An Employer of Record (EOR) service offers businesses the ability to legally employ local workers without establishing a local entity in a given country. This service handles various HR functions such as payroll processing, employee benefits, taxes, leaves, and contracts. By establishing a legal presence on behalf of clients, an EOR allows businesses to manage overseas employees compliantly.

However, the decision to use an EOR depends on a company's specific requirements and goals. Business owners need to determine the right time to engage an Employer of Record. Before considering an EOR, it's essential to explore the array of employment solutions available in the market.

When to Utilize an Employer of Record

The optimal time to employ an EOR often arises when a business contemplates hiring international employees. Several scenarios indicate the right time to use an Employer of Record:

1. Global Expansion: When expanding operations into a new country, hiring local employees is a crucial step. An EOR facilitates this process by simplifying operations like onboarding and payroll, allowing businesses to quickly build a local team and initiate tasks such as market research and client outreach.
2. Hiring International Employees: Businesses seeking global talent at cost-effective rates may opt for international hiring. Using an EOR allows companies to skip the complexities of setting up an entity and focus on building a skilled international team, saving both time and money.
3. Hiring Multiple International Freelancers: In cases where businesses engage multiple international freelancers for projects, managing tax and compliance rules across various countries becomes challenging. An EOR can be beneficial as it supports freelancer onboarding and management, easing the burden on the in-house HR team.

These scenarios underscore the appropriateness of using an Employer of Record. However, it's essential to compare EOR services with other options to make an informed decision.

Comparisons: EOR vs. Other Workforce Solutions

1. EOR vs. PEO: While a Professional Employer Organization (PEO) offers services similar to an EOR, the key difference lies in the requirement for a local entity. PEOs necessitate a company to have a local entity in the employee's country, making EOR more suitable for businesses without an existing local presence.
2. EOR vs. Legal Entity Setup: Setting up an international entity is ideal for establishing credibility in a new market. However, this involves substantial paperwork and costs. EORs serve as a cost-effective alternative, handling HR administrative functions without the need for extensive documentation.
3. EOR vs. Staffing Agency: EORs focus on administrative HR tasks, while Staffing Agencies are involved in candidate sourcing and recruitment. If a business requires extensive candidate search and selection, an EOR may not be the ideal choice.
4. EOR vs. Subsidiary: Subsidiaries are suitable for large-scale operations, requiring a physical presence in a new area. EORs act as a subsidiary for employing local workers but without the need for a full subsidiary setup.

Advantages of EOR in Global Hiring

Utilizing an EOR for global hiring offers several advantages:

1. Legal Compliance and Monitoring: EORs ensure compliance with local labor codes and stay updated on regulatory changes, reducing legal risks for businesses.
2. Cost-Effective Global Expansion: Partnering with an EOR eliminates the need for businesses to set up entities in target countries, streamlining the hiring process and saving costs.
3. Competitive Benefits, Payroll Management, Taxes: EORs handle payroll calculations, tax deductions, and ensure employees receive required benefits, promoting fair and competitive employment practices.
4. Risk Management: EORs understand and navigate the legal complexities of employment in different countries, mitigating risks for businesses.

Choosing the Right EOR Provider

When selecting an EOR provider, businesses should consider the following:

1. Global Coverage: Ensure the EOR operates globally or covers the specific countries/areas targeted for expansion.
2. Data Privacy and Confidentiality: Confirm that the contract explicitly addresses data privacy and confidentiality.
3. Customer Service: Assess the accessibility of customer service to address any complications that may arise.
4. Transparency on Pricing and Services: Choose an EOR that is transparent about pricing and clearly outlines the scope of services.
5. Assigned Account Managers: Check if the EOR assigns account managers as a point of contact for efficient communication.

Get Started with Global Expansion using Remoly

Remoly's EOR services provide a legal and streamlined approach to managing global teams. With a SaaS-based platform covering over 150 countries, Remoly simplifies payroll processes, benefits, and expenses. The platform ensures compliance with local labor codes and offers multilingual, 100% compliant employment contracts.

FAQs about Remoly's EOR Services:

1. Data Sharing: Remoly engages with third parties to benefit clients, ensuring confidentiality and limited sharing of information for its intended purpose.
2. Entities in Different Countries: Remoly owns over 150+ local entities across APAC, Europe, and the Americas, collaborating with third parties as needed.
3. Centralized Documentation: All documents, including contracts, are stored in Remoly's databases for easy access.
4. Ending Employment Agreements: Remoly assists in the offboarding process, ensuring compliant and jurisdiction-specific contract termination.