US Employers now have a global pool of talent to draw from, and with remote work at an all-time high —  remote employees account for 53% of the US workforce — it’s no surprise that these companies have been looking to streamline the remote hiring process.

A PEO (Professional Employer Organization) or an EOR (Employer of Record) allows companies to take advantage of remote hiring opportunities without necessarily establishing an independent legal entity in the country they’re looking to hire. Working with third-party employment service providers allows businesses to establish or maintain an international presence and comprehensive services package to their clients much more easily.

This article dives into which organizations can partner with a Canadian PEO or EOR and how they can best leverage these services to benefit their clients. Let’s get started.

What is a PEO vs an EOR?

For small and mid-size US businesses looking to go international, working with a third-party EOR or PEO can provide a wealth of benefits. They help ensure compliance with employment laws in any country your business is operating in and can take care of many technical aspects of employment such as HR, payroll, tax requirements, and employee benefits. They offer an easier way for companies to hire remote employees in another country and take advantage of a global talent pool.

Even though the terms are often used interchangeably, there are some key distinctions between a PEO and an EOR that are important to understand to determine which one may be the right option for your company. Both can take care of a number of employment services, as mentioned above, but the key difference between the two lies in who is legally responsible. 

An EOR becomes the firm’s local employer from a legal liability standpoint, which is ideal for companies that do not have a presence — and thus a legal entity — in the country they’re trying to hire in. In this instance, an EOR will be responsible for hiring and terminating employees, thus acting as the legal employer in that country, doing so effectively on behalf of the US tech employer client.

A PEO, on the other hand, works with companies that already have a legal entity established in the country they want to hire in, which means the liability of the employee remains with the US company, but the PEO handles the HR, taxes, and other administrative functions that the US company may not want to hire full-time for.

Working with either a PEO or an EOR can make it simple to build an international presence without the associated stress, time, or overhead. That’s why providers that service tech companies, whether immigration law firms, relocation management companies, investors or more, can partner with PEOs or EORs to provide this opportunity to expand internationally.

Here’s how.

Who can partner with a Canadian PEO or EOR to better support their clients?

Companies and organizations that service US-based tech companies can work with Canadian PEOs and EORs to offer even more comprehensive services, specifically in the event those tech clients are looking to hire tech talent in Canada, whether because they ran into H-1B visa or other US immigration issues and want to take advantage of Canada’s tech-friendly immigration laws, or because they simply want to hire a talented Canadian tech worker.

By using a third-party employment solution, businesses can provide value-added services that can boost productivity and provide a better experience for their clients. 

Here are some of the businesses that can directly benefit from working with a PEO or an EOR and how.

US Immigration law firms

Immigration law firms whose clients would like to have employees work remotely in Canada but don’t have a legal entity there can benefit from having access to an EOR.

Their clients can leverage the EOR to help them establish and maintain their business in Canada while the legal, administrative and other aspects of hiring and employing that person in Canada rests on the shoulders of the EOR.

So, for example, if a  US-based tech company wants to hire a tech worker who has been working with them on F-1 status but didn’t get an H-1B, they can still employ that worker, albeit remotely, by hiring them remotely in Canada using an EOR.

Relocation Management Companies (RMCs) 

At a high level, RMCs work with large corporate clients to manage their global mobility programs by helping them move and support employees to offices around the world.

Since PEOs and EORs enable companies to hire current or new staff in a country where they don’t have an established legal presence, and PEOs help companies manage day-to-day operations in countries where companies may have a small office, RMCs can help corporate clients move individuals to, say, Canada, and then partner with a PEO or EOR to support the tax, HR, immigration and other practical employment matters in Canada.

By partnering together, RMCs and EORs can streamline international personnel management for organizations of all sizes. 

Venture capitalist and other investment firms 

When VC or other investment firms have portfolio companies that need to expand their tech teams but can’t do so in the US due to, for example, immigration laws or high salaries, expansion into Canada to take advantage of the country’s favorable immigration policies and growing pool of tech talent can be a solution.

By partnering with an EOR for a portfolio company that doesn’t have a Canadian office or a PEO for a portfolio company that has a small presence but doesn’t yet have the scale to hire its own HR, legal, tax, and other administrative staff, VCs can facilitate expansion into Canada to help these portfolio companies grow – a win-win proposition.

So, for example, a growing US company that just raised a series B funding round that wants to hire an additional tech team in a more predictable and affordable country than the US, could then go to their VC for advice and the VC would connect them with an EOR to help them hire remotely in Canada without the pain of opening up a legal entity.

Economic development organizations 

These are organizations that are looking to expand their local economies by enticing companies to move into or expand existing work in those local communities. One way to do this is to leverage local EORs that themselves hire remotely on behalf of companies in other regions.

By working together, economic development organizations can perhaps provide favorable or enticing reasons for the EOR’s clients to choose their locale, thereby helping both the local community with added economic activity as well as the EOR client.

So, for example, if the Canadian province of Alberta wanted more US-based oil and gas companies to build research facilities in the area, they can leverage an EOR to help fine US-based oil-and-gas companies to hire staff locally in Alberta without needing a local office, and benefit from the talent, and opportunities, in Alberta without the major initial investment of a legal entity in the province.

Syndesus provides both EOR and PEO services in Canada

Syndesus helps companies with both PEO and EOR services, including immigration, benefits, HR, and payroll. Your administrative processes are taken care of while you focus on expanding your workforce and moving your company forward. 

We can help companies that don’t have an office in Canada leverage Canada’s tech talent and favorable immigration laws whether those companies are small US startups or large corporations. Or, if you already have a Canadian entity, Syndesus can manage the technical aspects of employment and help grow and maintain your team.  

We also help companies such as immigration law firms, economic development organizations, RMCs and others, support their clients with our turnkey solutions.

Reach out to us to learn more about how we can help you.`