Every company, regardless of its size, dreams of increasing its global presence at the right time. Building a global team is the most effective is way to enter new geographical markets and industries, and a global Employer of Record (EOR) can assist you in this endeavor.
An EOR is a third party organization that specializes in handling all the legal and operational requirements of building a global workforce for its client companies. Thus, traditional employment responsibilities like management of payroll and taxation, employee benefits, and other such administrative and legal obligations are undertaken by the EOR.
Consider a global EOR as your multinational HR staff that is familiar with the intricate payroll rules and labor laws of the many countries where your personnel is situated. The benefits they provide are crucial for any multinational organization to achieve their growth and scalability goals.
6 reasons to engage an EOR today
No longer restricted by geographical barriers, companies today are ready to dive into the pool of global talent. However, hiring outside your home country comes within certain pre requisites.
Most businesses partner with an EOR in order to create a successful worldwide workforce without having to deal with the trouble of setting up offices abroad. An EOR offers the crucial flexibility required for growing an ideal international team.
Here’s how~
Ease of global expansion with an EOR
Establishing a local company through incorporation and registration in a new country can be highly time-consuming, expensive, and compliance-riddled.
An EOR solves this problem by managing the employer’s payroll, employment, and immigration needs in the host nation. Through its network and experience, the EOR acts as a liaison between the client-company and potential employees, also assisting in ensuring compliance.
Thus, engaging an EOR is highly beneficial for companies that want to access new geographies without the permanence of setting up a corporation.
Remote-first operations
According to studies, as many as 70% of companies are considering becoming hybrid or remote-first organizations, enabling both current and prospective workers to work remotely. However, managing teams remotely is a very complicated process that must take into account a variety of factors, including the labor laws in each nation and potential inexperience.
Your business will be able to test this strategy out with no restrictions on team strength, thanks to an EOR. This would lead to a smoother transition that would be better prepared, as well as significant time and money savings.
Better compliance across multiple countries
Every country has its own set of employment and taxation laws, non compliance with which can result in hefty fines and penalties. Thanks to presence across multiple countries, global EORs are able to undertake the fulfillment of all these regulatory and legal requirements on behalf of their clients and ensure smooth functioning.
Limited risks
All employment agreements are executed between the Employer of Record (EOR) and the employee, therefore managing benefits, claims, employee remuneration, and termination are under the legal purview of the EOR. Additionally, the EOR manages work license application and renewal adherence if you are recruiting foreigners, making it even simpler for your business.
Easy payroll management
For the purpose of taxation and management of foreign exchange, most countries mandate that salaries to local residents be disbursed from bank accounts within the host country. Additionally, management of payroll also requires the factoring in of taxation and employee benefits, which vary for every country. The EOR undertakes end to end payroll management to free you from these tasks.
Access to global talent
One of the biggest advantages of partnering with an EOR is the ability to hire across country borders. By undertaking the end to end management of all hiring responsibilities, a global EOR enables you to build your distributed team without having to invest a major chunk of time and capital into registering and operating a local entity. Companies can take advantage of the competitive cost of hiring and the wide range of talent present across the countless emerging talent hubs throughout the globe by partnering with EORs.
Employers of Record are becoming an important resource for firms looking to hire personnel internationally. It offers a hassle-free hiring, onboarding, and working experience for a firm. Companies are reaching their scalability and expanding goals more quickly than before.
If you are planning to expand business operations internationally, an EOR can help you deploy services quickly without risking non-compliance with local laws. Our team of experts at Talent500 can help you with this. Set up a consultation here.
