Finding a Reliable Employer of Record Services
As the question of the worker’s location, for the most part, is hardly a crucial point for hiring nowadays, companies are prone to hunt the top candidates overseas. According to Forbes statistics summary, more than 97% of correspondents stated their desire to continue working remotely, and 74% of professionals expect that remote work will become normalized. Such data unties the hands of the businesses for scaling up globally by hiring professionals remotely.
However, hiring an expert residing in another country or building a dedicated team is not a child’s play. It’s no exaggeration to state that the chance for any business to expand internationally without the help of EOR services is close to nil. In this article, we will discuss what employer of record services can bring to the table and where to find a reliable services provider.
First of All, What Is EOR, or Employer of Record?
To put it simply, an employer of record services (EOR) provider is a professional employer organization that takes on its shoulders the hassle with legal turmoil, such as taxation, visa processes, insurance, as well as further administrative issues (from onboarding to benefits packages).
Employer of record companies help enterprises and start-ups to set up the business overseas and have a smooth drive. According to the 2019 CFO Research’s Survey, the majority of respondents (over 94%) agreed that engaging with trusted EOR in the outsourcing plan lessens the hardships intertwined with local tax and labor laws.
Apparently, fast-paced business life does not allow enough time to dive into the nitty-gritty of logistics and legal paperwork for the outsourced team, not to mention a few specialists. With a business process outsourcing (BPO) services provider, the company can get access to a broader talent pool without a need to study in-depth the overseas employee relationships. But it is worth keeping in mind that EOR services don’t include finding an independent IT contractor.
Employer of record usually is an external agency that handles part of BPO services, particularly human resources related issues regarding global remote personnel. These issues include but are not limited to:
- Payroll management within the state;
- Compliance with local tax rules (file & deposit) of the country where the EOR company is located;
- Handling employment contracts, background checks, onboarding, and termination processes, as well as employee’s compensation;
- Arranging visas and work permits for employees,
- Ensuring the working process is organized under local labor laws;
- Processing medical insurance and other benefits for workers (day-offs, bonuses, and more).
On the other hand, here are the services not included in EOR solutions:
- Quality control of employees’ work, their promotion;
- Decisions regarding contract termination, compensation, except for legal document processing;
- Project management.
EOR vs PEO vs GEO: What’s the Difference?
When seeing EOR, PEO, GEO, and other abbreviations, it’s easy to get confused, especially given the subtle difference among them. EOR functions are specific and legally differ from PEO, GEO, and Recruiting Agency. Knowing these differences will help businesses to diminish any possible tax and law mistakes.
The Professional Employment Organization (PEO) model, most popular in the US where the laws differ from state to state, allows leaving more control in the business hands. PEO basically offers services with local laws and regulations, but the business remains a main employer for the contractors. PEO has limited services and doesn’t solve the need to open affiliates overseas.
EOR is more a legal representative of the company on the ground: employer of record payroll services, contract management, insurance, and more. EOR is a perfect choice both for large-scale enterprises that seek new markets and start-ups that aspire to build a global remote team. Finding a trustworthy EOR agency will help you solve a number of HR-related issues and forget about mundane documentation.
Employer of record (EOR) shouldn’t be mistaken for a recruiting agency. While a staffing agency helps to find a proper candidate to fill in the vacancy for an IT company, EOR handles legal matters of tax and labor documentation. Staffing agencies’ services are limited to screening CVs, finding eligible candidates, and appointing interviews.
GEO, or global employer of record, is close in functions to the employment of record, but the main difference is the ability to hire employees from various foreign countries. GEO will handle HR operations and control compliance with local laws, giving businesses an opportunity to find a contractor with no limit to the country of origin. It opens a wider choice of talents and better possibilities to grow.
The following table will help you to get a better picture of each service’s nuances:
5 Instances When EOR May Come in Hand for Business
EOR significantly simplifies business processes when hiring in another country, covers all local legal and tax issues, and plays the role of representative of interests of the client in front of authorities. However, not all the companies that hire outsourced teams require the employer of record company services specifically. Let’s discuss some of the cases when an employer of record brings the utmost benefit to a company:
- The company intends to scale up globally. When a business potential is high, it’s only a matter of time when the company decides to expand internationally. In this case, a smart move is to select a new promising market and create a team on a local level to ensure the natural development of the business there. EOR company will help businesses legally organize and manage remote workers.
- A company needs compliance assurance when hiring in a foreign country. Working in a foreign country is a real challenge. The newcomer business has to dig deep to dodge any risks of breaking labor laws and regulations in the country. In this case, EOR will be an irreplaceable partner that can help to move confidently on the unknown territory.
- The company wants to reduce misclassification risks or compliance. When a company enters a global market, it’s usually followed by many legitimate concerns, such as failing to comply with local laws, overseeing some real pitfalls on the market, and struggling along the way. Working in partnership with an employer of record significantly lessens the possibility of falling into the trap and ensures that the business runs fully legally.
- The company lacks in-house HR resources for research and operations. Working in accordance with international labor laws requires additional research and operations in-house, for which not every company has adequate resources. That’s why it’s beneficial to call for EOR services help. Employer of record is a perfect way to fill in the lack of in-house experts to handle various documentations, contracts, onboarding, and taxation.
- The company doesn’t need a local affiliate but wants to hire full-time workers from another country. Not all companies have the capacity or desire to open a subsidiary when going internationally. Some need to expand their team with a professional but sources on a global talent market. In this case, EOR will help a company sign up contracts with workers, handle the onboarding, tax-related documentation, and solve many administrative questions.
3 Ways How EOR Services Can Benefit the Business
There are various ways the employer or record can bring benefit to a company. Here are the main ones:
- Diminishing compliance errors. As we already mentioned, the company that goes to a new market is always facing the risk of unintentionally breaking some employment regulations of the country. The side effects of this can bring a whole lot of trouble to a company. Learning all the nuances of the new country regulations usually simply is not worth it. It’s much quicker and easier to get help from a reliable EOR agency. In this way, you can hire outsourced specialists with no risk, as all legal matters will be managed by EOR that is used to work permits and local laws specifics like a duck to water.
- Preservation of core business resources. It’s smart to leverage additional services, such as EOR, for hiring abroad. The employer of record company obtains an established expert team that can help cut off the time and efforts spent on recruiting and onboarding process. Using these services can help businesses to concentrate on core business tasks. Such a shift of duties to a third party can also be a money-saving decision: companies can cut down expenditures without the need to hire a full-time recruiter or care about HR department training on local legal matters.
- Quicker and smoother onboarding process. Besides all the documentation turmoil, the employer of record organization can help new employees to get accustomed to a working environment and ensure the long-term relationship with new workers. Employer of record service helps not only to manage a contract with an employee but also to close any cultural disparity and make the employee feel safe at a workplace, increasing their productivity and loyalty.
To sum up, EOR services can help to keep the company’s feet firmly on the foreign ground. Employer of record takes care of selecting candidates, creating and maintaining contracts with workers that fully comply with local laws, handling payroll and other benefits.
Mobilunity as Your Reliable Employer of Record Company
It’s a no-brainer that business intentions to move to international markets always have several reasons. The most alluring one is to fill the vacancies with top specialists for a lower budget. Ukraine proved to be a preferred destination for finding high-end IT experts for affordable rates, and there are reliable companies, such as Mobilunity, that can help you with hiring, local tax management, and onboarding.
If you consider expanding your business to Ukraine and need a reliable partner to handle the hiring process for you, Mobilunity is a trustworthy company to opt for. Mobilunity is a Ukrainian IT company with decade-long expertise in providing dedicated development teams for businesses of any size and industry specifics. Our clients note our dedicated approach and top-notch services, including employer of record solutions on demand.
Should you need a reliable vendor providing EOR services, reach out to Mobilunity representatives, and let us help you to build your dream team!