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Employer of Record 101: Decoded

Industry Resources & Trends
CXC Global4 Lectura rápida
CXC GlobalApril 28, 2023
CXC Global

Let’s face it. It takes a lot to manage a business these days.

There are talks about an upcoming recession. Big companies are conducting massive layoffs. In contrast, there is also a perceived talent shortage in Asia.

At the rate that things are changing, it’s hard to keep up. Businesses need to be flexible and agile to handle evolving market needs and unstable conditions—and a global workforce with top-tier talent can make this happen.

Of course, employers have so many business functions to work on including marketing, operations, and finance. Managing human resources is a necessity that is more complicated than it sounds.

Here’s where having an Employer of Record (EOR) comes in.

But first things first…

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is an entity that is basically the legal employer of your workforce or manpower in other countries. They take charge of additional human resources department functions like payroll, tax compliance, benefits, and other administrative tasks. 

Other than these tasks, they have no further involvement in the company. Your remote workforce still reports to your management team.

Here’s an illustration: your business is based in Singapore, and you are planning to hire a few people from Indonesia. 

Establishing a company in a different country is arduous—not to mention very costly. 

With an EOR partner like CXC Global, you no longer need to go through the tedious process of setting up an entity in Indonesia. Instead, you work with the EOR and they will manage all the paperwork and employment requirements on behalf of the business. 

How does an EOR contribute to your business?

Recruiting: An EOR equips you with a global pool of top talent

The COVID-19 pandemic helped a lot of companies realize that work can be done even without physical offices.

Data from LinkedIn shows that in February 2020, 1.4% of applicants applied exclusively to remote jobs. Fast forward to February 2022, the number shot up to 24.6%. At the same time, the data also showed that there are now more job postings offering remote work in Australia, India, and Singapore compared to previous years. 

What does this mean? 

More companies are now looking to hire from other countries if it means getting the best talent with the right set of skills. Additionally, interest in remote work is increasing among individuals. 

An EOR will handle the recruitment and hiring so companies don’t have to figure things out on their own. They already have access to a global pool and a streamlined process that is already in line with different countries.

Managing: An EOR handles day-to-day administrative tasks so you can focus on growing

Companies can experience the benefits of working with their global team without worrying about payroll, benefits, and international tax issues. 

An EOR will handle all administrative tasks like:

  • Employment contracts and terms of the agreement
  • Onboarding full-time or part-time employees
  • Filing taxes in respective countries
  • Processing of payroll 
  • Remittance of salaries and reimbursements
  • Providing health benefits and insurance
  • Offboarding employees when the contract ends
  • Ensure that the company adheres to the country’s local laws and regulations

In short, it’s like having an extension of your team that already knows what they’re doing. 

Scaling: An EOR helps you explore new markets without huge risks

It’s not easy to expand a business in another country. Aside from conducting market research and feasibility studies, the whole process requires a lot of planning and resources.

With an EOR, you can test the waters in a new country before setting up your own local entity. 

So let’s say your main company is in Singapore, but you’ve started receiving some potential leads in Indonesia. Instead of going all out and establishing an entity, you can hire a couple of Indonesian team members first through the help of an EOR. Less cost, less risk, and you can start doing business right away.


Planning: An EOR prepares you for the uncertain future

In 2022, 16% of the companies in the world are operating 100% remotely. In the post-COVID world, remote working will still very much be a standard for companies who do not want to skimp on talent.

However, the economy does remain volatile and turbulent. This is already a given. This is why partnering with an EOR is a practical move to future-proof your business. 

With an EOR partner, you can continue to enter and grow in different markets since you will have a reliable partner that handles everything from compliance to hiring. They also have a deep understanding of the market conditions in specific countries and will be able to provide objective advice on how to move forward.

Despite threats of inflation, recession, and instability, a global team with the right mindset can push your company forward and thrive in the midst of ever-changing market conditions. An EOR will help you attain this stable team so you can focus on moving forward with your goals.

Is an EOR right for you?

Many companies are looking to expand internationally without knowing how to start. Some businesses are in search of top talent to recruit and be part of their growing team. Meanwhile, other companies just do not have the luxury of time to study laws and handle their remote employees.

If this sounds like you, then an Employer of Record service will definitely benefit you. CXC Global, for example, already has a streamlined and fast-tracked process that helps businesses get a foot in the door right away.

Whether it’s recruitment, payroll services, or expansion, CXS Global can make the experience easier and seamless for you. Reach out to CXC today and make it Day 1 of your international expansion.


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About CXC


En CXC, nuestro objetivo es el de ayudarte a ampliar tus negocios con soluciones flexibles y talentos tercerizados. Sin embargo, también entendemos que administrar una fuerza laboral contingente puede ser una tarea compleja, costosa y lenta. Mediante nuestra solución MSP, podemos ayudarte a que cumpla con todas tus necesidades de contratación, incluyendo empleados temporales, contratistas independientes y Trabajadores SOW. ¿Y si se cambian a tus necesidades? No hay problemas. Somos flexibles. Nuestra solución está diseñada para aumentar o reducir la escala para adaptarnos a las necesidades de nuestros clientes.

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