Employer of Record (EOR) services: Hiring employees in Germany

Planning to hire in Deutschland? Here’s how an EOR can help.

As a leading European economy with a highly skilled workforce, Germany or Deutschland offers numerous opportunities for businesses looking to expand their global operations. With its strong industrial base, advanced technological infrastructure, and stable political environment, Germany is an attractive destination for companies across various sectors.

If you’re looking to expand your business’s presence in Germany, an Employer of Record or EOR can help you navigate the complexities of local labor laws and streamline your hiring process. By partnering with an EOR, you can quickly and efficiently hire talent in Germany without the need to establish a legal entity.

In place of your organization, the EOR acts as the legal employer for your workforce in Germany. In this capacity, the EOR handles all HR and compliance responsibilities. Meanwhile, you maintain control over day-to-day activities and can focus on business strategy.

Why choose an EOR for hiring in Germany?

For startups, small businesses, and medium-sized enterprises looking for a way to achieve rapid global expansion, navigating the complexities of the German labor market can be challenging. By outsourcing HR functions to an EOR, you can streamline operations and focus on core business activities.

• Hire and integrate new employees in Germany quickly without the need for your own local entity — which the EOR establishes, instead
• Offload the significant risk of complying with complex labor laws and regulations to the EOR
• Outsource payroll, benefits, and tax administration so you may focus on strategic initiatives.
• Decrease the heavy administrative burden associated with HR tasks as the EOR takes these on, freeing your team to focus on more strategic business activity.

An EOR acts as the legal employer for your German workforce, ensuring seamless onboarding, payroll processing, and benefits administration. This allows you to concentrate on growing your business in Germany while the EOR takes care of the complexities of local employment law.

Choosing between an EOR and PEO in Germany

Two main alternatives are available to employers looking to quickly expand into a new market, including Germany: One is an EOR, and the other is a professional employer organization, or PEO. Which approach is best for your organization is found in the significant differences between an EOR and PEO.

If your objective is to transfer all risk for compliance with employment law in Germany, then an EOR is the correct choice.

How to select the right EOR provider in Germany

Consider some key factors when selecting which EOR is best for your expansion into Germany. A poorly chosen EOR can lead to extensive trouble with compliance issues, ballooning costs, and a detrimental effect on employee experience.

It’s crucial to assess the EOR’s understanding of German labor laws, regulations, and cultural nuances. Additionally, consider the EOR’s ability to provide reliable customer support and dedicated account management. Transparent pricing and a clear understanding of the total cost of ownership are also essential factors to evaluate.

• Legal compliance: The EOR should have a deep understanding of German labor laws, regulations, and cultural nuances. Look for a provider with a proven track record of handling compliance challenges in Germany specific to your industry.
• Customer service: A reliable EOR should offer exceptional customer support. Multiplier’s support team is human-first open seven days per week, 24 hours per day. There are no bots, and every account has a dedicated manager.
• Transparency pricing: Many EORs have low entry costs. Hidden fees or a confusing pricing structure lurk, however. Choose an EOR with clear and transparent pricing models that are straightforward to determine.
• Total cost of ownership: While initial costs are important, it’s crucial to consider the long-term value and potential additional costs associated with an EOR provider. Avoid choosing a low-cost provider that may compromise on quality of service or compliance. Instead, invest in a reliable EOR that can deliver exceptional value and minimize risks.

How EOR services work in Germany

Step 1: Send that contract over

Once you’ve found just the right candidate and your EOR, a locally compliant employment contract can be generated quickly.

Multiplier’s automated system will produce one for Germany-based employees of yours in under five minutes, seeing to it that these contracts are fully compliant with German labor law. You can then customize terms such as job responsibilities, working hours, remuneration, and termination conditions. The EOR will then securely send the contract for signature.

Step 2: Enhance compensation with competitive benefits

To attract and retain top talent, a competitive benefits package is essential. Your EOR can provide guidance on selecting suitable benefits that align with local regulations and employee preferences. This spares you the otherwise overwhelming prospect of choosing among lengthy list of local vendors.

Step 3: Simplify administrative tasks

To streamline the onboarding process, an EOR like Multiplier will automatically collect the necessary documentation, including tax and banking information, to set up payroll. This ensures a smooth and efficient start for your new hires. Paperwork hassles are nonexistent, as Multiplier handles all required of this directly. Onboarding employees in Germany may seem like too much to handle. In reality, however, an EOR like Multiplier makes it more than manageable.

Step 4: Optimize payroll and tax compliance

Running payroll in Germany can be complex. It demands a deep understanding of specific tax rates and other required contributions. By partnering with an EOR like Multiplier, you can ensure accurate and timely salary payments while the EOR handles all local taxes, contributions, and withholdings. With a global payroll solution, you can manage payroll for your workforce worldwide from one place.

Step 5: Focus on your core business

Multiplier handles all aspects of post-hire onboarding, ensuring that your German employees receive their first paycheck and each one after that on time and calculated accurately. Additionally, an EOR like Multiplier will manage compliance related to terminations and voluntary leaves, ensuring compliance with local labor laws. By entrusting HR and compliance tasks to the EOR, you can focus on growing your business.

Moving forward with Multiplier EOR in Germany

An EOR is a highly recommended solution for businesses looking to expand quickly into Germany. By outsourcing HR and compliance functions to an EOR, you can streamline operations, mitigate risks, and focus on core business activities.

Comprehensive, Multiplier’s Employer of Record (EOR) services help you expand your workforce in Germany. You can hire top talent without the need to establish a local legal entity. Multiplier enables smooth hiring, onboarding, and employee management processes, as well as locally compliant contracts, managed payroll, and a range of customizable benefits tailored to German standards.

Book a demo to learn how Multiplier can help you achieve HR compliance in Germany.