Few things you should know about the Employer of Record
Hiring new talent, especially in a country other than the company’s country of origin, is a complex task. Consequently, many companies decide to hire the services of an Employer of Record. This, with the aim of facilitating their operations within the new country in which they intend to enter.
In this article, you will learn some important points about the Employer of Record.
- Employer of Record
- What are the obligations of an Employer of Record?
- Why hire an Employer of Record?
- What are the benefits of hiring an Employer of Record?
- What factors should be taken into account to hire an Employer of Record?
- How can we help you hire an Employer of Record?
1. Employer of Record
The Employer of Record is a company that assumes the labor responsibility of the workers in favor of another company. Legally, the Employer of Record is the one who appears as the employer of the workers, but these will be under the orders of the company that hired the EOR.
This is a great benefit for the contracting company. Since the labor responsibility for the workers will fall on a company with experience in the new market. These companies can also act as a link between international workers and the authorities of the country.
Thus, it is a form of business organization, through which a company that will be the main company commissions or delegates the quality of the employer to another company. This contracted company, which is the Employer of Record, will supply the main company with its own workers, who will be under its exclusive subordination, but the legal consequences of the employment relationship will fall on the EOR.
2. What are the obligations of an Employer of Record?
The main company will be responsible for the development of the productive activities of its company, in addition to having the obligation to provide a safe workplace for workers who legally belong to the Employer of Record. For its part, the EOR will take care of and assume everything that being an employer entails, such as paying payroll, paying taxes, benefits, etc.
This is a great business strategy especially, for those companies looking to expand internationally. Wanting to do this alone is an extremely complex activity that actually requires the participation of professionals in the field. Especially, because the company is in a new country, with different laws, and in the event of non-compliance with these laws, this would result in a sanction depending on the country in question.
In addition to this, without a doubt, having EOR services is a great help that will facilitate the entire process involved in adapting to a new country. Therefore, the entrepreneur will be able to concentrate on the activities that make his company productive and profitable.
Here are some of the main responsibilities of an Employer of Record:
- Handles all administrative tasks related to employment at the local level.
- Is responsible for hiring.
- Set up the contract in accordance with local labor law.
- Manage payments and taxes.
- Manages most of the hiring expenses.
- Provides all work permits and visas if necessary.
3. Why hire an Employer of Record?
There are many reasons an employer should consider in relation to hiring an Employer of Record. Probably, the most important is to facilitate all the legal and bureaucratic procedures involved in being an employer of a certain number of workers.
Also, it is an external agency that is in charge of in-site and remote hiring, recruitment, and human resources processes. They do not replace your own HR division but augment it. Therefore, the Employer of Record can help you with the basics of hiring. Hence, that this process in other countries is simple.
Each legal regulation of a country represents a difficult obstacle to overcome for a foreign businessman on his own. Thus, this is the main reason to hire an Employer of Record. And it is nothing more than facilitating the foreign entrepreneur to enter the market in a new country, where this company effectively knows and is established.
When a company hires people outside the country in which it operates, it will have to open a subsidiary in each of the countries in which it intends to hire. To simplify, for example, if a company is based in one country and wants to hire a person in India, it will have to register a branch in the new country. Registering a business carries with it a host of laws that must be followed.
However, there is an alternative. So that a new branch does not have to be opened, and this alternative is the Employer of Record in India. Hiring people through the Employer of Record services means there is no need to have a local business. Instead, global employees are hired on behalf of the company.
4. What are the benefits of hiring an Employer of Record?
This business modality allows companies to overcome distance and national borders when hiring new employees. As a growing trend in the world, especially due to the COVID-19 pandemic, this way of hiring employees has many advantages over in-house solutions.
As you can see, there are many advantages for which it is convenient to hire an Employer of Record. But, below we present the most important benefits in detail:
4.1 Easily take your business to world markets
You can access other markets in different countries. By being able to instantly hire employees around the world without the need for a branch registration, you will accelerate the expansion of your business. Because of this, this is a great option for small businesses looking to cover multiple markets. It also works well with larger companies that want to find an experienced workforce that is already used to working in the local field.
Also, as a small business owner, you will want to avoid investing in a full-time HR division, at least before your business gets off the ground. Hiring an Employer of Record can offer you the use of their HR professionals at a lower cost, thus being a profitable way to hire new employees in other countries.
4.2 It takes care of everything
When you get a new hire through an Employer of Record, the new talent will be ready to work for your company. The EOR will have already taken you through the onboarding process and prepared you for the job. In addition, it has its own payroll software and takes care of the payment of all your employees. Therefore, you will not have to worry about work situations.
Finally, if the employee does not fit the position, the EOR will cancel the contract. Likewise, the EOR does not influence your business decisions as the owner of the company. You are the total leader of the employment relationship of your staff. In this sense, the Employer of Record is in charge of the administrative tasks around the hiring, until the employment relationship ends.
With the rise of remote work and the internationalization of companies, strongly driven in recent months by the pandemic, organizations are opening their hiring horizons to attract new talent.
4.3 Work environment adjustable to the needs of your company
The Employer of Record will provide a more convenient work environment for the local people they hire. Without a doubt, they will meet your needs when hiring, but they will also make the process easier for employees. Each Employer of Record is used to working with potential candidates in their area. They know better both the work culture of the people they hire and how to properly manage integration at the local level.
4.4 Save time and money
Companies without the necessary help companies can spend time and money establishing themselves in a foreign country. However, resorting to an EOR will make things easier. Since it has all the legal, economic, and personnel structure to be able to carry out these activities.
For its part, the Employer of Record in Europe is a kind of intermediary between the main company and the government authorities. Since it has all the resources for this main company to comply with the law established by these authorities.
4.5 Facilitates immigration procedures
Immigration procedures regardless of the country in question are usually tedious procedures and even more so if it is a foreign country. Likewise, compliance with these procedures is of the utmost importance since non-compliance could have consequences that could mark the company in the country where it intends to expand.
For its part, the EOR is the legal employer of the workers. Who are under the command of the main company. Therefore, immigration procedures, and the process for obtaining work visas, among others, are reduced.
4.6 It allows the entrepreneur to concentrate on the main activities of the company
This is because all procedures related to workers, including legal responsibility, will fall on the Employer of Record. Therefore, the employer can dedicate himself without any type of labor concerns to activities that generate economic productivity in the company.
Forget it and leave tasks such as payroll payment and management, payment periods, payment, and the onboarding process in expert hands. These tasks can be carried out by the Employer of Record to ensure compliance with the regulations in a timely manner.
The benefits and challenges of the Employer of Record can be subjective. What seems like the best move for some companies may backfire on others. However, there is no denying that with remote work opportunities and new markets, this type of employment setup is becoming more and more common. Therefore, in general terms, its use has many more advantages than disadvantages.
5. What factors should be taken into account to hire an Employer of Record?
These factors are as follows:
5.1 The Employer of Record contract must benefit the company
This is especially about the scope of the services of the Employer of Record. And in addition, the employer must make sure that this service does not negatively affect the company’s finances.
An important factor that must be verified is the quantity and quality of clients that the Employer of Record that is intended to hire has. This will reflect the quality of the service of the Employer of Record.
Undoubtedly, this factor is of the utmost importance to determine whether to hire a certain Employer of Record or not. And it is nothing more than the results generated by other companies. If you have the possibility of accessing this information through the opinion of other client companies, consider whether this opinion is positive or negative and act accordingly on the basis of the information you have.
6. How can we help you hire an Employer of Record?
If your company is considering hiring the services of an Employer of Record in the UK or an Employer of Record in France, EOR Middle East is an Employer of Record legal and it has all the necessary platforms for your company to access new international markets. Experience and results guarantee the quality of the best Employer of Record services.
This is the moment to make your company take off beyond its borders. With our help, relocating will be an experience that you will enjoy with us. We have helped large companies around the world to establish themselves outside their borders. We can help you hire contractors and full-time employees alike. Therefore, do not think about it anymore and contact us.
Similarly, if you want our advice so that your company is an Employer of Record, we can also advise you and explain how to become an EOR. If you intend to hire our services, you can contact us at: [email protected]. In case you have questions, EOR Middle East has trained staff to resolve all your questions, concerns, and requests. Call us now at +971 43 316 688.
In the same way, if you want to work with us, send us your CV to: thetalentpoint.com. Or through our email address: [email protected]. Our recruiters will analyze your profile and seek to place you in a vacancy that we may have available.