How an ‘Employer of Record’ can be a hiring force multiplier


In recent decades, businesses have expanded their global presence through international hiring. The competition to attract the top global talent is fierce, while the process can be tedious and  complicated due to varying laws in offshore jurisdictions. A company looking to hire internationally while staying fully compliant can do so in one of two ways.  The traditional approach is to set up an offshore entity and take on the costs and liabilities of onboarding foreign employees. The other option is to work with an Employer of Record, or EOR, who facilitates global hiring without the costs and risks associated with setting up an offshore entity.

To successfully collaborate with EORs, employers must first understand their nature and the benefits that can be gained from this alliance. Of equal importance is knowing how to choose an EOR that best fits their needs.     

Understanding an EOR

An EOR is a third party organisation that assumes all legal employer-related responsibilities on your behalf, such as onboarding, payroll, and tax compliance for your workforce. While it takes on the role of human resources, you maintain control over the day-to-day operations of your employees, as well as their performance management and termination decisions.  

A global EOR enables companies to hire from anywhere in the world without having to set up an offshore entity, staying fully compliant in the process. It is legally responsible for setting up the local infrastructure and ensuring that banking, insurance, tax, and HR facilities are all dealt with. A global EOR maintains knowledge of, and compliance with, all labour laws in the foreign markets where your workforce resides. More specifically, here are some of the responsibilities EORs take off of employers:

  • Drafting locally compliant employment contracts
  • Onboarding local employees
  • Timely handling of payroll, benefits, and taxes
  • Supporting offshore employees’ employment needs
  • Safeguarding employers’ intellectual property
  • Ensuring compliance with relevant offshore labour laws
  • Handling terminations

What are the benefits of working with an EOR?

There are many advantages of using the services of an EOR, as it can support your global growth strategy. It is especially useful to employers who don’t have the resources or the knowledge to source talent from foreign markets in a compliant fashion.

  • Hire top talent from anywhere. Since global EORs maintain comprehensive knowledge of labour laws and regulations from different foreign markets, they enable you to hire the best talent from offshore markets without having to worry about compliance. They also provide continued support to your employees according to their local needs.
  • Explore new markets inexpensively. Your global expansion plans can be accelerated by employing an EOR, without a huge price tag. Instead of spending time and financial resources setting up an offshore entity to explore new markets, you can work with an EOR to quickly hire new workers, set up international teams, and reach new customers in foreign markets.
  • Guard against misclassification of independent contractors. When working with independent contractors from abroad, it is important to be aware of the distinction between permanent employees and contractors as prescribed by the local law where the worker resides. An EOR can help you prevent possible employment law and tax violations.

Choosing the right EOR

While every employer has particular needs, there are some typical considerations to make when choosing an EOR. Taking the time to do your research can help protect your organisation against any unexpected issues. When shortlisting EOR services, companies should keep the following in mind.

  • Entity permanence. Only when an EOR is a permanent entity in a country, can it be capable of providing comprehensive HR services, such as local invoicing.
  • Clear pricing. In order to stay within your workforce budget, you should look for EORs that have a clear pricing structure without any unexpected, hidden fees.
  • Experience and coverage. The right EOR would be well-versed (and physically present) in the markets you want to hire from, and know how to stay compliant.
  • Reliability. As they essentially manage your workforce, the EOR should be responsive to you and your employees’ local needs. A reliable point of contact must be established who can accommodate and support you when required. 

Tapping into overseas talent should be on every forward-looking employer’s mind today, and they must not overlook compliance in the process. EORs can help accelerate your global hiring plans, without the hassle of researching foreign markets or getting bogged down in complex offshore laws, so you can focus on getting more work done. Ready to start building your remote, international team with Bettersource? Get started here.