The Use Case Podcast – Storytelling about Global PEO Services with Ragu Bhargava

Music:   Welcome to RecruitingDaily’s Use Case Podcast, a show dedicated to the storytelling that happens or should happen when practitioners purchase technology. Each episode is designed to inspire new ways and ideas to make your business better as we speak with the brightest minds in recruitment and HR tech, that’s what we do. Here’s your host, William Tincup.

 William Tincup:   Ladies and gentlemen this is William Tincup and you are listening to the Use Case Podcast. Today. We have Ragu from Global PEO Services and we’re learning all about Global PEO Services.

And they’ve got some wonderful news that he’s also going to announce and talk to us about as well. So we’ll be learning about the business case or the use case for why prospects become customers of Global PEO services and also why customers stay customers. And without any further ado, Ragu would you please introduce both yourself and Global PEO Services?

Ragu:   Yeah. Thanks William. And thanks for the opportunity to do the podcast with you. My name is Ragu Bhargava. I’m the CEO of Global Upside Corporation, which as of January, is now a Safeguard Global Company. So we merged with them in January 2022. Let’s talk about Global Upside.

 William Tincup:   Yeah, go ahead.

Ragu:   Sorry. Let’s talk about Global Upside Corporation, which provides supports for companies throughout the business lifecycle, offering incorporation PEO or employer of record. And we’ll define that a little bit more in a minute. Accounting, HR, payroll compliance, and M&A services. And we do this across the globe, just like our parent company Safeguard does.

 William Tincup:   And for the audience what’s really interesting is there’s not a lot of players in both global payrolls. So if it was just payroll as a service and there’s not that many players that do that well.

And there’s also, with Safeguard and with Global PEO Services, y’all have another layer of actual services that you provide for companies, for the audience, when you’re thinking about it, like think of a multinational that’s based in Houston, but has employees in 15 different from countries or 40 different countries, how do you get them paid? How do you have benefits?

How do you do all of the things that you need to do if they were all in Houston, Texas, and Ragu, his firm’s expert at that. And the company that they’ve merged with has also has been an expert in that. So Ragu tell us a little bit about the services layer and just let’s unpack what you do for your clients.

Ragu:   So, William, as you know we are today focusing on the PEO or the EOR services. PEO is professional employment organization, and that’s known as PEO in the US, but outside of the US, it’s known as EOR, or employer of record. So when I use PEO it’s the same term in our mind.

 William Tincup:   Yeah, Sort of is.

Ragu:   In a nutshell, we provide two services to our clients. One is HR services, and the second one is payroll services. So the idea being like you said, William, you’re trying to hire somebody overseas, how do you do that?

And you need a full HR support and you need a full payroll support to hire people beyond having a infrastructure and all of that. So when you don’t have that infrastructure clients, prospects come to us, and we offer that in, like I said, 170 some countries.

We are the largest provider of PEO services with our own footprint. So we have entities across the globe in many, many jurisdictions. And what we do is we will engage with the clients to hire these people on our payroll. So the full HR support tech from hire to retire.

Employment contracts that are legally compliant in that country, bilingual employment contracts in countries like Germany, France and a lot of other ones.

 William Tincup:   So real quickly for the audience, some of the biggest barriers for global HR leaders is obviously things that you’ve outlined, what are some of the… Because, over 170 countries, obviously and within those countries, there’s probably state to state or territory to territory.

There’s probably also other compliance and laws and things that you have to understand. What are some of the things that you help folks, like some examples of you’re hiring someone in Germany, in Munich. Okay. Here’s some of the things that you need to understand about hiring in Munich that would be different than hiring someone in Bangalore.

Ragu:   Yeah. And that’s a really interesting question because, if you asked me a very open ended question, I could make a list that is, ad nauseam, correct. Goes on to pages after pages, but, but obviously we don’t have time for that. But, if you think about it, just like when you hire somebody in California versus Nevada, the state law is different.

 William Tincup:   Right.

Ragu:   And similarly, when you go to Canada, the provincial law is different from Quebec to say British, Columbia. But now think about crossing the border, going from US to Canada. Canada, doesn’t care about the US law, and they want to have their own laws and their own processes on everything.

And similarly, your example of Germany versus Bangalore, India the rules are very, very different. In India, you can actually do a… As a very simple example, you can do a contract in English and it’s completely valid.

In Germany, it has to be bilingual in. In India, you can actually electronically sign it, in Germany, it has to be manually signed. You need a vet signature otherwise the contract is invalid.

And the list goes on and on. But before you try to get into all of those mechanics of how do I onboard, how do I do that kind of stuff with a new employee. You kind of think about, do you even know the German law? And do you even understand what it means? Because yes, you can go to some German website and read up, but it’s one thing to read the book, and it’s a very different thing to execute to it.

 William Tincup:   Well, I was thinking as you were saying that, how do you keep up? Because it’s not like it’s static and it just stays still, Seattle changes their minimum wage, and that just happened. Well, the payroll library has to then change, so that you can be compliant. And that’s just a simple example in the 100 plus, 170 countries. Well, by the way, how many countries are there?

Ragu:   I’ve done this research many times that I can’t figure out the exact number, just a little over 200 countries.

 William Tincup:   I can’t either. Because it keeps adding because at one point it was 186 and it like oh, okay, all right, good, a number I can remember. Nope. But anyhow, it’s staying compliant that I think would trip up most people if they tried to do this themselves.

Ragu:   Absolutely. Because I started with like, how do you figure that out? What the law of the land is, but then how do you keep up is an extremely important point. And a couple years ago, what most people don’t know is in France, there was no requirement to withhold income taxes from an employee’s pay stub.

They were required to pay the income taxes to the government on their own. Couple years ago, the government changed the law. Every payroll company, every service provider had to scramble. Now, how would you know that?

How would you know the new requirements are coming in and that’s part of what we bring to the table that we’re not just an employer, we’re actually making sure that your employees that are employed by us on our payroll are fully compliant with the local requirements. And we do everything necessary, we stay on top of the law. That’s why there is a big administrative burden on us.

 William Tincup:   Right. Yeah. And again, that’s kind of a relentless pursuit, a never ending relentless pursuit of just staying compliant with all the HR compliance. So we focused on payroll, but there’s also HR compliance, like I remember working with a company in Canada and the maternity leave in Toronto was a year.

First of all, part of me was like, well, that’s awesome. But the other part of me was like, well, how do you backfill for that? How do you actually plan for that as a HR leader? How do you plan for those things? So it’s the other compliant payroll, but also HR compliance, you help your clients with all of that. HR compliance.

Ragu:   Absolutely both sides of the equation. Because when you have employees anywhere in the world, even in your hometown, you need to provide them the right support. Because, like your example of somebody’s going on a maternity leave. But when you think about yourself as an employee, there’s a lot of other things happen. So life events.

You get married, you get a divorce, you have children, all of that has to be addressed from a benefits perspective. What is the latest in benefits? How do you make sure that your employees have the right benefits?

And some of this has to do with, as you cross the border, what is this standard offering in that country? And outside of US, a lot of the countries are very socialist countries. So you get a certain level of minimum benefits, but to attract the right talent, you have to offer more.

How do you offer more? What should you offer? If you have a young population, they may not care about life insurance. If you have a aging population, it might be important for them to have life insurance and then things like COVID happen. So is life insurance all of a certain more important for your employed team? Because, now people are worried about it and their families are worried about it.

 William Tincup:   Yeah. I was going to ask you about that Ragu. What have you seen over the last two years and just kind the changes from the employee population worldwide. What are some of the things that you’ve seen are just more in demand now than maybe pre COVID?

If you look across the spectrum of all your clients, like what’s something that… Pet insurance wasn’t important. It’s a horrible example, but pet insurance wasn’t important, now it’s extremely important. Like what are some of those examples?

Ragu:   Yeah. I think the biggest issue that I have talked a lot about myself to the media is this work from home issue or work from anywhere really. And if employers are asking employees to come back to work, that creates a real challenge in terms of hiring in terms of retention.

But beyond that… And we’ve heard about the great resignation because people are thinking about, hey, I can work from anywhere, so why do I need to go to the office. So all of that stuff, correct.

But beyond that, a lot of focus has been on other benefits like employee assistance programs or in a one single word, it’s kind of like the counseling services. So people have gone through a lot of mental stress and are you offering a benefit where they can call in and get some help or go see the right person for their challenges.

That’s become a big issue. Health benefits have become more important. Not that they never were, and they have become more important because people are now like, hey, if I get COVID and I’m in the hospital, who’s going to pay that bill for a week or two weeks of hospitalization and pretty much in every country that can add up pretty fast.

 William Tincup:   So some of the other services that you provide, you mentioned mental health. In the States, we typically think of that as EAP.

Ragu:   Yeah, yeah.

 William Tincup:   Or potentially maybe even, there’s technology now with a lot of those things. What are some of the other services that you provide your clients with?

Ragu:   Yeah, we are one of the very few PEO providers that actually offer a global plan. So whether you have employees in Philippines, Germany, Mexico, pick five other countries. I’ll pick 170 countries, correct. And all of your employees can be on the same platform, same benefit plan.

 William Tincup:   Oh wow.

Ragu:   And that is a huge thing because there is no discrimination, correct?

 William Tincup:   Right.

Ragu:   As an American, we always think about treating all of our employees across the world equally well. And so there’s no discrimination. And then these programs and certain jurisdictions are supplemental, right?

So you have basic good coverage provided by the government, but these are supplementing that. So you can go to see a private doctor or things like that. Or you can get your orthodontic work done, which may not be covered by say the government program, at least the aesthetic part of it.

Now, in addition to those, we also provide, I could talk about EAP programs, life insurance programs, short term, long term disability. And the short term, long term disability we put in place about two years ago, right?

Right at the very beginning of COVID because we’re like, hey, if somebody has to go on leave because of COVID or what have you. And we have a lot of population employees working in Utah for us, as an example, and Utah does not have a state disability program. California does.

 William Tincup:   Wow.

Ragu:   So we’re thinking like, wait a minute, the California employees have a benefit that Utah employees don’t, how do we address it? How do we take care of them? Because COVID is not discriminating.

I want to say that it can infect anybody anywhere. And so, we put those programs in place, not just for our own employees, but for our PEO employees too. And so everybody has the same coverage and everybody has the same benefits.

 William Tincup:   I love that. Well, in the States, when you work with a PEO, one of the things that they do outside of making sure that your posters and you’re compliance, and your employee handbook and all of these other things, is they do a safety audit.

And some of that’s to understand workers’ compensation, to also kind mitigate risk. But some of it just helps. I remember I was running an Ad agency years ago and the RPO did a safety audit and they found like 40 things that I would’ve never in my life have even thought about.

And it was easy fixes, all of them, all 40 of them were done in a week. And I would’ve never seen them. I mean, I saw them every day and I didn’t see them. Do y’all mingle into the safety area for your clients?

Ragu:   The safety area is important, like you said, and it is really important when employees are coming to work. What really applies in the PEO businesses, because partly because of COVID and partly because every client has one or two or five employees, just a handful of employees in every country.

The safety audits don’t quite apply because all of these people are working from home typically.

 William Tincup:   Right.

Ragu:   And over the last two years, obviously we are all working from home. But, we have office visits from our insurance providers, just make sure that, office is safe and sound and those kind things.

Now, even where we have large employee base, hundreds of employees with one client on our payroll. In the last two years in particular, because of this work from home, all of these things have taken a very back seat.

But as COVID slows down, and as we start to come back to work, if we come back to work in that traditional sense, in rhetorical perspective. Yes. That will require us to go through those audits again and make sure that we are compliant with those requirements. Because you’re right. There’s 40 things that you don’t see, but the insurance company says like, oh, look, you can’t place these chairs here or whatever.

 William Tincup:   Right. It was easy stuff like, tripping hazards and things like that, that again walked past them for years and never saw, never thought about it. Let’s pivot. And I’d like to talk to you about like, for the audience getting started.

So someone that’s never worked with either a PEO and in this case, Global PEO, and again, we’ll probably… It’s easy to use Houston, Texas and energy companies, because they’re just an easy one to pick off as an example.

Startup energy company, Houston, Texas, it’s, 10, 20 employees in Houston, and now they’re popping up in all different parts of the world. What questions should they be asking of a provider like yourself?

Ragu:   That’s a great question, William. What to ask a provider?

 William Tincup:   Right.

Ragu:   And there are some basics like, reference checks and things like that, which everybody does on every provider. So I’m not going to go into those things. But the biggest issue in my mind is what kind of a stack do you have?

Okay, great. We got it. We are going to engage with Global PEO Services here in the US, but who supports all of that backend? Who’s going to onboard that employee? Who’s going to employ that employee in that country?

And who provides the payroll services? Are you compliant with GDPR and those requirements because do you have what it takes to hire these people? Because today we may be going into Algeria with one employee, but tomorrow we may be expanding into say all of the middle Eastern countries, a hotbed for oil production, or pick the other countries, Venezuela, Russia, correct. Big oil producers.

How do you provide the services? What kind of visibility do I, as the client have into my employees that are spread in 10, 15, 20 countries, five here and 50 there. And do you have a platform that I can see these people?

And in your example of an oil company, it’s a little different than if you were say a technology company and you’re having a product release coming up and you go into your HR system and you say, oh, half my team is going to be on vacation the week I’m doing the product release. How is that going to play out for you?

So you need that visibility. So you can then manage through that and say, listen, guys, these two, three weeks, nobody can take time off. And then, we’ll let you take time off soon thereafter, or work around that.

So systems and processes are very, very important. And the people piece is just, do you provide that service internally with Global Upside Talent or do you outsource it to somebody else?

And a lot of our competition, what they are doing is they have what is called the partner model. So you engage with them, but then they just hand you over to some other provider in that country and say, oh, your payroll didn’t happen? Go talk to this guy.

Oh, the guy wants to have some benefits added. Go talk to this guy. So why are we paying you to be the middle man, if you’re going to talk to somebody else. In the Global Upside/Safeguard model, you have a challenge.

Somebody didn’t get paid, call us. We will help sort it out because it is our employee. They are on our payroll. We have thousands of employees on our payroll. We can’t just hand it over to a third party and say, hey, listen, go deal with this.

 William Tincup:   It’s interesting. I’m glad you brought that up because it was something for the audience to understand Global Payroll. As I mentioned at the very beginning, there’s not that many providers and there’s many different models of how to get payroll done globally and Safeguard and Global PEO Services.

This is a very unique model in that they’ve centralized, as opposed to using a partner or a local provider. And then they basically arbitrage all the local providers.

And so it’s a unique difference in the marketplace of a very kind of small group of providers. What do you see as, and what have you seen as, I want to say the most difficult place to employ somebody and I’m thinking of… I did some work for Brunei.

Ragu:   Oh yeah.

 William Tincup:   And it was interesting. I never got to meet the Sultan but I visited and it was fantastic, but it was also just getting work done. I was consulting and just getting work done was actually really problematic.

Like they wanted me to do a lot of these different things, which in States would’ve been… Or really in a lot of different parts of the world, would’ve been super easy.

But there, it was very challenging and you’ve got employees all over the world, where have you seen kind of the most difficult case to hire an employee, simply.

Ragu:   So William, you’re focused on the hiring cycle and I focus a little bit more on the departure cycle or when somebody’s leaving. Correct?

 William Tincup:   Yeah. Good point.

Ragu:   So when you’re hiring somebody, it’s the honeymoon period, correct? Oh, come on in. And they’re all nice and everything is great. And sure, we’ll do that for you and stuff and things. It’s just that when you are having to… Actually, I use the word fire somebody because of performance then all hell breaks loose.

 William Tincup:   Right.

Ragu:   Right. Because, then it is as acrimonious as it can get. On the other side, we’ve been doing this for 20 some years, correct? So, yeah. I mean, it’s challenging. We figured it out, but something that happens very common for example, in Germany is that if there is a separation, if the employee is not leaving off his own bill, let’s call it that, correct?

And not resigning. And the employer is somehow terminating the employee. They will always file a lawsuit. They will retain a lawyer. They will file a lawsuit. It never goes to court. It always settles out of court. And you sit down with their lawyers and the employee and your lawyers and your team, and just sort it all out.

Okay, fine. You are eligible for these kind of benefits as part of your contract. Okay. Here is a little bit of more money we’ll throw in to just sweeten the pie and all that stuff.

And they’re like, yeah. Okay, great. Done. And life goes on. But you really have to think about it from a termination perspective, departure perspective, where is it hardest? So many countries like France and Germany, and Germany I gave you the example in France, you have works council, things like that can become very, very hard to terminate people.

The other side of this is that there is a process you have to follow to terminate people. So for example, one of our clients, what they did was, and we told them not to do this. And he said, we have to prepare all the paperwork, get it in your hands. You have to fly into France. You have to meet the employee in some kind of an office type setup, and then give them the news and hand them the paperwork.

And the guy’s like, oh, I’m going through Paris. I’m just call the employee, meet them in the hotel lobby and tell them they’re fired. Absolutely. You can do that. He actually did it. And guess what? Cost them about half million dollars. So knowing the law, the process is as important as anything else and following through.

 William Tincup:   It’s interesting. Again, that’s the difference. So I was thinking of Germany and France as examples as well, because of just the way that you’ve framed up termination and departures, but it’s compliance.

So when you hire on the front end of that, you’ve got to actually think that all the way through. Here in the states, especially. I live in Texas. Texas is a right to work state, so basically a right to fire state.

So there’s not that much documentation. If you want to let someone go, you just let them go. Not so much in Germany. So you got to think differently through the whole process. Both hiring, but also engagement, retention, all of the HR stuff.

And obviously, if you’re going to part ways, what does that look like? Last question, before we roll out. Ragu, is that kind of the future of… What do you think global PEO looks like.

And not flying car stuff, but what do you see in the next couple years, of kind of how the model might change or things that you need to add, et cetera.

Ragu:   Yeah. So historically, William people have thought about PEO services. Hey, I need to hire one or two people. My first few hires I’ll use a PEO.

And as my headcount expands in that country, I’ll build my own organization, I’ll incorporate, I’ll do the whole 90 yards and bring them in house.

And that model is actually good, we are already seeing an evolution of that model where clients are saying, yeah, we intend to hire a hundred people in UK. We want you to do all of it.

 William Tincup:   Right.

Ragu:   So we’re seeing that change because keep in mind one of the things that’s happening, and this is that back to COVID and work from anywhere where now, if you want to hire that next Java programmer or that hotshot technical guy in Cayman Islands, are you going to go set up in Cayman Islands?

Do you even know where it is? It’s a known place, so, okay, fine. Everybody knows it’s in the Caribbean, but you mentioned Brunei how many people can point it out on a map accurately? Most people can’t.

 William Tincup:   I know I couldn’t, before I worked there.

Ragu:   There you go. So what happens is you going to have people everywhere in the world and possibly, and you couldn’t have your whole infrastructure to support those people globally. Because it’s just way too expensive to build that knowledge base.

And we talked about all of this, correct? So without rehashing, it’s just impossible to build that infrastructure, to keep it current, to support your employee base and stuff. So what you do is you just actually like, okay, here are my one or two centers of excellence where I have the people on my payroll directly.

Maybe it’s the US headquarters, maybe even in US. People have thousands of people on TotalSource or TriNet or things like that. Just like, I don’t want to deal with HR. I don’t want to deal with payroll. I just write one check every pay period, and I’m done. And that’s what is going to be changing in the EOR business going forward.

 William Tincup:   Love it. Thank you so much for carving out time for us. Ragu I love it. I love the model and I love what you and Safeguard are going to do together. And just, I appreciate your time.

Ragu:   Absolutely. And thanks for the opportunity to do the podcast.

 William Tincup:   100%. And thanks for everyone listening to the Use Case Podcast, until next time

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