Hiring the right person for the job has always been one of the most complex challenges for a company. This is especially true now that hiring people from all over the world is possible. Not only should you focus on getting the best-qualified candidate for the position, but you must also be in compliance with the local labor laws and regulations. There is a lot of work to be done, and this could be more than your average human resource department can handle. In these situations, you should consider turning to employer of record.
What is an employer of record?
An Employer of Record (EOR) is an organization that takes care of the hiring and compensating one or more full-time employees on behalf of another company. This enables companies to legally work with employees from a foreign country, without having to set up a branch there. Basically, relying on EOR services allows you to legally and painlessly hire anyone, anywhere in the world.
The employer of record could take responsibility for the following personnel operations:
- Processing and funding payroll
- Filing taxes
- Processing timesheets
- Creating, maintaining, and terminating employment contracts
- Employee onboarding processes for new hires
- Maintaining insurance
- Running various background checks
- Administering benefits and handling worker’s compensation
Benefits of using EOR services
As businesses embrace remote and online working, enticing markets open all over the world. Apart from these new markets, new opportunities for business expansion open up, as well as chances to introduce new members to the team. Unfortunately, this introduces some legal challenges when hiring international employees. This is where the employer of record services come in.
Saving substantial resources for your core business
Relying on an employer of record will help you save the time it usually takes to go through the hiring process. EORs have their own team of trained experts that handle the hiring and onboarding process. This will reduce the time and resources you spend on the hiring process so you can focus on other aspects of your business.
Finally, EOR can save your company a lot of money that would usually go into back-office operations, such as training your HR and recruiter team on legal matters, seeking legal counsel, and obtaining various legal permits in the countries you would like to hire in.
Reducing compliance risks
The employer of record ensures compliance with the laws of the country you’re planning to hire in. So, whether you’re planning a global expansion or just looking to hire in a single country, you will need to follow employment laws and regulations. Instead of learning a new set of rules each time you hire people from a new country, you can rely on EOR. By outsourcing hiring new people, you effectively don’t have to worry about local regulatory laws or work permits, as the employer of record will take care of it on your behalf.
Another important aspect of EOR services is that they give you opportunities for international employment while remaining completely compliant with the tax laws of the country they are hiring in. Thus, apart from knowing your employees have all of their rights and employee benefits protected, you can have peace of mind knowing that employment taxes are covered.
Employer of record services help with the onboarding process
Apart from following the right employment laws, and keeping your employees on a local payroll, employers of record can help you with preparing new recruits for the job. As their legal employer, they will take care of the onboarding process for any new employees.
