The Middle East and North Africa (MENA) region is quickly becoming a land of opportunities for businesses looking for global expansion. With its diverse population, significant infrastructure investments, and business-friendly free zones, this untapped region is drawing foreign investors from around the world.
However, global brands looking to expand to the region have to navigate many barriers that make entry to the MENA region challenging. The most common challenges are regulatory complexities, unique business culture, and difficulty finding and managing a skilled local workforce. Partnering with PEOs (Professional Employer Organizations) in the MENA region can help overcome many challenges by co-employing staff and managing critical HR tasks, including comprehensive employee benefits administration.
PEOs empower businesses. Hiring PEO services in the MENA region is a form of HR outsourcing that helps reduce your company’s burden when planning global expansion. In this blog post, we’ll explore all the key PEO benefits for businesses, from onboarding and PEO payroll management to risk mitigation and enhanced employee benefits administration.
Are you unsure whether to hire global PEO services for cost-effective employee benefits and payroll services? Read this article to learn how to determine if you need a PEO partnership.
What is PEO (Professional Employer Organization)
A global PEO is a full-service HR outsourcing known as co-employment. When the company partners with a PEO in the MENA region, the PEO performs many HR-related tasks, including employee onboarding and administration, payroll and tax management, compliance management, risk mitigation, and many more, on behalf of the client company.
Global PEO services are particularly beneficial for small and medium-sized businesses (SMEs) looking for cost-effective HR management solutions in the MENA region. The region’s professional employer organization (PEO) market is witnessing major growth as an increasing number of businesses keep an eye on African and Middle Eastern countries.
Note: A PEO partnership differs from EOR (Employer of Record) and HR outsourcing. Find out the difference between a certified PEO and an EOR, as well as the difference between HR outsourcing and a PEO.
Let’s take a quick look at the pros and cons of PEOs for businesses:
Pros of using a PEO
- Attract, recruit, and manage top international talent
- Manage workers’ compensation program and other comprehensive benefits
- Ensure compliance with labor laws and other regional regulations
- Improve employee experience
- Protection from legal risks
- Save valuable time for primary business activities
- HR-related cost savings
Cons of using a PEO
- International PEO owns your payroll data
- Delayed communication and conflict resolution
As you see, the pros of PEOs outweigh the cons. Also, the cons of an international PEO can be addressed with proper planning, emphasis on effective communication, and written agreements between both parties.
Why work with a PEO: Benefits of PEO service
The following are the key benefits of using international PEO services:
Access to regional expertise
Investments in digital innovation have greatly expanded access to low-cost, high-quality education in Iran, Egypt, Qatar, Syria, Oman, Libya, Kuwait, and other countries that constitute the MENA region. So, with the help of PEOs, you can expect access to regional expertise in these markets.
PEOs possess strong recruitment expertise, enabling them to find and hire the best talent for specific job roles and responsibilities. With access to a diverse talent pool across various industries, they can easily recruit a remote workforce while ensuring your business remains compliant with local laws and regulations.
HR Compliance and risk management
When expanding your business to a new jurisdiction, there is a lot to comply with, from tax laws and safety regulations to workers’ compensation insurance and risk management. Fulfilling all these obligations can feel overwhelming, and failure to adhere to MENA business compliance leads to hefty fines and penalties. This is where PEOs play a vital role.
International compliance experts
PEOs are international compliance experts who keep up with changing laws and regulations. They maintain accurate payroll records while following tax laws. PEOs also help comply with labor laws in the MENA region by ensuring that minimum wage is met and overtime is paid. They also protect employees from discrimination at the workplace and wrongful termination.
PEOs also assist with worker’s compensation and other benefits depending on the industry and employees’ category —full-time, part-time, contractual, or seasonal.
Risk mitigation
The best international PEO partner has the expertise to conduct risk assessments to identify vulnerabilities in terms of workplace safety (such as biological threats, physical hazards, ergonomic hazards, etc.), as well as minimize legal penalties and lawsuits. Accordingly, they work with the client company to take proactive measures to mitigate any potential risks to the employer and employees.
Payroll data management and comprehensive employee benefits
According to an Ernst & Young survey, the average company makes 15 corrections to payroll in each pay period. Making these corrections consumes time and results in lost revenue. Companies can even face legal consequences due to payroll errors.
The following are several ways PEOs can help with the payroll process for the client company:
- Payroll processing that involves calculating employee salaries, bonuses, overtime, commissions, etc.
- Tax reporting: Deducting applicable taxes from employee paychecks, handling payroll tax reporting, and making payments to tax authorities.
- Managing deductions for high-quality employee benefits such as health insurance premiums and voluntary deductions.
- Ensuring payroll compliance with labor laws and regulations related to payroll.
Employee retention and turnover with PEO in HR management
The best international PEO companies can provide customized employee benefits packages that suit your company’s size and industry. They use employee management strategies and prioritize employee safety to foster a positive and safe work environment.
PEOs also ensure accurate payroll processing, resulting in timely salaries and improving employee experience and trust. In addition, PEOs offer access to training programs that enhance employees’ skills and show workers they have a bright future within the company.
This ultimately helps achieve a high employee retention rate, requiring less time and money on hiring and training and lowering turnover.
Cost savings with a PEO
Most PEOs offer two payment options:
- A percentage of overall payroll, between 3% and 10%.
- A flat fee per employee per year
So, you can choose an international PEO that fits your budget because there is less unpredictability. Most importantly, PEOs use their years of experience and industry knowledge to prevent compliance issues and avoid mistakes in paperwork, which can otherwise lead to mishandling of finances, serious fines, or court fees.
By offering efficient and satisfactory services to your employees, PEOs ensure a positive employee experience, leading to lower turnover rates and greater savings for your business. Additionally, PEOs free you up to focus on more critical business operations, helping your company grow and increase profitability.
Industries that benefit most from international PEO services in MENA
The MENA region is witnessing the growth of many vibrant and dynamic industries, from oil and gas to construction, tourism, fintech, healthcare, retail, and many more. So, businesses operating in these industries can benefit from PEO workforce solutions in the MENA region.
Oil and gas industry: This industry in the MENA region does not need an introduction. The oil and gas sector is the primary driving factor of the region’s economic growth. According to recent reports, the UAE produces an average of 3.2 million barrels of petroleum and liquids daily. So, it’s a massive industry in this area. If you also come from this industry and want to expand your business in MENA, you can collaborate with a trusted PEO to hire the best talent.
Technology: Major investments and initiatives from governments and private enterprises are fueling the growth of the tech sector in the region. With the help of your PEO partner, companies can hire professional remote workers skilled in cutting-edge technologies, including blockchain, artificial intelligence, the Internet of Things, machine learning, and many more.
Manufacturing and construction: The Middle East & Africa manufacturing and construction market is attracting the attention of foreign companies. Large construction and manufacturing companies can tap into endless opportunities by entering this market. They can collaborate with PEO to access a broader pool of skilled workers, knowledge, and resources quickly and hassle-free.
Renewable and non-renewable energy: This industry encompasses companies that produce energy, as well as those providing energy-related services and equipment. Time and money are crucial in this sector, along with the need for talented specialists. PEO companies can help identify and recruit these specialists, saving you significant time on workforce onboarding and allowing your business to focus on strengthening its core operations.
Retail and services: Marketing and selling goods and services require talented individuals with excellent communication skills. A PEO service for the retail and service industry can find the right people for this industry, from executive-level positions to salespersons.
Real estate: MENA’s residential and commercial real estate market has experienced robust activity, driven by rising prices. As a result, the industry is attracting numerous real estate companies eager to capitalize on market opportunities. To succeed, these companies require skilled and experienced professionals. A reliable PEO partner can help connect client companies with real estate experts who can represent their firms in the MENA region.
Other industries: Tourism, logistics and transportation, financial services, healthcare, pharmaceuticals, eCommerce, and many others.
Final thoughts: Why partner with a PEO?
We’ve aimed to provide you with a comprehensive understanding of the benefits PEOs offer businesses expanding into the Middle East and North Africa. However, the advantages of partnering with a PEO can vary depending on your business type, size, and industry. Ultimately, PEOs empower businesses by transforming HR outsourcing. Partnering with a PEO can be a game-changer, offering high-quality employee benefits, international employee compliance, and streamlined payroll services.
Make sure you choose a PEO partner that has a team of experienced professionals and consultants who are experts in all regions of MENA. Whether you are a startup, a medium-sized company, or even a large enterprise, contact us today to get a free quote.
