Hiring international talent to expand your company’s global presence is an intelligent step to tapping foreign markets. An employer of record (EOR) can help your business achieve international growth without dealing with administrative and HR responsibilities.
What is an employer of record?
An EOR is an organisation that serves as the legal employer of your workforce in the country where you’ve set up your business for tax purposes. In addition, they perform the functions of HR such as payroll, compliance and other administrative tasks.
With an EOR partner, employers no longer need to go through the arduous and complex process of setting up their business in a traditional way—establishing a company in a foreign country that is both often risky and costly. Instead, the EOR will manage all the employment requirements on behalf of the business.
Advantages of hiring an EOR
The EOR’s role is limited to the responsibilities mentioned earlier. As the employer, you still control the day-to-day business operations including workplace safety, performance and termination reviews as well as on-site regulatory compliance.
The EOR facilitates the following:
- Employment contract
- Onboard local employees
- Filing employer and employee taxes
- Payroll processing
- Remit employee’s salaries and compensations
- Provide health benefits and insurance
- Terminate or rehire employees
- Handle regulatory compliance
When to hire an EOR?
Your business needs a global EOR when
- Exploring new markets
Test out your business in a new country without setting up a local entity. An EOR will help your company recruit talent, reach new customers and generate new revenue streams.
- Attracting top international talents
Most companies nowadays want to hire from other countries. The EOR will help recruit professionals from multiple countries to find the right talent with the skill sets that you’re looking for. Remote work is also an option, but they’ll also handle the relocation process when it’s necessary to fly in new hires.
- Facilitating an acquisition
Until you’ve established your company’s in-country entity, the EOR will work on your behalf to comply with the local labour laws and regulations, and pay your employees.
- Avoiding non-compliant independent contractors
Hiring international contractors is an alternative and inexpensive option. However, your company is at risk for employment and tax violations, particularly misclassifying contractors as employees. The EOR can hire and process independent contractors in compliance with the local requirements to prevent penalties.
Selecting the right global EOR
When it comes to choosing the right EOR partner to help with your international expansion, go for a trusted provider you’re comfortable with and who’ll be transparent with you through the whole process.
You can ask your EOR provider for the following to ensure that they’re the right fit for your business:
- Do they operate in markets you need?
Look for an EOR with substantial experience working in different countries, especially in the place where you’re establishing your business. They should have an in-depth knowledge of local payroll, tax and immigration laws.
- Do they have experience working with a similar business in your industry?
You’ve done your research on what your business needs that requires the expertise of EOR. Choose an EOR who’s already familiar with your industry and how your business works. In addition, they should be able to adjust and customise solutions for your business.
- Are there additional costs aside from the service fee?
You should be comfortable asking this question to your chosen EOR provider to help you stay within your budget.
- Will there be a client account manager or single point of contact who’ll assist you with your needs?
Your chosen EOR should be quick to respond to your needs. They should also be able to provide support for teams in different time zones and languages.
- Do you have high-level data security?
Aside from asking about the quality of their data security, find out if they’re sharing data with third parties. In addition, find out if they have a centralised platform where you can access it to monitor work progress and collaborate with the projects.
CXC is a global EOR provider of contingent workforce solutions and payroll services. We have vast experience working in every country with expertise in local labour laws and requirements. We have a comprehensive support structure from employment solutions and onboarding to payroll services and risk & compliance.
CXC is a global HR outsourcing organisation with 30 years of experience in workforce management. Our innovative and cost-effective solutions help companies gain a competitive advantage by improving efficiency while reducing risks.
Contact CXC today to start enabling your future workforce.