What are the differences between a PEO and an HRO?

professional employer organization Dubai

There are different ways you can outsource your HR needs to ease this burden on your employees. For example, with a Professional Employer Organization in Dubai, you can outsource all such department activities in your business. On the other hand, with an HRO you can simply task these specialists with just a few HR tasks.

In this article, the differences between both types of service are described, as well as their meaning. Also, you can find the important points when hiring any of these HR management companies. Let us see:

  1. What are the definitions of PEO and HRO?
  2. What are the main differences between PEO services and HR outsourcing services?
  3. Which one fits your business?
  4. How can you correctly choose the best PEO services or HR outsourcing services?
  5. How can we help you with PEO services and HR outsourcing in the UAE?

1. What are the definitions of PEO and HRO?

professional employer organization Dubai

Below you can see the exact definitions of a Professional Employer Organization in the UAE (PEO) and HR Outsourcing in the UAE (HRO).

1.1 Professional Employer Organization in Dubai: Definition

A Professional Employer Organization in the United Arab Emirates is for those who want to outsource all the services of their HR department. That is, they can handle payroll management, employee onboarding, and set benefits, among others. Therefore, a company that hires a PEO service global does not need a Human Resources department.

Therefore, a PEO is better for those companies that want to cover their HR needs. In addition, they can provide employee benefits that a small business may not be able to offer. Likewise, Human Resources services will have a lower cost for each employee with PEO HR services.

Therefore, a Professional Employer Organization in Dubai is an excellent option forsmall and new businesses.

1.2 HR outsourcing in Dubai: Definition

Unlike a PEO, an HR outsourcing service offers options based on specific business needs. In this way, you only take partial control of certain activities related to the Human Resources department of your business. Consequently, many companies use this service for complicated tasks such as payroll management.

Therefore, an HR outsourcing company is an ideal solution for companies that are going through difficult situations. Also, if you are in the process of hiring staff or onboarding employees, or if you want to create development plans, etc.

You can hire HR outsourcing services if you only want to transfer some activities from your Human Resources department. Thus, this happens in cases where companies want to keep the data of their employees strictly confidential. Therefore, with the HRO, you can keep your information confidential and take advantage of the administrative benefits of outsourcing.

2. What are the main differences between PEO services and HR outsourcing services?

Both types of companies offer the same services and can guarantee you benefits in Human Resources. Also, both are capable of performing any task related to this department effectively and efficiently. However, there are fundamental differences between a Professional Employer Organization in Dubai and HRO services.

2.1 Employment models

A primary difference between HR outsourcing companies in Dubai and a PEO is the employment models they use. For example, while the latter bases its functions on co-employment, an HRO service does not. In this way, the PEO assumes the legal and financial responsibilities of each of its employees.

Therefore, it is in charge of benefits management, payroll processing, and other aspects, under its name. In this way, a PEO also handles all the data related to its employees.

On the other hand, HR outsourcing companies work similarly to other outsourced providers. That is, you offer your HR services but your company handles all the legal and financial responsibilities of your employees. An HR outsourcing service helps you with payroll processing, it will do so under your business name.

Also, your company retains full ownership of your employee information.

2.2 The flexibility of the service

In the case of a Professional Employer Organization in Dubai, they offer their service as a complete package. On the other hand, HROs offer the specific services that your business needs, adapting to what you require. Thus, with PEO services, you have to pay for a full package of services, even if you do not need some of them.

Hence, a flexible service is ideal when you just need to outsource nothing more than a few HR functions.

2.3 Human resources compliance

One notable difference is that PEOs deal directly with HR functions including compliance. An HR outsourcing company, however, is more of a consulting company to provide compliance information. Likewise, a PEO can also provide certain types of advice related to compliance in human resources.

3. Which one fits your business?

professional employer organization Dubai

Knowing the services offered by a Professional Employer Organization in Dubai and an HRO, you should know which one fits your company. Thus, you must consider certain factors such as business size, type of service, and the functions you need, among others.

3.1 Companies where a Professional Employer Organization is necessary

Commonly the companies that use the best PEO services are those that fall into the classification of small and medium. However, as companies begin to experience business growth, therefore will their HR needs. Therefore, this type of company is ideal if you do not want or cannot hire a complete team.

This way, you can take care of other vital matters, while the Professional Employer Organization in the UAE does the rest.Also, for a company that does not have the necessary knowledge about labor laws, you need a PEO. Because maintaining compliance with all labor laws and regulations, local and national, can be difficult.

Therefore, in order not to incur fines or penalties for non-compliance, your small or medium business should hire global PEO services. This way, you will get the compliance you need.

In the same way, these services are suitable for when a company wants to offer affordable medical services or retirement plans. This is because a Professional Employer Organization in Dubai works with and has access to various companies. Therefore, without this advantage, small businessesthey could not afford to offer these benefits to their in-house or remote workers.

This way, you will be able to offer attractive benefits to attract the best workforce and thus be able to improve your productivity. Likewise, you will be able to be more competitive in your commercial field, also making your business able to climb positions.

3.2 Companies where HR outsourcing companies in the UAE are needed

Unlike PEOs, HR outsourcing companies in Dubai work primarily with larger companies. Thus, they only perform specific Human Resources tasks that these companies subcontract to free up their HR department. However, this does not mean that they cannot work with a small or medium-sized company if they require their service.

Therefore, HR outsourcing in Dubai is useful when you already have a human resources department. In this case, you would contract these services only to handle specific aspects of the tasks corresponding to said department. An advantage of outsourcing, therefore, is that you can choose which services you want to outsource to these specialists.

Therefore, you can customize the tasks you want to hire according to your needs or convenience. Also, if you want to retain employee ownership and responsibility, contract the HR outsourcing in the UAE. Therefore, your business may be the sole legal employer of your employees, while another company handles your Human Resources.

4. How can you correctly choose the best PEO services or HR outsourcing services?

Whichever type of organization you choose to outsource your HR services to, you need to choose the best one. Therefore, be sure to consider the following aspects:

4.1 The activities you want to outsource to these organizations

First, if you want to hire, for example, a Professional Employer Organization in Abu Dhabi is to identify what activities you want to delegate. Thus, take a careful look at each of these tasks to determine what type of service you need. Therefore, if you only need to outsource a few activities, you can look for HR outsourcing companies in Dubai.

However, if you need to outsource all the work to human resources, you will need a Professional Employer Organization in Dubai. In this way, you will get a complete service such as human resources management, compliance, and payroll, among others.

4.2 The experience of the organizations with which you want to outsource HR

An essential element to having a good Professional Employer Organization in the United Arab Emirates or HRO is experience. Therefore, check things like years of HR management experience, turnover rates, etc. Also, look at the renewal rates of the organization and the referrals you can get from the clients of the organization.

4.3 The credentials that guarantee these companies

Apart from the above, you should check what are the credentials that certify the company as a provider of Human Resources services. For example, if you want to hire PEO HR services, verify that it is accredited by the corresponding authorities. Likewise, if what you want are HR outsourcing companies, youshould verify it, thus ensuring that you work with reliable companies.

Therefore, no matter which one you choose, you must verify that the organization you choose is qualified to perform these tasks. Remember, you are paying for a service and you must be sure that it will meet your needs and expectations.

4.4 The ability to manage HR tasks: Time and resources

If you are handling all the tasks of Human Resources, you will know what this implies in time and effort. As a result, you have to make sure that, for example, HR outsourcing in Dubai has what it takes to deliver. Of course, this is if you only outsource some HR services, like payroll or recruiting.

However, with a PEO, the work will be more extensive and the company must have what it takes to complete each activity.

4.5 The ability to enforce labor laws

If you can comply with all labor laws and regulations, you simply need an HRO. Well, in this case, you take care of all the compliance, with the organization doing consulting work. On the other hand, if you do not want to deal with constant law changes, you need a Professional Employer Organization in the UAE.

In the latter case, the risk of non-compliance is divided between your business and the PEO you hire. Furthermore, a PEO provides information regarding compliance with labor and tax laws in the country. For example, it will notify what the requirements are for different operations, providing comprehensive guidance regarding legal processes.

Also, you may have to take the necessary steps to achieve compliance with all requirements of the law.

5. How can we help you with PEO services and HR outsourcing in the UAE?

With a Professional Employer Organization in the United Arab Emirates, you will get a comprehensive service. On the other hand, with human resources outsourcing services, you can allocate only part of the work to these professionals. Either way, you need to know which of them you require to perform the HR tasks of your business.

If you want to have a company with extensive experience and a multitude of satisfied customers, we are your best choice. Likewise, not only in this aspect can you count on us but also if you need an employer of record. Similarly, we can provide advice on hiring remote employees if you want to expand your business internationally.

Still unsure about the differences between a Professional Employer Organization in Dubai and an HRO? If it like this, we put at your disposal our email [email protected], to attend to your concerns. Also, to contact us in a more direct and personal way, you can make a call to +971 43 316 688, where you will be gladly assisted.

Are you looking for a job with a major company in the Middle East? On thetalentpoint.com you will find many job offers from various companies in the region. Likewise, you can send your CV to the email associated with said page [email protected], you can take advantage of this opportunity.

Leave a Reply

Your email address will not be published. Required fields are marked *

You must be logged in Log in »