In 2025, business expansion looks different than it did just a few years ago. Companies are hiring talent across borders, operating remotely and navigating new compliance landscapes. Choosing the right global employment solutions is critical and for many, that decision comes down to understanding the difference between an Employer of Record (EOR) and a Professional Employer Organization (PEO).
At Suna Solutions, we help companies streamline their workforce strategies to stay agile, compliant and competitive. If you’re deciding between these two models this year, here’s what you need to know.
What Are Global Employment Solutions?
Global employment solutions are services that allow businesses to employ talent across various jurisdictions without the need to establish their own local entities. These solutions make hiring simpler, faster and less risky especially when operating in unfamiliar markets. EOR and PEO models are the two most common routes.
EOR: Employer of Record
An Employer of Record (EOR) is a third-party organization that legally employs workers on your behalf. The EOR handles taxes, payroll, benefits, onboarding, offboarding and compliance. You still direct the employee’s daily work, but the EOR takes on the legal burden. EORs are often used by companies expanding internationally, hiring remote employees in new states or converting contractors to full-time employees.
PEO: Professional Employer Organization
A Professional Employer Organization (PEO) is a co-employment partner that shares employer responsibilities with your business. PEOs typically manage HR tasks such as payroll processing, tax filings, benefits administration and compliance. However, you must have a legal entity in the location where employees are being hired. PEOs are ideal for small to mid-sized businesses looking to improve internal HR efficiencies and provide better benefits to employees without building an entire HR department.
Key Differences Between an EOR and a PEO
An Employer of Record (EOR) becomes the full legal employer of your workforce, handling payroll, taxes, compliance and benefits on your behalf. With an EOR, you don’t need to set up a local entity, making it ideal for companies hiring across state or international borders. Onboarding through an EOR can happen in a matter of days, offering speed and scalability for fast-moving organizations. The EOR model is best suited for international hiring, remote expansion or when you need tight compliance controls in new regions. Most importantly, the compliance liability is fully managed by the EOR provider.
In contrast, a Professional Employer Organization (PEO) operates through a co-employment model, where you and the PEO share employer responsibilities. Your company still needs to have a registered legal entity in each location where employees work. PEOs tend to focus on domestic operations, and onboarding timelines depend heavily on your existing infrastructure. They’re best for businesses seeking to outsource HR administration, provide competitive benefits and manage costs more efficiently. With a PEO, compliance is shared between you and the provider, requiring more internal oversight.
How to Choose the Right Model in 2025
When weighing global employment solutions, start by assessing your company’s growth strategy for the year ahead. Here are a few questions to consider:
- Do you plan to hire outside of your home country or across multiple states? An EOR can help you avoid the hassle of setting up legal entities.
- Is your goal to scale domestic operations while improving HR systems? A PEO may be a better fit to offload administrative burden and improve compliance.
- Are you in a heavily regulated industry or new market? An EOR helps mitigate risks by handling all legal employer obligations.
- Need to scale quickly without a long-term footprint? EORs can get you up and running fast while you test a market or launch a new team.
The Market Is Growing
The global market for outsourced HR services is gaining momentum in 2025. According to the National Association of Professional Employer Organizations (NAPEO), businesses that work with a PEO grow twice as fast, experience 12% lower employee turnover and are 50% less likely to fail compared to those that don’t. While PEOs continue to provide value for domestic operations, many businesses are now exploring Employer of Record (EOR) services to support rapid global expansion and remote workforce compliance.
When to Talk to a Partner Like Suna
Whether you’re considering an EOR to help onboard a team in Canada or exploring how a PEO can streamline your domestic HR processes, you don’t have to navigate this decision alone. Suna works with companies of all sizes to implement tailored global employment solutions that match their business goals. We don’t just offer compliance and payroll support, we help you scale smarter, faster and with more confidence. Our consultative approach means you get more than a provider, you get a partner who understands where your business is going and how to get you there compliantly.
Choosing between EOR and PEO services in 2025 isn’t just a legal or HR decision, it’s a strategic one. As the workforce becomes more global and expectations shift, the right global employment solution will support your expansion, reduce your risk and protect your bottom line.