A Global Employment Organization (GEO) is an internal legal entity that functions as an in-house service provider for an organization. Its mission is to manage a cross-border workforce in a tax-efficient and administratively efficient manner, while also offering benefits and a rewarding work environment for employees. Because of the increase in cross-border employees in the market, as well as the risks that come with it, GEOs have become a popular topic among global organizations recently.
GEOs are designed to facilitate a specific type of global employment. They have been used by the Fortune 500 for more than 50 years and are well-known among assignees or expats.
There are four scenarios where GEOs traditionally manage employee or worker populations:
- Talent strategy – when an organization typically hires the best talent worldwide regardless of location
- Remote working – when an organization leverages remote working, considering both the company's work location flexibility and the employees' demand to work anywhere they choose
- M&A – workers who arise as a result of mergers and acquisitions or sales activities (When a cross-border transaction leaves employees stranded in an area where the company does not have a presence, a GEO can be used to employ these one-time, third-country nationals.)
- Cross-border employees – workers who are part of a company's global mobility program, as well as employees who work for a company that operates abroad
Some organizations adopt an alternative approach to managing a cross-border workforce. If they want to engage remote workers but don’t have an internal solution, they'll either hire independent contractors or use a Professional Employer Organization (PEO). A PEO is a third-party company that hires identified employees, provides local benefits, delivers pay, and oversees employer compliance. It is seen as a viable option for a company’s specified, short-term needs.