Start-ups Drive PEO Demand

The increasingly globalized marketplace is changing the way companies, including start-ups, are resourced. Start-ups across the U.S. are driving demand for international professional employer services to help meet their staffing needs worldwide, particularly in Europe and Africa. In fact, over the past three months, nearly half of the PEOs our company have spoken with have expressed interest in support for their start-up clients overseas.

Traditionally, start-ups look to cement their positions domestically before thinking global, but today’s business owners are changing that pattern. Expanding overseas at an early stage is no longer just an option for many American businesses; it’s a must for a number of reasons.

The first is that it maximizes potential revenues. Many international markets are becoming easier to access and can dramatically increase the size of your target market. According to Michael Fink, founder of Reputation.com, going global can expand a U.S. start-up’s customer base by 67 percent.

Furthermore, domestic markets are increasingly crowded in a number of key start-up sectors, and international markets represent the only potential source of revenue.

Largest PEOs in the U.S.

Finally, for start-ups that are Internet-based, their competition is international and first-mover advantage can be crucial. These businesses do not have the opportunity to practice on the nursery slopes of local and domestic markets, but are thrust straight onto the international ‘black-runs’.

In order to thrive, these businesses are expected to act like multi-nationals developing a local presence at an early stage to gain the confidence of the local customer base. But with fewer resources than larger companies, support is needed. PEOs organizations that provide businesses with support around activities like payroll and compensation are increasingly in demand to support start-ups’ overseas expansions. As global competition increases, the need for specialized staffing services to support expansion in those areas is growing.