What is an Employer of record (EOR)?
An Employer of Record otherwise known as EOR is an external party that takes care of onboarding one or more full-time employees on behalf of your organization. With EOR, you can hire, manage and pay employees on a global scale easily.
The best part is, EOR allows you to expand your global team seamlessly on a legal basis, all without a local entity.
What Does an Employer of Record Do?
Building a remote team is quite common these days. When you create a remote team for your business, geographical boundaries are not a barrier anymore and you have access to the global pool at large.
Yes, you can hire talented international employees who can cater to your organizational needs rightly. This way, you also get ample chances to penetrate new markets that lead to business growth.
But, the problem here is, every country has different laws and tax structures. And yes, these parameters often change from time to time without any warning.
To hire global employees on a full-time basis, you need to make sure that your organization complies with all the social norms in place.
But, how do you do that?
Taking the help of a trusted Employer of Record is the simplest solution.
An Employer on Record can take care of everything while you just sit back, relax and add more overseas employees to strengthen your business network.
The Employer of Record handles employee onboarding, record maintenance, payroll, tax filing, commissions, health insurance and other employee benefits in an efficient way on behalf of your organization.
A global employer of record (EOR) is a third-party service that enables small, medium, and enterprise-level businesses to easily onboard, manage, and pay international employees. It can handle everything from legal compliance to payroll processing for your employees working in different countries.
EOR Vs PEO
An Employer of Record is quite similar to a Professional Employer Organization also known as PEO in short. PEOs are co-employment organizations. Yes, PEOs work with companies and handle partial employee management activities in collaboration with the same.
So, when your company associates with a PEO to manage employees, it is more of a shared responsibility where you have to squeeze time to work with the service provider hand in hand in every step of the way.
On the contrary, an EOR manages everything from legal liabilities to social taxes so that you need not break a sweat.
Be it hiring ten people from one foreign country or ten people from ten different countries, an EOR can get it done for you in a seamless way.
Given the scenario, EOR is the wise choice you could ever make to grow your international team without any hassle.
Benefits of EOR for Your Business
HR activities from hiring new employees to processing payroll demand constant attention to every detail, including individual payments, taxes, commissions, reimbursements and other employee benefits at large. With EOR, you can allow a reliable someone to manage everything on your behalf. This way, you save a great deal of time which you can, in turn, invest in effective business development.
When you entrust an employer of record for employee management, payroll processing and other HR-based activities of your company, you can witness greater precision. This is because all these are the core responsibilities of an EOR. On the other hand, your in-house team has other business-related activities to concentrate on.
When you have an in-house team to manage HR activities, you and your resources have to spend more time on generating reports from time to time. This is, of course, a monotonous process. You can put an end to this practice with a trusted EOR.
The employer of record takes care of maintaining all data-backed reports on your behalf. Plus, you can get real-time insights into your company’s payroll activities without having to spend time and energy on the actual process.
No Regulatory Risks
As said earlier, employee and payroll management on a global scale involves maintaining legal compliance. Keeping track of the labor laws of various countries at a time is difficult when you do it on your own.
On the other hand, an EOR maintains updated tax tables and keeps track of the social norms in counties across the globe easily. This is because it is intertwined with their core responsibilities.
With an EOR to back you up, you need not worry about regulatory risks anymore.
Selecting Your EOR Service Provider
While there are many EOR service providers out there, you ought to find out the best one who can cater to the HR requirements of your company. Take a look at the steps to choose your employer on record service provider.
Narrow down your requirements
When you choose an EOR to hire and manage human resources, you should have a clear action plan as to what you want them to handle for you.
Doing this can fetch benefits for both of you. Yes, while you will be able to evaluate if the EOR is a right fit for your company, you can give them more clarity into the process involved.
Check for Trustworthiness
Handling payroll and other related activities involves confidential data from both the employer and the employees.
Given the scenario, you need to make sure the EOR service provider is someone who has won the confidence of many businesses like yours. This way, you can rest assured that you have handed over sensitive data to the right set of people.
Get a Bigger Picture
Once you find an employer of record that can be a good fit for you, get in touch with them to get a bigger picture of how they do what they do. Once you are satisfied, you can let them take care of the HR activities and go back to focusing more on your core business concerns.
Why choose Multiplier?
Multiplier is a powerful technology platform that can automate everything about human resource management.
With our transparent EOR services, you can onboard, manage and pay employees anywhere across the globe in line with local laws yet without taking the pains of setting up a local entity.
While taking care of end-to-end HR activities including, hiring global employees, managing payroll, deductions and more, Multiplier gives you 100% ownership over your international employees.
Multiplier simplifies complex payroll and tax payments for your company thereby helping you to save time and labor. You can keep track of payments, approve payroll for your global employees all in a click.
Ready to simplify and streamline the HR activities of your company with a trusted EOR partner? Talk to our business consultants at Multiplier today.