Singapore, the southeastern city-state, is undoubtedly the best place in the world to do business today. The island nation reigns supreme with its rapid economic growth and has become the most preferred location for business expansion. Strategic location, ease of starting a business, strong legal framework and personal safety, business-friendly ecosystem, easy and affordable access to funding, attractive private and corporate tax structure, and comprehensive intellectual property protection are some of the reasons for the country’s success in attracting sizable foreign investments and business entrepreneurs.
Despite having so many positives, expanding your business in Singapore may not be easy. Singapore Employment Act outlines numerous rules and regulations which are too elaborate and complex, making their compliance a herculean task for first-time investors. Some legislations in the Employment Act are confusing and can cause practical problems for expanding businesses.
New employers are often surprised to know there are significant challenges to hiring foreign talent. The Singapore Work Visa for hiring foreigners is heavily regulated by the Ministry of Manpower (MOM,) and obtaining a work pass can be tricky at times. There are several hurdles companies face when getting a work visa approved. Besides, you need to be correct and very careful in all government-related paperwork, as Singapore imposes harsher penalties for noncompliance relative to other countries.
Highly regulated complex work passes, and numerous employment regulations make manpower sourcing a difficult affair in Singapore. This is where an experienced and expert Professional Employer Organization (PEO) comes in for your rescue.
What is PEO, and How does PEO Work?
PEO stands for Professional Employer Organization which helps a client organization manage employee hiring, ensure compliance with payrolls, handle day-to-day HR tasks and administer employee benefits. A PEO is also known as a co-employer and typically has a team of professionals specializing in HR, legal, taxation, customer service, and accounting.
A PEO can also assist businesses in their global expansion plans without needing different company setups in different countries. It can also take care of insurance and health benefits for your remote employees and contractors.
A PEO hires employees for the client organizations on its payroll and once hired, the employee becomes an ‘employer on record’ for the PEO company. Performance review metrics, including KPIs and KRAs, are provided by the client organizations however the employees work as per the HR guidelines of the PEO, who takes care of the employees’ payroll and regulatory compliance while freeing the client organizations to focus on their core business needs.
How can a Singapore PEO help you expand your business?
PEOs have come a long way over the last three decades, and an increasing number of employers today are relying upon PEO Services in Singapore. This increased reliance on PEO services is happening because companies are seeking greater regulatory compliance and risk mitigation due to reduced complexity due to the absence of any legal entity in a country.
Every overseas market poses new challenges for business expansion, and Singapore is no exception. The Singapore Employment Act is complex, and any non-compliance with this act may create huge risks.
A Singapore PEO has already established itself in this market and by being your co-employer, can shoulder all your regulatory needs in the expansion process. While the PEO takes care of your overseas day-to-day HR and compliance needs, you can devote more time to focus on tactics and strategies to grow your business.
There are always financial risks involved when expanding overseas, whether Singapore or any other country. Irrespective of the nature of the expansion you undertake, there would be a significant investment you need to commit. At this stage, it may not be prudent for you to shift your focus from your core business function and concentrate somewhere else and establishing a legal entity in a country
As you expand, you need a human capital and once you outsource a PEO, you can quickly reach out to available resources as PEOs are experts and are normally part of a well-established vast PEO network with numerous contacts for hiring overseas without any need for setting up legal entities.
What are the Benefits of Outsourcing a PEO in Singapore?
Outsourcing a PEO services firm can offer you multiple benefits in Singapore, as enumerated below.
A PEO services firm removes the entire administrative and payroll responsibilities from your shoulder. It can save you substantial time and effort on paycheck preparation, making payments, generating pay slips, and tax reporting.
- A PEO working for you in the foreign market gives you the assurance that all HR issues will be handled properly including onboarding & exit, employee relations, paid family leave, managing other leaves of absence, overtime management, and termination.
- PEOs, due to their expertise and experience, can bring down your liability significantly in terms of HR compliance issues, including workers’ compensation, liaising with local agencies, arranging liability insurance, etc.
- PEOs are expert negotiators and provide cost-effective solutions for your foreign employees in terms of employee benefits and reduce your employee cost significantly.
- A PEO can also facilitate handling life and personal accident insurance, medical insurance including vision and dental care plans, disability insurance, etc.
Is there any Alternative to PEO in Singapore?
If you are not interested in forming a partnership with a PEO, then EOR Services in Singapore can be the suitable alternative outsourcing arrangement. Partnering with an Employer of Record (EOR) services firm is particularly useful for companies that are not ready to outsource their HR requirements completely or don’t want to enter into a collaborative arrangement.
With the outsourcing of EOR services, a company can legally employ workers for the country where the EOR is located and as the legal employer of the company.
Why Choose IMC as your PEO Partner in Singapore?
IMC, with a team of experienced and qualified professionals, can provide you with unique HR solutions for your business expansion and employment navigation in Singapore. We can help you function seamlessly even amidst a pandemic, without the costs and risks associated with a legal entity.
We have in-depth knowledge and a comprehensive understanding of the Singapore Employment Act and can source the right work passes for your foreign employees.
Our Singapore PEO services team assures you of full compliance with local laws and provides you with a range of recruitment services.