Indonesia PEO & Employer of Record
Employ Talent in Indonesia: How a PEO Solution Can Help Your Business Thrive?
By definition, a professional employer organization (PEO) is a business entity that provides comprehensive HR solutions for businesses through a co-employment relationship. PEOs manage payroll, benefits and other HR responsibilities for the employees of a client company.
Recently, due to the economic impacts of the COVID-19 pandemic, PEOs are seeing their popularity increase even further. Because a PEO pools many employers together, they can achieve the economies of scale that individual companies may not be able to achieve on their own. From a benefit standpoint, this means that workers at a smaller company will have access to government health coverage (BPJS) on par with those offered by much larger companies. The use of this model can help a business grow by providing greater efficiencies and reducing its liabilities.
The relationship between the PEO and their client is one of “co-employer”, which means that the PEO contractually shares certain specific employer responsibilities with the client. In such a relationship, the PEO handles the “administrative” duties and the company manages the “worksite” duties.
Specifically, the following are the process coverage in a PEO arrangement:
1. Select employees
Pick candidates of your own choosing, or make use of our talent acquisition service.
From signing employment contracts, to first payroll, our team will set you up for success.
Get 24/7 assistance with employment compliance, terminations, severance and more.
Our team have access to wide range of benefits, making your company an attractive prospect.
6. HR advisory
Gain advice on complex labor law and payroll issues with our qualified advisory team.
Indonesia PEO & Employer of Record (EOR)
Type of Employ and Empower Plan
Employer of Record
Hire employees in Indonesia where you don’t have entities
Manage and pay Indonesia contractors
Payroll + Insurance
Payroll and insurance benefits (BPJS) and need to have entities.
Role in a PEO Arrangement
Role of the PEO:
- Pay employee wages and remit taxes timely to the appropriate local authorities
- Guide and assist the client with any regulatory and compliance issues
- Provide employees of the client with medical coverage, BPJS Kesehatan, BPJS Ketenagakerjaan and a full range of other employee benefits
- Perform a variety of human resource administration services including recruiting support, advice on termination procedures, proper disciplinary procedures, etc.
- Assist in employee training and development
Role of the Client:
- Manage and control the daily responsibilities of its employee workforce
- Maintain a safe work environment
- Track and report each employee’s actual work hours
- Transmit funds to the PEO for payroll processing
What Benefits Does a PEO Provide?
One of the chief benefits of a PEO is providing clients the ability to delegate nonrevenue generating activities to a trusted third party. By handling many time-consuming administrative chores, such as recruitment, employee onboarding, training, handbook development and maintenance, creation and enforcement of HR policies and more, a PEO can reduce the administrative workload and free up resources to be focused on tasks that improve company revenue, growth, and productivity.
Since most successful PEOs are well established and utilize best practices and cutting edge technology, clients can often save money by using PEOs instead of their own in-house staff for HR and benefit administration.
Because PEOs have experts in the field of HR and benefit administration, their clients are better protected against risk. Through a utilization of their services, companies are less likely to make expensive administrative mistakes, avoiding the associated infractions and potentially costly fines. Additionally, because the PEO is an employer of record, it takes on employer-related legal liability in these areas.
Especially during a crisis like the one we’ve experienced over the past year, the last thing most business owners need to be worried about is whether their business is compliant with the most recent local manpower laws.
Many factors make financial forecasting a complex process, especially when international business is involved. Frequently, new business expansion struggle to project their monthly human resources costs due to factors like currency exchanges and international banking practices.
Our PEO has extensive experience with these factors, allowing it to help its partner companies develop accurate projected budgets.
Small and mid-size businesses can access resources they might not otherwise have access to or be able to afford, like employee training
programs, onboarding programs and recruiting services. Additionally, the PEO has a variety of skilled and experienced experts trained in areas that many smaller businesses may not be able to hire on their own due to budgetary limitations.
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