Professional Employer Organisation, also known as PEO, is a term quickly gaining traction globally. Especially because we are currently living in the climate of a pandemic, this has forced many businesses to think about engaging PEO services to facilitate their expansion in the international markets. 

If you are here, chances are you are deliberating on whether or not to work with a PEO. Here are 4 reasons why it might be time for you and your business to take the leap of faith.

1. PEO helps you navigate your business

With COVID-19 throwing many business plans off tangent, we know that expanding abroad might be one of the tougher goals to achieve now. Growing a business overseas is inherently difficult and without the right investment of effort, it is easy to fail because research and experience in the particular market is the key to success for overseas expansion.

This is how a PEO can be your biggest asset. A PEO that has experience in the specific market you want to expand to, can help navigate your business and provide accurate advice with regards to legal issues and more. If you are uncertain of the business culture, HR and employment functions in said country, it is encouraged to work with a PEO that can guide your business and ensure that your business is compliant on foreign grounds.

2. PEO lets you focus on your business strategy

Hiring employees, addressing compensation, benefits and compliance issues are additional functions that can be labour-intensive and easily neglected if the right resources are not invested to look after them. But by working with a PEO, you can free yourself off taking care of these and focus on your strategic business decisions. Essentially, a PEO will act as a support function for your company to address your HR needs. Furthermore, you are leaving your people in the hands of specialised experts who can professionally manage the HR infrastructure. No more ambiguity, no more hassle.

3. PEO helps you gain a competitive advantage

This thus enhances your business’s competitive position as well, not just because you can now focus on your strategic goals. Since a PEO helps you in recruitment and employment, you will be in good hands in terms of attracting the right talents that fit your company. Not only that, a PEO can help you save time and cost since PEOs already have direct access to an extensive database of qualified candidates. This can once again help you realign and narrow your focus to just making the final hiring decision.

4. PEO protects your business

The IRS states that an estimated 40% of small businesses pay an average fine of $845 annually due to avoidable payroll and tax mistakes. All these errors and mistakes can add up to a hefty cost. Penalties aside, payroll mistakes easily kill the morale of employees, which can impact the workforce productivity if left poorly managed. In this aspect of compliance, it can be tricky for businesses that want to expand to markets that operate under different policies and regulations. While it is not impossible to navigate through it yourself, a PEO can take away the stress and provide certainty with regards to protecting your business from avoidable mistakes like such.

Ultimately, working with a PEO can bring obvious advantages to your business. If you are currently looking to expand into the Asian market, we are offering PEO services for specific markets in China, Hong Kong and Singapore. Even if you have not made a final decision, feel free to speak with our professional consultants about any enquiries. You can also click here to be redirected to our PEO Services page to learn more about what we offer.

This article is written with reference from:

The European Business Review. (2020, September 28). What does a PEO do and how can it benefit your company? Retrieved June 21, 2021, from The European Business Review website: https://www.europeanbusinessreview.com/what-does-a-peo-do-and-how-can-it-benefit-your-company/

On 2 February 2021, Hong Kong Secretary for Labour and Welfare, Law Chi-kwong, announced that the minimum wage will be frozen at HK$37.50 per hour from May 2021 up till 2023. Since the Minimum Wage Ordinance was enacted in 2011, this is the first time that the minimum wage is frozen. 

This freeze is in response to Hong Kong’s current economic recession and high unemployment rates. On top of that, the Hong Kong government believes that by freezing the minimum wage, it can help to minimise the loss of low paying jobs which threatens to further depress the unemployment rate. 

However, concerns have been raised by the HKFTU’s Rights and Benefits Committee with low-income workers in mind. In fact, the members of the committee have been lobbying for subsidies for the low-income workers to mitigate the impact of the frozen minimum wage on their quality of life. Essentially, they are fighting for the Government to offer subsidies so as to make up for the grassroots’ loss of purchasing power. 

This was however rejected as the chairwoman of the Minimum Wage Commission argued that the previous 8.7% wage increase from 2019 has outpaced inflation thus far and hence, this freeze in minimum wage will not adversely affect the purchasing power of the grassroots. Moreover, Secretary Law said that there are other government welfare policies in place such as the Comprehensive Social Security Assistance which can help this group of people. 

Ultimately, this move in freezing the minimum wage is to strike a balance between forestalling excessively low wages as well as reducing the cuts in low paying jobs. 
If you want to know more HR insights about expanding your business in Hong Kong, feel free to connect with us. Or click here to be redirected to more information about employment regulations in Hong Kong. 

This article is written with reference from:

Chau, C. (2021, May 25). Hong Kong freezes minimum wage amid pandemic woes | HRM Asia. Retrieved June 21, 2021, from HRM Asia website: https://hrmasia.com/hong-kong-freezes-minimum-wage-amid-pandemic-woes/

Cheng, S. (2021, February 4). Freezing Hong Kong minimum wage at HK$37.5 an hour is an “insult” to cleaners at Covid-19 frontlines, labour group says | Hong Kong Free Press HKFP. Retrieved June 21, 2021, from Hong Kong Free Press HKFP website: https://hongkongfp.com/2021/02/04/freezing-hong-kong-minimum-wage-at-hk37-5-an-hour-is-an-insult-to-cleaners-covid-19-frontlines-labour-group-says/

Rthk News. (2021, February 2). Govt freezes minimum wage for the first time – RTHK. Retrieved June 21, 2021, from Rthk.hk website: https://news.rthk.hk/rthk/en/component/k2/1573669-20210202.htm

With the increasing pressures to cut costs, outsourcing your HR can be an arrangement to help handle your HR functions for your business.

Typically, businesses that face the following challenges are encouraged to outsource their HR:

• Liability exposures and previous penalties due to HR lawsuits
• Lack of in-house HR staff to manage HR infrastructure
• Over focus of HR admin tasks over other business needs
• Having many variations of compensation rates across a wide range of employees
• Cost savings and budget constraints 

Recognising your businesses needs vs constraints is important in deciding whether you should outsource your HR. The next step is to decide what type of HR outsourcing your business requires. In summary, there are 2 main options:

1. Professional Employer Organisation (PEO) 
2. Human Resource Outsourcing (HRO)

The main difference between the 2 options is whether or not it utilises the co-employment model. For PEO, a co-employment model is used, which means to say that your employees will appear on the books of your PEO partner for legal and tax functions. Essentially, your PEO partner manages all employment matters with regards to the employee. For HRO, a co-employment model is not used, so your employees have a direct employment relationship with you and they remain in your company’s books. However, your HRO partner manages all the HR tasks for you. Depending on what you need help in, HRO offers flexibility by handling a certain HR task for you, like payroll processing.

If you think that your business will benefit from outsourcing your HR, click here to be redirected to our HR Outsourcing page to learn more about what services we offer and how to connect with us.

This article is written with referene from:

Freedman, M. (2020, September 23). Should You Outsource HR? Retrieved June 21, 2021, from Business News Daily website: https://www.businessnewsdaily.com/15827-outsourcing-your-hr.html

Currently, there is no minimum wage in Singapore. In its place, there is a Progressive Wage Model (PWM), which is a scheme developed to guarantee career and wage progression for workers limited to sectors like security, cleaning, and landscape. Essentially, workers in these specific sectors will be guaranteed progression based on their productivity and skills, which can be enhanced through government-subsidised courses. 

Therefore, the Progressive Wage Model aims to strike a balance for businesses to pay for labour for its worth, while providing opportunities for Singaporean citizens to secure basic capabilities and upskill when possible. The constant issue however, is that the PWM covers too few industries. 

Although there are no minimum wages for the rest of the sectors, there are changes enacted by the Singapore Government to support local employment during these times of crisis. Firstly, there are key changes to foreign work pass policies. Here’s a summary of the changes:

• From September 2020, the minimum monthly salary for Employment Pass holders was raised from $3900 to $4500.
• For EP holders in the financial sector, they are subjected to a higher minimum monthly salary of $5000.
• For mid-skilled foreign workers on S passes, the qualifying salary is raised from $2400 to $2500.
• These changes have been made for new applicants after September 2020 and will apply to renewal applicants beginning May 2021. 

On top of these changes to foreign work pass policies, there is also the Job Growth Incentive Scheme (JGI) to go hand in hand with the Job Support Scheme in helping expand local employment. Essentially, the JGI aims to support wages for 12 months from September 2020 to 2021, split into 2 phases. Phase 1 begins from September 2020 to February 2021, and phase 2 starts from March 2021 to September 2021. The eligibility criteria however, is that JGI only applies to companies that reflect an increase in overall local workforce size earning ≥$1,400/month. If eligible, the support covers:

• 25% of the first $5000 of gross monthly salary paid to new local hires. (50% for mature local hires aged ≥40 years or persons with disabilities or ex-offenders)
• This supportable gross monthly wage will increase to the first $6000 of gross monthly wages paid from March 2021, which is the 2nd phase of the JGI.
• For mature local hires/persons with disabilities/ex-offenders, government support can be extended beyond the JGI for another 6 months

This article is written with reference from:

IRAS. (2021). IRAS | Jobs Growth Incentive (JGI). Retrieved June 21, 2021, from Iras.gov.sg website: https://www.iras.gov.sg/irashome/Schemes/Businesses/Jobs-Growth-Incentive–JGI-/

With a flurry of changes the pandemic has caused, businesses have been forced to set up remote work arrangements without well-planned preparations. A year into living in the pandemic in Singapore, most businesses have adapted to hybrid working arrangements as the restrictions to go back to office ease up.

There is a general consensus across the population that telecommuting will be the way of the world sooner than we think, as job portals continue to churn out long lists of new jobs that are now designed for remote work. However, the lack of preparation and planning before remote work had to be effectuated has proven to be a struggle for many Singaporeans.

In a survey conducted by the National University Health System’s Mind Science Centre, 61% out of 1,407 respondents reported feeling stressed at home. This opens up to reasons such as tension from living round the clock with family or not having an ideal working environment at home.

Not only within employees’ personal predicament, but tensions between employers and employees also exist. Telecommuting is largely linked to the idea of “taking time off”, and some employers can face the struggle of trusting employees to stay motivated and efficient. But given the current climate of the pandemic, employers have to learn to manage their perceptions and also exercise compassion towards employees who have a poorer work environment at home. 

In this economic recession, flexible work from home arrangements can bring about a lot of cost-saving benefits for employers. Although not all jobs can be done from home, this pandemic has reshaped many attitudes towards telecommuting, and it is expected that there will be a gradual migration towards hybrid work in the future.

Even then, the traditional way of working in the office will never be completely eroded, since there are still a significant number of employees who prefer going to the office. Direct interactions, greater productivity and stronger focus are some reasons for their preference. After all, technology will never fully replace the human touch.

As Singapore moves towards a COVID19 free zone, employers can take this time to rethink their business plans after the pandemic. With more employees embracing the idea of telecommuting, this is a new reality that the population will have to adapt to sooner or later. 

If you are looking to expand your business in Singapore, feel free to connect with us for professional insights and advice regarding the market. Click here to be redirected to our services page to learn more.

This article is written with reference from:

Sin, Y. (2021, January 1). Telecommuting amid Covid-19 pandemic paves way for new workplace culture. Retrieved June 21, 2021, from The Straits Times website: https://www.straitstimes.com/singapore/work-from-home-arrangements-could-pave-way-for-new-workplace-standards

Tang See Kit. (2020, May 25). Goodbye office: Is the future of work in our homes? Retrieved June 21, 2021, from CNA website: https://www.channelnewsasia.com/news/business/goodbye-office-work-from-home-future-covid-19-12758558

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