An Employer of Record (EOR) allows companies to legally hire talent from around the world without having to set up local entities. EORs handle all employer responsibilities and compliance in foreign locations, enabling clients to access skilled workers globally.
The key advantage of using an EOR is tapping into the global talent pool to find candidates with the optimal blend of skills and cost-effectiveness for a role. Rather than getting distracted by the legal mechanisms involved, companies should focus on leveraging EORs to source qualified, competitively-priced talent internationally.
By serving as the official overseas employer, EORs allow clients to concentrate on managing the worker’s day-to-day output while the EOR handles payroll, benefits, taxes, and compliance. This simplifies global hiring so clients can acquire top worldwide talent.
What does an EOR do?
Legal Employer Responsibilities: An EOR becomes the legal employer for your international hires, handling all the local labor law compliance and administrative responsibilities.This allows your company to employ a global workforce without the complexity of setting up local entities.
Global Talent Acquisition: They facilitate the hiring of employees from different parts of the world, managing the entire employment lifecycle.Your company will have access to talent, with no legal barriers, from worldwide that fits both your skills and your budget. In addition, some EOR provider possess their own talent pools and can introduce you to the right person for your company's needs.
Payroll and Tax Administration: EORs manage payroll processing, tax withholdings, and reporting for employees in their respective countries.This service ensures that your employees are paid on time and all tax obligations are met according to local laws.
Benefits Management: They handle the provision of statutory and supplementary employee benefits.EORs can negotiate better rates for benefits due to their scale, which can be passed on to your employees.
Compliance and Risk Mitigation: EORs stay current with changes in employment laws to mitigate risks associated with non-compliance.Your company is protected from potential legal and financial penalties.
Benefits of an employer of record
Here are several handy benefits that come with using an Employer of Record:
Time-Saving
EORs streamline the tedious process of hiring and paying workers by handling all administrative HR duties. This frees up significant time for business leaders to focus on core operations, strategic planning, and activities where they add the most value. With an EOR managing employment complexities, companies can allocate more resources towards innovation, improving products and services, and activities that drive growth.
Money Saving
Partnering with an Employer of Record (EOR) gives you access to top global talent, without the huge price tag. Rather than being limited by local high salary expectations, you can source qualified candidates from overseas markets at a fraction of the price. With the EOR handling all the complex legal paperwork and compliance, tapping into this international talent pool is seamless and affordable.
Global Growth
EORs assist companies in expanding and bringing on staff in new countries without wrestling with tricky regulations. They understand employment laws in your target regions and guide you in following them properly as you scale globally. EORs enable smooth international growth by hiring local teams abroad while ensuring full compliance.
Workforce Flexibility
EORs make it straightforward to take on more staff when workloads increase and let go of people when not as busy. They provide the mechanisms to easily ramp up or downsize your team without hassles managing layoffs. This workforce flexibility allows reacting to market conditions and matching labor costs to revenue.
Faster Market Entry
With an EOR speeding up the hiring process, you can start doing business in a new area right away, with no delays. For quick global setup and start, they help you figure out how to work with local job laws. EORs make it easier to get into a market quickly by letting local teams quickly come together abroad.
Worker Benefits Handling
EORs handle critical items like health plans and retirement accounts for your people across different countries. They ensure everyone receives needed benefits, adhering to regional standards and regulations. For global teams, EORs smoothly manage localized benefit administration.
Administrative Backup
EORs assist with the daily tasks of overseeing personnel, like managing HR duties, payroll, and general workforce oversight. They provide helpful administrative support so leaders can focus more on business strategy and operations than personnel logistics. EORs are reliable assistants taking care of critical back-office duties.
Owned Talent Pool Access
Some EORs stand out by providing access to their own talent pools across multiple countries. This allows clients to obtain on-demand, global recruitment sources to staff their projects at competitive prices, without traditional recruitment legwork or overseas setup costs.
Difference Between Vertical and Horizontal EOR
Vertical EORs
Countries : Limited number of countries, but mainly single country
Services : Contract, Payroll, Talent Introduction, Workspace, HR management support
Candidate : Candidate could be introduced by some EOR service provider.
Horizontal EORs
Countries : Over 100 counties.
Services : Contract, Payroll. Some EORs have HR SaaS.
Candidate : The company can find a skilled candidate by him/herself.
Ways to choose the right EOR solution for your company
Picking the right Employer of Record (EOR) for your company matters. Here are some straightforward tips to help you:
Know What You Need: Figure out what tasks you require assistance with. Do you want support with payroll, taxes, or other employment stuff? Understanding your needs will guide you to the correct EOR.
Understand the Costs: Make sure you grasp what fees will be involved. Different EORs may charge differently. Inquire about surprise charges to avoid shocks later.
Assess EOR Reach: Vertical EORs excel in a limited country, offering more functions such as talent introduction, while Horizontal EORs enable hiring across over 100 countries, perfect for diverse global needs.
Characterize EORs by talent: Vertical EORs match cost-effective talent with comprehensive HR support, whereas Horizontal EORs enable to hiring of top-tier talent from everywhere.
Choose your talent strategy: With Vertical EORs, receive tailored talent matching and workspace services, while Horizontal EORs provide self-service talent sourcing with optional HR SaaS tools.
Consider security needs: If high-level security is vital, Vertical EORs are preferable as they offer secure workspaces, while Horizontal EORs, typically WFH-based, totally depend on the talent’s environment.
Cutting Costs and Simplifying HR?
Using an Employer of Record (EOR) makes good financial sense for many companies. EORs simplify human resources operations by handling payroll, taxes, compliance, and more. This saves companies time and money compared to managing it all in-house.
EORs open up access to affordable talent pools from worldwide. By letting an EOR legally employ staff in countries with lower wages, businesses can reduce labor costs. This combination of slashed HR overhead and lower compensation expenses adds up to serious savings. Companies can get substantial value from an EOR’s specialized capabilities and wide.
How strong a security privacy environment do you require for the EOR remote talent?
If your company needs to ensure high security and privacy when hiring remote workers, a vertical EOR is a better choice.
Horizontal EORs allow employees to work from home. This means company data can end up on personal networks with unknown levels of cybersecurity. For businesses that handle sensitive information, this risk may be too great. In contrast, vertical EORs can provide secure office spaces and connections for your remote team members. This means giving them access to workspaces with enterprise-grade network security and controlled privacy infrastructure. Sensitive company information stays protected.
While working from home is more flexible, for some companies’ data security has to come first. Since horizontal EORs can't guarantee that same level of security through home setups, they would not satisfy a strong privacy requirement. Vertical EORs allow much greater control and clarity into security measures.
Need to be introduced remote talents from EOR service providers?
When companies source job candidates independently but require an Employer of Record (EOR) to handle compliance and payroll, a horizontal EOR fits the need. However, for undefined open positions without pre-sourced applicants, vertical EORs become an option through their talent pool access. When clients convey general open job descriptions for these functions without identified candidates, the vertical EOR can source matched applicants from their niche talent ecosystems to fill positions rapidly.
It is vital to give these pre-matched individuals a solid understanding of the hiring company’s culture, values, and objectives even if working remotely. Providing new hires company guidelines and documentation grounds them in processes while introductory calls with key team members establish relationships.
What are the alternatives to an EOR?
If a company decides not to tap into an Employee of Record (EOR), there are other options out there for organizing its workforce. One common plan is to handle all the ins and outs of employing people in-house. This means the business itself deals with bringing on staff, processing payroll, supplying benefits, and following employment rules and will arrange all the money and additional costs himself. Another choice is to connect with independent contractors or freelancers for certain projects. This lowers the company's admin work around hiring. However, this path can have limits in terms of boss-level control and long-term loyalty from workers.
Additionally, some organizations go with Professional Employer Organizations (PEOs) that share the role of being the employer. They provide help with HR issues, benefits, payroll, and more, while the client firm maintains the leadership around day-to-day operations and business decision-making. Every approach has its own pros and cons. The best pick comes down to the specific priorities and preferences of each unique company.
PLUS TALENT EOR services
PLUS TALENT fits into the vertical EOR described above, offering unparalleled access to global talent and enabling businesses to scale effortlessly across Asia, Africa, and South America. With our comprehensive services, we make global expansion simple, compliant, and cost-effective.
Specialized Talent Pool
PLUS TALENT has curated a vast talent pool from developing countries, offering businesses access to high-skill and mid-skill engineers at competitive rates. Unlike other providers focused on single-country solutions, our multi-continent reach ensures you find the right talent for every need.
Multi-Continent Network
Our unmatched network across developing markets allows for streamlined business expansion and compliant employment. With PLUS TALENT, you can easily navigate the complexities of hiring and managing a global workforce.
Centralized HR and Compliance
Benefit from our centralized HR, payroll, compliance, benefits, facilities, and IT platforms. Regardless of the hiring location, we provide a consistent and secure experience, ensuring your operations run smoothly.
Proprietary Talent Pools
With one of the largest proprietary talent pools in each of our operating countries, composed of security-vetted individuals, PLUS TALENT offers unparalleled access to top-tier global talent.
Workforce Transformation
As the undisputed leader in multi-country vertical EOR services, we empower businesses to build game-changing remote tech and non-tech teams, transforming your workforce and propelling your operations to new heights.
Choose PLUS TALENT for unmatched multi-region EOR services that elevate your access to premier workspaces and the largest global talent pools. Request a consultation with our vertical EOR specialists today for custom strategic staffing guidance and exclusive access to multi-country tech and non-tech talent.
