As the business world grows more and more competitive, companies are starting to adopt new strategies to keep their businesses afloat. For many large firms, one of these alternative strategies is to expand their global reach.
Many companies appoint EOR services to handle global operations successfully, but many challenges come with such a monumental task.
By understanding the role of Employer of Record or EOR, businesses can make an educated decision about whether they should be hiring them.
Here are some tips for managers and senior leaders to effectively pick the best service.
What can an EOR do for You?
Using a global Employer of Record guarantees that all your banking, insurance, taxes, human resources, facilities, and contract terms are fulfilled. It has the necessary system in place to hire and compensate locals. Moreover, the EOR may assist you in the following ways:
- Manage salary, taxes, and benefits, as well as any related disputes.
- Onboard new hires and ensure that all requirements have been met.
- Aid local workers with any HR-related issues or activities, for example.
Working with a global EOR might be the best choice for any business, even if it has the means to form an entity, under the proper conditions.
EOR Vs. POE: What’s the Difference?
Collaboration with a firm that offers EOR services may be a preferable alternative if a business does not want to relate to a co-employment organization or does not want to outsource its complete HR function.
An international EOR is identical to a PEO in terms of services. In contrast to the co-employment model in PEO, an EOR becomes a legal employer. Handling payroll taxes, payroll regulations, unemployment claims reporting, and other HR-related responsibilities are all part of global EOR solutions.
But, before handing over the business development plans to a worldwide EOR firm, what should you check?
When to Hire the Employer of Record?
Assess the scenario and determine if you need an EOR service before choosing a global Employer of Record for your expansion needs. When recruiting in a foreign market, there are a few reasons why it makes sense to employ EOR services:
- If you’re new to the international market and don’t know enough about the market
- You’re not ready to commit, but your company needs to expand.
- You are inexperienced with the country’s labor law
- You want to form a worldwide team but don’t have a real office or workplace in the region.
- You want to establish an offshore team in a foreign country, but you don’t have the resources or workforce to manage their HR, payroll, or taxes.
What to Consider Before Choosing an Employer of Record?
Once you’ve decided that EOR is the top pick for your business, use this checklist to choose the best EOR.
Check to see if the EOR services you are hiring operate in the countries where you want to hire employees since not all EORs are created equal.
It’s possible that the EOR won’t be informed of changes in employment laws or human resources policy if they don’t have a local presence in the regions where you’re interested. A novice EOR in a region where they aren’t active may cause concerns when dealing with disputes, salaries, leaves, and other compliance-related problems.
Examine details from the EOR to see if web communications are encrypted using the HTTPS protocol. Ensure that no sensitive data is exchanged on the standard. You may also inquire about how many persons in the EOR will have accessibility to your workers’ data and the implications of the EOR mishandling data before entering into a partnership.
Pricing and Plans
The EOR may charge a service fee in two ways. It may either charge a fixed fee or a portion of the employee’s pay for each employee. Employee pay varies across workers, regions, job responsibilities, and work hierarchy, making the fixed model simpler to handle.
You should also find out if there is a payment in addition to the service price. You should also check to see if the EOR sends an invoice out before the end of the month or the scheduled payment date. This will guarantee effective time management and the avoidance of any delays or technical concerns.
Picking the Right Service
Some EOR firms provide complete employee lifecycle services. It’s up to you if you only require EOR or want them to manage all your remote hires’ HR and administrative duties.
If you don’t have an HR staff or your in-house staff is too resource-constrained to handle your remote staff in other locations, it’s always a smart idea to go with complete lifecycle services.
It may not be easy to expand a business offshore, and having the proper personnel and talent management services in new frontiers may make or break your expansion plans. Thanks to the Employer of Record or EOR services, it’s not that tough with them.