8/31/2017. Grow Your Domestic Client Base with Global Knowledge. Steven Bentley Avitus Group Javier Romeu Capital GES Bill Smyth OnPayroll.

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1 Grow Your Domestic Client Base with Global Knowledge Steven Bentley Avitus Group Javier Romeu Capital GES Bill Smyth OnPayroll.ca Canada Most PEOs serve domestic clients More and more PEO clients are expanding into international waters. Employment of R&D companies (software, pharmaceutical, electronic, etc) that performed or funded U.S. business R&D (thousands): 2013 Foreign World Wide Domestic Forign Size of Company Share Employment Employment Employment (number of domestic employees) Companies with <100 ee's % Companies with ee's % R&D companies with employees have over 170% more international employees, than companies with less than 100 employees. Excludes federally funded research and development centers Source: National Science Foundation, National Center for Science and Engineering Statistics, Business R&D and Innovation Survey,

2 What do YOU do when a client asks you to add client employees in another part of the world??? To win the business of companies with more than 100 employees, it is becoming vital to have solutions that address global workforce needs. HR Departments are challenged with: Cultural differences Language barriers Statutory benefits Compliance requirements Hiring, disciplinary, and termination HR Technology / Infrastructure US Based PEO s do not need to be experts on international workforce needs But they need to be prepared when prospects and clients ask for help. 2

3 If a PEO can address the significant challenges companies face with a global workforce while focusing on their core business, the impact can be significant: Win larger clients Improve client retention New revenue streams from partnerships Increase overall value = higher profit margins PEOs in the International Space Similar task distribution as in domestic market Payroll and benefits administration Deducting and paying taxes Worker's compensation and health insurance In international markets, the PEO is the Employer of Record Responsible for worker employment Employment relationship is outsourced Trust the experts! Two Cases: Inbound and Outbound 3

4 Out Avitus started with traditional efforts to enhance outbound services Establishment of external partnerships These were designed as two way agreements Financial incentives for referrals Out becomes In Client demand for outbound services remains weak Primarily due to size of client and mix of Avitus business No great influx of clients driven by outbound services External partnerships begin to develop inbound demand Traditional inbound growth due to nature of US economy Increase in inbound inquiries due to political environment both in the US and in the world. Focus on In Avitus developed domestic services for inbound clients. Co employment directly with foreign companies Services beyond co employment Entity formation Outsourced back office services Tax planning and compliance Immigration assistance 4

5 Canada EH? 10 PROVINCES 3 TERRITORIES Federal (over 189 tax jurisdictions) Canada Canadian Differences Pure PEO (Employer of Record) vs Hybrid (ASO & Employment Agency) Co Employment Employment at Will Employment Standards Currency PEO services include: Offer letters and Handbook Extended Health & Dental, Life LTD & AD&D, Retirement programs, EAP and WCB Sole HR Department functionality Employment Standards Minimum Age Minimum Wage Hours of Work Leave Information Overtime Records Retention Statutory Holidays Vacation time and pay Terminations Timing of Payments Pay advice format and content 5

6 Canada What to do to retain that client/prospect Incorporate in Canada Provincial or Federal Partner with an existing Canadian PEO compatibility Refer to a Canadian PEO NAPEO member PEO Client Life Cycle YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 PEO clients spend 95% of their time with Client Services, and only 5% with Sales. Client Engagement 6