How to choose an Employer of Record

August 29, 2023
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Are you wondering if an Employer of Record is the magic solution you need for your international workforce? Let's journey together through this guide, where we'll help you figure out if an EOR is truly what your business needs. We'll delve into the upsides and challenges of utilizing an EOR, and provide tips on how to pinpoint the best global EOR partner, that aligns with your business objectives. Buckle up, and let's dive in!

Why should you use an Employer of Record?

An Employer of Record (EOR) is your genie in the bottle when it comes to global hiring! They are a global employment organization that steps into your shoes to legally hire, compensate, and oversee your international employees. Imagine entering new markets without the worry of navigating the maze of different tax requirements and HR tasks. That's what an EOR does.

They take the reins on international growth, manage risk, and guarantee compliance with local labor laws. Ever found a superstar candidate but could not hire them due to their location? An EOR solves this problem, enabling you to hire the best talent worldwide.

Data Deconstructed

  • According to Mercer's Global Talent Trends Study, 71% of companies are focusing on international expansion, making EOR services a critical part of their strategy.
  • According to an EY report, using an EOR can reduce the time to establish operations in a new country from 12–18 months to just 3–4 weeks.

When do you need an Employer of Record Services?

Say you've just discovered the perfect software developer for your next big project. There's a slight hitch though — they're based in the Philippines and you're not quite sure how to navigate the local labor laws, taxes, and employment nuances. That's where EOR services come to your rescue! By taking on the role of the legal employer, an EOR handles all the complexities, ensuring that you can focus on what you do best — growing your business!

Now, Ready to embark on your EOR selection journey? Start by posing some simple yet vital questions. Not only will these queries aid in discovering potential EORs, but they will also facilitate a cost-effective comparison to find the one that best fits your needs. Let's get the ball rolling!

Partner Evaluation and Services:

Does the EOR understand your target countries?

Indeed, understanding your target countries is a crucial first step. An EOR should possess a solid understanding of the local labor laws, tax legislation and customs within the countries you wish to expand to. So, ask yourself: Does the EOR have a strong presence in those countries? Do they have local legal experts on their team?

If they do, that's a good sign. After all, you want to avoid any legal landmines and cultural faux pas, right? Having an EOR that truly knows the lay of the land can help you dodge such pitfalls.

Does the EOR operate where you're hiring?

Geographical coverage is a non-negotiable when choosing your EOR partner. Why? Because to hire your dream team in multiple countries, you need an EOR company that operates in those very locations!

So, make sure your prospective EOR has an established local entity or at least a solid partnership in the countries where you want to expand. It's like setting up your chess pieces correctly before making a move—strategic and efficient. Remember, the right EOR should make your global expansion a breeze, not a maze!

Does the EOR offer additional workforce solutions?

When selecting an EOR, consider their additional services beyond payroll and compliance. Do they provide employee engagement solutions such as relocation assistance or learning and development programs? Also, do they offer other HR support like legal advice or IT solutions? These value-added services can be a huge plus for your business!

What's crucial in a reliable EOR?

When pinning down a trustworthy EOR, remember that their strength lies in their expertise, experience, and extensive service offering. You want an EOR that's well-versed in local labor laws, operates in your target countries, and offers more than just the bare bones.

Transparency and Support:

Is EOR pricing transparent?

A key factor when selecting an EOR is pricing transparency. It's like choosing a restaurant—you want to see the prices before you order, right? The same goes for your EOR. There should be no hidden costs or surprise charges. Look for the only EOR provider that provides clear, upfront pricing for its services.

After all, 53% of SMEs rely on EORs for managing their global workforce, so you need an EOR partner you can trust with your wad of cash!

How supportive is the EOR?

A good EOR is like a trusty sidekick - always there when you need them! So ask, how responsive are they? Do they provide 24/7 support? Remember, you're in different time zones, and you don't want to be left hanging for a response! You need an EOR that's on the ball, giving you peace of mind knowing that your international operations are in good hands. After all, we're talking about your business and your brand reputation on the global stage!

Will the EOR be responsive as a client?

Imagine having a partner who listens, understands, and acts promptly! It's like a relay race, where both you and your EOR are sprinting towards the same finish line - your business success! Surprisingly, only 35% of businesses have managed to find such a responsive EOR.

Track Record and Expertise:

Can the EOR prove success?

Just like in a job interview, you wouldn't hire someone without checking their references, right? The same goes for your EOR. Ask for their success stories, case studies, and client testimonials. 51% of businesses vouch for the effectiveness of an EOR based on their proven track record.

What are EOR agreement terms and termination?

Just like any business agreement, understanding the terms of your contract with an EOR is pivotal. What does their contract entail? What are their termination terms? Avoid falling into this trap! Ensure you're well-versed with the agreement terms—after all, it's all about securing a beneficial partnership for your global business ambitions, isn't it?

Employment Details:

Is legal employment ensured?

Ensuring legal employment is a must, and your chosen EOR should be able to confidently tick that box. We're talking about full compliance with local labor laws, proper employment contracts, statutory benefits and all the nitty-gritty paperwork neatly sorted.

Is EOR the direct employer?

Remember, your EOR should be the direct employer of your overseas workforce. They're the ones who handle all the legal, HR, and administrative aspects of employment, meaning you can focus on your core business.

How does the employment contract function?

Understanding the workings of an employment contract is critical. Who drafts it? Who signs it? The answer is your EOR. They're the ones who create and sign the contracts by local labor laws, ensuring everything is legit—no loopholes, no missteps.

What are EOR's employment models?

Does the EOR provide full-time or part-time employment? Do they pay employees or do they cater to independent contractors? Your business needs might vary and having an EOR that offers flexibility is a jackpot! An ideal EOR should accommodate your unique needs while ensuring compliance with local employment laws.

Data Management and Security:

How's payroll data managed?

When it comes to managing payroll data, an EOR should have a failproof system in place that ensures absolute accuracy and confidentiality. Ask how they handle and store sensitive payroll data. Do they use cloud-based platforms? How secure is their data management system from potential breaches?

How is data stored securely?

Ensuring that your sensitive data is stored securely is non-negotiable. You don't want your payroll data lying around, do you? So ask them straight up, how they secure data. Do they use encryption? Firewall protection, perhaps?

Any data sharing with third parties?

Sharing your data with third parties can feel a bit like handing over the keys to your house. It's critical to clarify whether your EOR shares any data, especially sensitive ones, with third parties. If they do, what measures do they take to ensure that this information is handled securely and responsibly?

Employer of Record Benefits:

What are the EOR Benefits?

Choosing the right EOR can be a game-changer for your whole global team and expansion plans! They bring a whole host of benefits to the table.

  • Saves time and resources: No need to set up your local legal entity, the EOR takes care of all the legal and administrative details. They're like the backstage crew of your global operations!
  • Easy compliance: Navigating through local labor laws can be like walking through a minefield! An EOR ensures full compliance with local regulations, so you don't have to worry about stepping on any legal landmines.
  • Risk management: With an EOR, you have a safety net protecting your business from potential legal and financial pitfalls. It's like having a seasoned guide while hiking in unfamiliar territory!
  • Employee benefits: EORs can provide a comprehensive benefits package to your overseas employees, helping you attract and retain top talent. It's like offering a gourmet meal in a world of fast food options!

EOR for specific business needs?

You've got unique business needs, right? And that's why it's crucial to choose an EOR that aligns perfectly with them. Remember, it's not a one-size-fits-all game; we're talking about your global expansion dreams here! You need an EOR that offers tailored solutions—be it full-time, part-time, or gig workers—while ensuring 100% compliance with local laws and employment agreements.

EOR for safe international hires?

Choosing an EOR is much like choosing a safety net for your international hiring. It's all about having the right support when you're hiring internationally across borders. Think of it this way: Would you hire a babysitter without doing a background check? Of course not! It's the same with your EOR. They're your safeguard against any legal hiccups, ensuring your overseas hires are 100% legit. Remember, we're talking about your brand reputation and the future of your business here, so choose wisely!

EOR's role in legal compliance?

Remember, your EOR is like your legal eagle when it comes to local labor laws and compliance. They're the ones who've got their eyes on the nitty-gritty of it all—contracts, taxes, benefits, you name it. With a whopping 100% of businesses citing compliance as a top reason for using an EOR, it's clear that they're the experts at keeping you on the right side of the law. So, when you're considering how to choose an employer of record, make sure they've got a stellar track record in this area.

Localized benefit packages by EOR?

An EOR can provide you with a localized benefit package for your overseas employees that meets the local standards. With their expert knowledge, they can advise on the best course of action to ensure your workforce has access to benefits like health insurance and pension plans without breaking any labor laws. This is especially important if you're looking to make a good impression in international markets!

EOR's role in IP protection?

Your EOR also plays a crucial role in protecting your Intellectual Property (IP). When you hire overseas, you want to ensure your business secrets stay secret, right? That's where your EOR comes in. They'll have mechanisms in place to ensure your IP doesn't land in the wrong hands, safeguarding your business's most valuable assets. So when you're figuring out how to choose an employer of record, remember to ask them about their IP protection strategies!

What makes an employer of record different from a Staffing agency?

While an EOR and a staffing agency might seem like the same thing, they have different roles. An EOR handles both HR and administrative tasks for your overseas employees, and global payroll, while a staffing agency focuses on recruitment.

A staffing agency will typically process candidates and send them to you to make the hire—it's then up to you to handle the international employment aspect of things. An EOR, on the other hand, takes care of everything—they become the global employer and handle all aspects of employment from start to finish. While staffing agencies can be helpful in certain cases, if you're looking to hire overseas then an EOR is a must-have!

How is the Employer of Record different from than Professional Employer Organization?

While an EOR and a Professional Employer Organization (PEO) might look similar, there are several key differences. First off, an EOR is typically only used when hiring international employees, while a PEO can be used to manage and hire employees in both domestic and international markets.

An EOR also primarily focuses on the administrative aspects of employment—they're essentially your HR and payroll department when it comes to overseas hires—while a PEO typically specializes in managing the employee benefits side of things. Ultimately, both an EOR and PEO can be useful in their ways; the key is understanding which one can best meet your business's needs!

What's the difference between EOR, BPO and Staffing Agency?

Think of an EOR as your HR and payroll guru for your international hires - they've got you covered from A to Z. A BPO, on the other hand, is like outsourcing an entire business' hiring process - they're your go-to guys when you want to focus on the core functions of your business. And a Staffing Agency? They're the matchmakers of the job world, helping you find the perfect candidates for your team. But remember, they won't handle the nitty-gritty of employment like an EOR does. So, pick your player wisely!

What is the best employer of record in the Philippines?

When it comes to the best Employer of Record (EOR) in the Philippines, Remotify stands above the rest. With their deep understanding of local labor laws, extensive geographical coverage, and tailored services that align with various business needs, Remotify is an outstanding choice for businesses seeking efficient and reliable EOR services in the Philippines.

Not only do they provide comprehensive HR and administrative services, but they also ensure stringent data management and security, protecting your company's sensitive information. Additionally, Remotify offers localized benefit packages to employees, ensuring that your workforce is well taken care of. Therefore, if you're considering international expansion or hiring remote employees in the Philippines, Remotify is undoubtedly a top choice to consider.

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