What is an Employer of Record? Everything You Need To Know - Image by Tumisu from PixabayWith the advent of remote work, there is also a talent pool beyond the borders of ones home nation. However, the regulations and compliance associated with hiring such employees are a barrier. An Employer of Record can overcome that barrier. An EOR can also help organisations to create a presence in foreign countries.

What is an EOR, and what does it do?

Organisations have had to explore different avenues to keep their edge in maintaining global talent. Businesses have also had to handle themselves in adherence to the local laws and regulations that they have chosen to hire within. This can be an extremely tricky environment to traverse through, especially for firms that are looking to engage with new employees at an international scale for the first time.  Thankfully, the existence of an Employer of Record (EOR) can help. An EOR is a third-party provider for the organization that is assigned full responsibility for employing remote workers for them. They can and will help smooth out this process and make it far simpler to complete.

An Employer of Record serves as the legal employer of workers in a specific country or jurisdiction. They engage in actions on behalf of the company that they are partnered with. By assuming the role of the employer in the organization’s stead, an EOR’s job is to shoulder various compliance responsibilities associated with the worker’s employment. Responsibilities can include arranging payroll, taxes, benefits, and other various contractual obligations.

The end client can give operational instructions within the scope of the project at hand. However, all matters related to employment (performative, managerial, or otherwise) are legally bound to the EOR as the sole legal employer. Compliance with local regulations and labor practices is also an undisputed obligation that the EOR must uphold. A key part of the EOR’s duties is to ensure that this is always achieved.

Why engage with an EOR?

Partnering with a Global Employer of Record offers the company numerous advantages should it look to expand its global footprint and set up a presence outside of its home region. The EOR will streamline the process of international global hiring and recruitment. It can facilitate quick onboarding and reduce the administrative burden while ensuring compliance and assuming legal responsibilities.

Moreover, as a financial advantage, engaging with an EOR will reduce the costs on businesses when compared to establishing their own legal entities in foreign countries. Setting up and maintaining a foreign legal entity can take up a significant portion of time and resources for the firm. An EOR can provide invaluable support in mitigating the risks and uncertainties that are attached to employing workers in entirely unfamiliar jurisdictions.

Entrusting the employing operations to an Employer of Record has many upsides. The biggest is that they will oversee all the necessary procedures and red tape associated with hiring remote workers. This, of course, takes the inherent difficulties and complications away from the main firm to handle, along with the risk of encountering possible oversights.

In short, a capable and proficient EOR will advise the company on the regulatory and employment practices that must be followed. For example, the EOR will arrange:

  • The worker’s health benefits
  • Be responsible for their insurance
  • Deal with compensation by processing their salaries and payroll,
  • Deal with contract termination and offboarding

All of these tasks may hold different standards and follow different criteria depending on the location and its rules of conduct.

How do I pick an EOR?

Many factors must be considered when choosing the right EOR partner for your international expansion. Below are seven selection criteria to consider when choosing an EOR.

Platform integration to business applications

The EOR platform should have integrations, if not hyperautomations, to connect with the organisation’s existing technology stack, such as HRIS and Finance solutions.

Management features of platform

The EOR should have an understandable and easily-accessible platform to operate on. Consider how tailored the features are. That will determine how smoothly the company and its employees are able to integrate it into their operations to assist in their functions.

Pricing and transparency

The EOR should provide clear and transparent pricing structures. These will help the business avoid the trap of hidden fees and charges. This reduces uncertainties and lets the business build knowledge of how the EOR operates. It also allows for consistent billing and reliable forecasting on the business’ part, something that is necessary for budget considerations and restraints.

Accuracy in calculations

The next thing to examine is how thorough and accurate the EOR is with their numbers when it comes to payroll taxes and wages or employee benefits and perks that are tied to the region that they are overseeing. They must demonstrate a grasp of statutory requirements like social security contributions. The firm should understand how to navigate the employer-employee relationship, and the EOR should be able to get them there.

Expert knowledge of world markets

To be successful, the EOR must be shown to offer an extensive understanding and deep knowledge of the countries and their markets that the firm is planning to hire their remote workers from. The firm should be able to have full confidence that their partner organization is the exact expert to consult with in relation to local employment laws and regulations so that they can always remain on the right side of the law.

Reliable and accessible support

An EOR that goes above and beyond can provide support that is promptly delivered and comprehensible at all levels. They will build a relationship with both the firm’s existing workforce and the newly onboard employee. Be sure to identify the ones that can offer insightful resources. These resources can help solve complex problems and address concerns while accommodating the different time zones and language barriers.

Substantiated endorsement from others.

Lastly, research into an EOR should never be Undervalued, especially when reviews and insights report the organization as a dependable affiliate to partner with. It is more advisable to engage with Employers of Record that has been recognized by these credible external sources for their expertise and reliability in global employment solutions. The very simple reason for this is that it will not only assist businesses in detecting pitfalls and hazards to steer clear of and avoid but also to take preventative measures against them.

A partner in international recruitment

A capable and well-qualified Employer of Record will always be one of the most valuable partners for businesses that want to recruit globally. They assume all the legal responsibilities and compliance matters. This can pave the way for companies to grow their presence internationally with as minimal fuss and confusion as possible—something many owners could only dream of.

With an Employer of Record, the business can painlessly access diverse talent pools. Even more importantly, it mitigates the ugly risks associated with cross-border employment. If you’re searching for one that will help your business through this whole process and accomplish such seamless outcomes, look no further than at how GoGlobal perfectly achieves this.

Beyond Tech MediaBeyond Tech Media is a leading digital marketing agency based in New Zealand with clients worldwide. The company specialises in SEO, Google ads and Facebook ads.


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