Learn the Difference Between HR outsourcing and PEO

For many business owners, it can be difficult to run a profitable and successful firm. This is true for businesses in any nation. Particularly when you are a new business in a highly competitive market such as Dubai, it can get very crucial. The best thing in these circumstances for businesses is to outsource several crucial tasks that require specific expertise. Tasks such as HR management can be easily outsourced, helping the organization save resources.

For instance, PEO services and HR outsourcing are some of the most highly recommended tasks for outsourcing, but it’s crucial to understand and know their differences.

In this blog, Prime Link IT Solutions, one of the leading and best recruitment agencies in Dubai, explains in detail the difference between PEO and HR outsourcing services in the UAE. We will give a quick explanation of each element’s concept, traits, and key distinctions from the others.

After thoroughly going through this blog, you will be able to select among these services to outsource your company’s tasks and enhance its operations.

Also, read our blog on enhancing IT services with outsourcing.

Let us first see what HR outsourcing is in Dubai

Performing HR duties and compliance can be difficult for many small and medium-sized businesses in the UAE. This is because these processes frequently contain numerous specifics and other important information, making them complicated and time-consuming.

As a result, many business owners choose to use PEO and HR outsourcing services to complete these tasks quickly. When it comes to HR, outsourcing refers to the services that certain organizations offer to other businesses to assist them in managing HR operations. Or, to put it another way, businesses can outsource some of their HR duties to a third party, such as one of the HR outsourcing companies in Dubai. This will enable the outsourcing agency to manage those operations effectively on behalf of that organization.

Let us now see Professional Employer Organization (PEO) Outsourcing in Dubai

To be able to outsource the right services, it is necessary to understand the differences between HR outsourcing and PEO services before requesting either from any of the HR or PEO outsourcing companies in UAE.

PEOs (Professional Employer Organization) service providers will also be able to manage some of the HR duties on your behalf, but not all. However, PEO companies such as Prime Link IT Solutions are renowned for providing an all-encompassing service that concentrates on managing numerous corporate processes. Therefore, if you run a small or medium-sized business, hiring our services can greatly enhance the management of your enterprise.

Also, read our blog on HR outsourcing vs. in-house: What is best for your organization? After reading the blog, you will be able to figure out what is best for your company.

Now let’s take a Look at the Differences between HR and PEO

PEO and HR outsourcing in the UAE are both services that assist you in doing HR-related tasks on your behalf, but they are not the same. In reality, there are four important differences between these services that you must consider before choosing one. Further down, we have explained in detail each of the four differences for your understanding.

1. HR Services

While each can provide as many HR services as the client needs, there are many key differences between PEOs and HRO providers. The “à la carte” business model is typically more extensively used by HRO companies. With this approach to HROs, the client has the freedom to select the services they desire to enhance their business. Thus, many businesses, without much research, simply go for HR outsourcing in Dubai.

On the other hand, PEOs typically provide higher-quality services and can sponsor the client’s workers’ compensation and health insurance. As a result, it is possible to locate more thorough plans that some clients are unable to obtain on their own or with HROs with the PEOs. However, PEOs offer a limited selection of plans when compared to HR outsourcing in Dubai.

2. Business Set-Up

A PEO functions as a co-employer; as a result, you will enter into an agreement with your PEO services provider to assume all business risks. In other words, you and your PEO will both be responsible in the event of, say, a tax audit. But things are different when you collaborate with an HRO company.

You will be in charge of handling your company’s information during an audit if you hire one of the HR outsourcing companies in UAE. But you will also need to request the necessary paperwork from your HRO provider.

HRO providers can give you advice on various issues, whereas PEO contracts concentrate on shared risk and employment obligations. They can offer guidance on organizational strategy and legal compliance.

Also, read our blog on how HR Outsourcing can help start-ups in Dubai succeed.

3. Benefits Management

The range of benefits that each of these services provides is another key difference between HR outsourcing and PEO outsourcing in the UAE. A PEO provider will only be able to supply a limited number of inflexible insurance policies.

Although these plans are renowned for being among the best, customization is not always an option. On the other side, HRO firms are renowned for providing a greater selection of plans. The significant premium savings that a PEO can offer you are not included in the diversity that HRO businesses offer.

4. Prices

Last but not least, one of the most important differences between HR outsourcing and PEO services is their associated expenses. If you have a tight budget, a PEO’s services tend to be more expensive than HR outsourcing services, which is a big difference for many start-ups.

However, both of these services may demand a flat monthly price per employee from the client organization. However, it entirely depends on the type of outsourcing agency you work with. At Info Links, for both PEO and HRO, we have a very customer-friendly pricing approach.

Speaking about other agencies in general, PEOs may, however, in some circumstances bill a percentage of the entire amount paid to employees by the client company each pay period. Using this strategy, the client company can also be required to pay administrative costs.

Concluding Lines

With Infolinks IT Solutions, you can avail HRO and PEO outsourcing services, along with many other services that help you scale and grow your business in Dubai. For more details, contact us.