, or time to manage all necessary business functions.
Benefits of a PEO — Why Should You Consider a PEO Partnership?
We can honestly say that an obvious benefit of partnering with a global PEO is that you don’t need to open your entity in multiple target markets. But you are legally established in those markets with the aid of your PEO solutions provider.
A PEO partnership helps you reduce your “go-to-market” time, business operating cost and eliminates the need to hire a legal team to liquidate your entity.
Consider your PEO partner as a way to mitigate global expansion business risks, specific market regulations and compliances demand that your internal HR team may not be familiar with.
Other PEO benefits include the positive impact on revenue. The 2019 NAPEO research study showed that the growth rate of business revenue was 13.5% for PEO clients, while non-PEO clients had a growth rate of 8.5%. Also, the administrative costs are around $450 lower per employee for businesses that use a PEO.
Before you get started with engaging a PEO partner for your organisation, you need to understand the key functions that the best PEO solutions partners play in an international business expansion strategy.
Let’s quickly explore the 5 critical functions of your PEO solutions partner below.
5 Critical Benefits of a PEO Solutions Partner
PEO Benefits #1 — Recruiting the Best Talent
To expand your business into new regions successfully, you need the right people. Unlike companies that are attempting to expand their global presence on their own, your PEO solutions partners have the legal capabilities and are able to attract, assess, hire and manage top talent on your behalf.
At Workforce Africa, we assist you in filling local talent shortages as you expand your business across Africa through our versatile and highly skilled talent pool. This reduces the risk of hiring wrongly and provides the best people you need to build and establish your company’s brand in the new market.
Your PEO partner should also provide essential advice on recruitment types you should be using in Africa (such as commission-based payments, shifts, full-time, remote workers etc.), optimal salary structure, ideal working hours and other employment conditions based on your proposed workload, industry average and the country’s realities.
It takes the right people to execute your business strategy successfully. When it comes to global expansion, there are a million and one things to think about and execute; eliminate your recruitment needs from that list by getting started with Workforce Africa today.
PEO Benefits #2 — Compliant Onboarding
Whether you are hiring local talent or sending in your expatriates, you’re relying on your Global PEO partners to onboard your employees as quickly as possible. A global PEO ensures your business operations and new hires remain fully compliant with local laws and regulations; this saves you the headache of figuring out internal controls on your own. Your PEO partners would also recommend training opportunities for your employees when there are changes in laws and policies that affect your business in that country and ultimately impact the continuity of your international business expansion.
PEO Benefits #3 — Optimising HR Tasks
Your International PEO partner is in charge of your employer’s responsibilities, such as taxes, HR support, payroll administration, work visas and company formations.
They also make sure workers are paid on time and in their local currency. Suppose you decide to terminate an employee’s contract; your PEO partner is to ensure that the correct severance and procedures are carried out as stipulated by the specific market and contract category.
When you partner with a world-class PEO service provider, such as Workforce Africa, you would be able to reduce your overall cost in the following ways:
I. By leveraging the PEO’s large workforce, you can provide premium health and insurance benefits to your employees at a lower cost.
II. A highly experienced PEO team would equip you with the right knowledge to take advantage of local tax breaks while establishing your business.
III. A client-centric PEO provider would ensure you adequately fulfil all your company’s responsibilities such as employee training, retirement contributions, timely payment of salaries, etc. This saves you the cost of non-compliance such as government fines, sanctions, cost of frequent recruitment, loss of brand’s reputation, etc.
PEO Benefits #4 — Ensuring Employee Retention
Retaining the best talent is pivotal in running a successful business, and it’s more challenging when you’re doing it from thousands of miles away. Your employee retention strategies need to be thoroughly thought out and communicated to enhance employee satisfaction.
Another purpose of PEO partnership is to help you ensure employees are engaged and effectively maximise their skills for the organisation’s growth. Notwithstanding the distance, time differences, language barriers or other factors. – It would make your international workforce feel like a team, receive clear guidance and understand the overall goals of the parent company.
When you work with Workforce Africa, we would consistently prioritise the retention of your high-performing teams because we understand that retaining top talent is always more cost-effective than hiring them.
Through our research, thorough benchmarking and employee retention initiatives, we substantially reduce the possibility of your best talent defecting to your competition for a better offer or a more conducive work environment.
PEO Benefits #5— Mitigates Risk
When entering a new market like Africa, certain unique factors may influence your risk profile, such as political factors, cultural factors, country-specific laws and regulations, etc. This makes international risk mitigation a crucial area during global expansion as your company is exposed to varying levels of risk.
If you don’t have local experts who are well acquainted with the best practices and next steps, you could easily get caught up in sanctions, fines and complications with local authorities over non-compliance.
By utilising the right PEO partner, you can start with more streamlined operations and lower your risk profile. Such is helpful for first-time international business expansion, entering multiple markets simultaneously or budget-sensitive projects.
You can also have one or two senior executives on the ground to achieve the same fundamental expansion structure and activities but at a lower price. Finally, if your company chooses to withdraw from the country, the market-exit process is easier, and the sunk cost incurred during the expansion project is considerably lower.
In Conclusion
Market expansion to a new market is critical to the growth of your organisation’s success. Engaging the right PEO partners provides you with an opportunity to break free from the operational responsibilities and stay focused on the strategic and core tasks to be completed. It also enables you to stay on top of the critical aspects of your expansion operations.
Workforce Africa provides localised, people and innovation support to help organisations expand quickly into new regions across Africa, leveraging collaborative problem solving and partnership to increase success odds and speed to market.
Expand into and across Africa with ease; schedule a consultation today, and let’s help you succeed.