Benefits Of PEO For Small and Mid-Scale Businesses in UAE

Author: TASC Outsourcing
Dec 05, 2023

Handling human resources can often be overwhelming for SMEs in Dubai. After all, it’s a whole new market.

Fortunately, working with a PEO (Professional Employer Organization) can offer the much-needed help that a business needs to set up its operations in the UAE.

Why? Because these specialized agencies lend a helping hand when there are HR challenges within the organization.

Some businesses also seek support with visa processing for their employees. Managing all the paperwork and sponsorship requirements can be difficult, which is why seeking assistance from experts from a PEO for small business makes this process significantly smoother and less stressful.

In fact, many businesses are turning to PEOs for assistance with various aspects of their operations, and this arrangement is often called "co-employment." It's a practical solution to navigate the complexities of HR management.

If you’re wondering how, it all works, we’ll look at it today.

What is a PEO?

A PEO (Professional Employer Organization) is essentially a strategic partner in HR management. In simpler terms, it is a third-party entity that will take on the role of a co-employer. It means they’ll be handling all the HR responsibilities for your staff on your behalf.

Here are some of the critical characteristics of a PEO -

  • Expert HR Staff - PEOs have experienced professionals on their payroll who are proficient in various aspects of HR.

  • Cost-Effective Benefits - One of the primary reasons many businesses prefer PEOs is for their cost-saving advantage. They can offer comprehensive employee benefits, which comes at a fraction of the cost compared to managing them in-house.

  • Compliance Management – It’s not an easy job to navigate HR compliance, especially in the UAE. Because PEOs have specialized knowledge, businesses can use it to their advantage to avoid penalties and stay on top of their game in terms of compliance.

How Does a PEO Work?

It’s not uncommon for SMEs to not know how to go about a partnership with a PEO. For your convenience, here’s a quick look at how the process is meant to unfold –

  • Your company will initiate a partnership with a PEO.
  • By doing so, your employees will become part of the PEO's payroll.
  • Your employees will continue to receive their tasks and responsibilities from your company; the PEO will be handling the payroll and benefits administration.

It’s essential to understand these fundamentals because it will help you make the most out of your partnership with one of the best PEO companies for small business in Dubai.

What a PEO Can't Do?

While a PEO may take over several aspects of your business, there are certain things that a PEO cannot do. Let’s take a quick look at them –

  • They will not take control of your business.
  • They will not make decisions about hiring or firing employees.
  • They will not interfere with operational decisions.

Thus, it means that you will still have control of your company while, at the same time, benefiting from specialized HR support.

What are the Benefits of Partnering with a PEO?

Now that we’re done with the fundamentals, let’s look closely at some of the tangible benefits of collaborating with a professional PEO.

  • HR Benefits – If you want your business to succeed, you need a satisfied workforce. A PEO can help keep your staff happy by providing cost-effective employee benefits, including medical and dental coverage, life and disability insurance, and healthcare insurance. Ultimately, it means that your employees will be well taken care of.

  • Payroll Management – When you partner with a PEO, you will not only be able to streamline your payroll processing but also expenses associated with accounting. It frees up time that can be used to focus on strategic business decisions.

  • Lawsuit Protection - The employment regulations in the UAE are quite strict and can pose challenges for businesses. As a SME, you may need to be aware of these laws. Fortunately, a reputable PEO can handle the negotiations on your behalf to help prevent costly legal disputes.

  • Retirement Plans - A PEO can offer attractive retirement plans to your employees on your behalf. Doing so will help you retain top talent, which will drive your business towards success.

  • Employee Compensation & Salaries - Most PEOs are known to handle payroll. Therefore, they will be responsible for simplifying salary distribution and ensuring timely payments to your employees.

  • Employment Regulations - Navigating employment regulations in a new country can be challenging for any SME. Fortunately, PEOs will be able to help businesses adhere to local laws, ensuring that you get to avoid penalties and fines.

  • Recruitment & Hiring - PEOs are known to streamline the recruitment process, from applicant screening to onboarding. Doing so will save you time and effort, especially when you’re trying to grow in a new market.

How to Select the Right PEO?

Selecting the right Professional Employer Organization (PEO) for your business is a pivotal decision that demands careful consideration. In order to ensure you make an informed choice, you must follow these two essential steps 

Assess Your Needs

You need to start by conducting a thorough assessment of your business requirements. Go ahead and create a comprehensive list of tasks that require assistance across various domains, such as payroll, employee benefits, human resources, and risk management.

Now that you’re done, take a closer look at different tasks and sort out the ones you can manage in-house and those that’re better suited for outsourcing.

Align with Your Needs

Once you clearly understand the tasks you plan on delegating, it's time you start looking for a PEO that aligns with your business needs and goals.

How? Here’s what you need to look at –

  • Their track record of working with companies in your industry.
  • Their range of services
  • Their packages and prices
  • Their certifications and accreditations
  • Their level of flexibility in tailored service

Your Go-To PEO Partner In The UAE

As a small or mid-sized business in the UAE, partnering with a Professional Employer Organization (PEO) can significantly improve your business. However, it is essential to choose the right organization to partner with in the first place.

If you’re searching for a reliable partner, TASC is here for you. With 16+ years of experience in the industry, we have the necessary expertise and technology to handle all your HR needs, from talent recruitment and management to payroll, benefits, HR, and risk management.

Reach out to our experts for a free consultation today to see how we can help you!