A Nigeria PEO, or Professional Employer Organization, is a service provider that helps you hire and manage employees in Nigeria, though many can also help you hire around the world. Most International PEOs give you the chance to employ distributed teams, so that you pay the same service fees if you have ten employees in Nigeria or one in this country and nine more scattered across the globe. Here’s how they work.
When you start doing business in Nigeria, your PEO partner may help you find talent with active recruiting services, or simply give you tools that help you recruit on your own efficiently. Once you locate your workers, the PEO will draw up legally compliant contracts to help you hire them. It will onboard them quickly so that they can start working for you in just a few days. Once they do, the PEO will take care of their HR needs throughout the course of their employment.
Your PEO will act as a co-employer, managing payroll, paying your employees, administering their mandatory benefits, and handling their paid time off (PTO), while you focus on their work schedules and tasks. Most offer supplementary benefit packages as well, so that you can enhance your employees’ compensation packages. They also typically provide several other services to support you in Nigeria, like immigration support for foreign workers, background checks, expense management, and more.
Aside from these HR functions, Nigeria PEOs also take on the responsibility of keeping your employment arrangements compliant with all local tax and employment laws. They create and manage employment contracts, monitor Nigerian law for changes, and adapt to them as needed. They manage employee income tax payments to the Federal Inland Revenue Service (FIRS), as well as employee and employer social security contributions. By calculating these contributions accurately, paying them on time, and reporting to the authorities as required, PEOs ensure that you’re protected against penalties in Nigeria.
While PEOs employ HR, tax, and legal experts, they typically deliver their services through cloud-based digital platforms, supplemented by support staff. Some PEOs offer basic platforms with only core functions like general admin, payroll, PTO, and benefits administration included. Others provide platforms that include a comprehensive range of functions and tools, so that you can manage all aspects of HR in a single place. The latter are known as human resources information systems (HRISs), and can include employee engagement, performance management, talent management, time and attendance tracking, and many other useful tools. Most platforms include some degree of integration, with some able to connect and share data with dozens or hundreds of other applications.
You may recognize the services of a PEO as very similar to those of an EOR or Employer of Record. Both of these types of service providers manage HR and compliance. However, a PEO works as a co-employer, while an EOR can directly hire employees on your behalf through its Nigerian entity, meaning you don’t need an entity in the country when you use an EOR. Generally, these two terms are used interchangeably by providers, and many offer both PEO and EOR services in Nigeria.