EOR

Why Partnering with an Employer of Record is Better Than Foraying Into Foreign Talent Markets On Your Own

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Whether it’s navigating individual hires or overseeing a legion of contractors and freelancers in various countries, global employment overflows with complexities. Are you finding yourself standing in the same line?

To simplify international employment, an Employer of Record can be your strategic ally. A global Employer of Record (EOR) is a third-party organization that acts as a full legal employer for the employees of your company, assuming all employment-related responsibilities on its behalf. EORs enable the onboarding of international employees without going through the lengthy and expensive process of local entity establishment or risking violation of local labor laws. They also handle all the vital administrative tasks, from compliance to HR functions. 

Let’s examine the undeniable benefits of EOR and reveal how this collaboration streamlines workforce expansion for a seamless and efficient global operation.

Benefits of an Employer of Record

Partnering with an EOR offers many benefits that can boost your growth and success in the global market. 

Below are some benefits of partnering with EORs:

Enables You To Employ Talent In Days

Onboarding global employees has its own complexities that require more effort and time. EOR services expedite the onboarding process for your company and the employees. With their expertise in navigating local regulations and compliance requirements, they offer a swift and smooth transition for new hires by minimizing administrative delays.  

They enable companies to effectively add a new employee within a matter of a few days. Employer of Record Solutions, particularly the SaaS-based ones like Gloroots convert the arduous process of contract generation, setting up payroll, and handing out benefits to a few clicks. 

Read: How Pricelabs Grew Its Indian Team From 5 to 80 employees With Gloroots

EORs also provide support and guidance for the employees by answering questions and providing the necessary information, orientation, and policies about the company. They save companies time and effort by letting them adapt quickly to changing workforce needs.

Eliminates The Need to Work With Multiple Partners

Imagine you are hiring two employees from two different countries. This means you have to partner with two payroll providers, two benefits or insurance vendors and two different agencies to conduct background checks. To put things in a better perspective, to hire two employees from two different countries, you must work with 6 different partners (and we haven’t even accounted for legal experts, visa partners, sourcing or staffing agencies). 

An Employer of Record is a one-stop shop for global employment. It minimizes the complexities associated with coordinating different vendors. Take handling multi-country payroll, for example. Coordinating multiple vendors can lead to payroll discrepancies, delays, and compliance issues.

On the other hand, with an EOR like Gloroots, you have a centralized system for salary expenditure, social security contributions and taxation for all your employees. Moreover, you can easily liaise with a single vendor to resolve any disputes in case of delays and inaccurate payments.

Ensures No Risks In Employing Global Talent

Every country has its own set of laws and regulations for employment and taxation. Non-compliance with these laws could lead to penalties. With global EORs, the fulfillment of all these regulatory and legal requirements is taken care of. EORs adhere to all existing rules in the country and effectively adapt in case of any changes. They also handle any legal issues or disputes around employment that may arise. This maintains a clean legal record, reducing the risk of legal issues and penalties.

SaaS-based EORs Provide Greater Transparency

Modern-day Employer of Record services leverages cutting-edge SaaS platforms. These platforms offer real-time visibility into payroll, compliance, and HR processes, with unparalleled visibility. This transparency fosters better decision-making as organizations can access up-to-date information on hiring, forecast salary budgets, etc. Additionally, SaaS EOR platforms streamline administrative tasks, enhancing efficiency and reducing the risk of manual errors in complex global operations.

Read: How Sketchnote Saves 87% More Time After Using Gloroots’ SaaS Global EOR Platform

Difference between Legacy EORs and EORs with SaaS Platform

Feature Legacy EOR EORs with SaaS Platform
Onboarding Efficiency Manual processes lead to delays and errors. Automated systems enhance efficiency by streamlining onboarding and HR management tasks.
Scalability Manual processes offer limited scalability. Easily adapt to workforce changes and global expansion.
Data Security Vulnerable to security risks. Prioritize data security with robust encryption and regular updates.
Global Accessibility Limited accessibility and collaboration. Cloud-based SaaS platforms facilitate global accessibility and collaboration across borders.
Transparency Limited visibility into the processes. Have dashboards with clear insights, enhancing transparency in the employment and payroll process.

Reduces Cost of Operation

Hiring employees from other countries through an EOR can significantly cut the costs of setting up a foreign legal entity and handling administrative overheads. This is because EORs are legal entities with all registrations and licenses established in such countries to carry out employer duties for your company. 

With EORs handling all the administrative responsibilities, the company's cost of operation is significantly reduced. This allows the company to expand seamlessly by employing international workers without stressing the expenses of traditional expansion methods.

Arranging Visas and Work Permits

An Employer of Record helps employers acquire visas, work permits, and work authorization for employees working in foreign jurisdictions. With a comprehensive understanding of local immigration laws, EORs streamline the visa application process by submitting the requisite documentation. This includes monitoring expiration dates, orchestrating timely renewals, and minimizing disruptions to employees' legal work status. By handling the complexities associated with global mobility, EORs contribute significantly to risk mitigation, shielding companies from potential legal complications and penalties related to immigration non-compliance. 

Fosters Talent Retention with a Comprehensive Benefits Package

EORs help you develop and administer competitive employee benefits packages that help to attract and retain talent from other countries. These benefits include paid leave, insurance, pension plans, sick leave, maternity and paternity leave, and so on.

EORs also customize the benefits plans to match local regulations and employee expectations in each country. With EORs managing employee benefits on your behalf, your internal workload and compliance risks will reduce drastically.  

Offers Flexibility to Scale Quickly

EORs offers a dynamic solution for companies to scale up or down seamlessly to meet evolving business needs. Whether entering new markets, executing short-term projects, or responding to market fluctuations, companies can quickly adapt their workforce size without the need for complex administrative processes. 

Ensures Payroll Compliance and On-Time Payment Processing 

Many countries restrict remote payroll, insisting companies use a registered local entity to handle payroll. But when companies opt for an EOR, they ensure that the payroll is compliant with the country's laws and regulations. 

Companies can also avoid the burden of calculating and withholding statutory deductions from pay, such as taxes, pensions, and health insurance, from salaries. The EOR handles all these critical details and ensures on-time payment processing. Also, it pays the employees in their local currency, eliminating the transaction costs involved in converting currencies. 

Although an Employer of Record handles payroll, it’s not the same as an outsourcing payroll agency. Here are the differences between both service providers:

Aspect Employer of Record Outsourcing Payroll Agency
Services Offered Comprehensive HR services including payroll, employee benefits, compliance, and risk management. Focuses mainly on Payroll processing and related tax obligations.
Employment Structure Assumes employer responsibilities for tax and legal purposes. Handles only payroll management on behalf of the client.
Tax compliance Ensures compliance with the local tax regulations. Handles only payroll tax processing.
Liability and Compliance Mitigates risks associated with employment law compliance, eliminating legal issues and penalties. Limited risk mitigation beyond payroll-related compliance. Clients may bear more legal risks.
Employee Relationship Establishes clear employer-employee relationships. Employees remain under the client's employment.
Global Expansion Support Ideal for global expansion to handle the complexities of international employment and compliance. Requires additional partners for international workforce management.
Cost Savings Consolidates all the HR functions for efficiency and cost savings. Requires multiple vendors for various HR functions, leading to higher administrative costs.

When do you need an EOR?

Businesses seeking to expand globally but daunted by international HR management's complexities can significantly benefit from an EOR in the following instances:

When you don’t own a legal entity in another country

Usually, for a company to set up a local entity in another country it is both time-consuming and expensive. In some countries, setting up an entity can take months. If you want to scale globally without incurring the significant costs of setting up and maintaining legal entities in multiple countries, EOR is the best solution. Running smooth operations in the host country just becomes infinitely easier.

The following table provides a comprehensive overview of how EOR services offer a strategic edge over the traditional path of establishing a business entity.

Aspects Hiring Employer of Record Opening an entity in other countries
Setup Time Quick setup with minimal delays. Lengthy process involving legal procedures.
Cost Predictable costs with fewer upfront expenses. Expensive initial setup costs and ongoing operational expenses.
Flexibility Flexible to scale easily. Limited flexibility.
Administrative burden Handles all the administrative tasks. Requires managing complex administrative responsibilities in-house.
Market Entry Speed Faster market entry. Slower market entry due to legal and bureaucratic reasons.
Tax Compliance Manages all tax compliance. Complex regulatory compliance burden.
Risk Mitigation Handles all employment risks. Should bear legal risks directly.
Focus on Business Core Allows focus on core activities. Distracted by administrative tasks.
Exit Strategy Easier exit with EOR services. Dissolving involves intricate processes.

When your existing employees relocate

With remote work becoming more common these days, employees are less tied to working from one physical location. We are in a world where employees have the option to move around without sacrificing their jobs. In this case, EOR is a quick and easy way to retain employees who choose to relocate. It even allows the opportunity to employ digital nomads who travel across countries. EOR acts as the legal employer for your company’s distributed workforce. 

When you step into a new market 

For businesses looking to step into new markets, EOR allows companies to evaluate their favorability without making a significant investment. Also, for businesses engaging in short-term projects in other countries, EOR manages temporary employment without the need for complex legal formalities. Overall, it offers a streamlined approach for effective international business operations and growth. 

EORs are experts in all things Employment! 

An Employer of Record is a strategic partner that can help you navigate the complex landscape of global employment management. It's not only about offloading responsibilities but also smart collaboration! 

EORs take up complex tasks and free up valuable time and resources that can be redirected toward core business activities. 

However, you need to choose the right EOR that can meet your business’s unique needs. Factors such as global compliance, seamless integration, and a proven track record in diverse regions should be considered. The right partnership can seamlessly weave transparency and efficiency into your company's fabric, letting your business thrive globally.

Why choose Gloroots as your EOR?

Gloroots is a global Employer of Record that enables businesses to manage international workforces in 140+ countries. It is a one-stop shop for all your international employment management needs. Learn what sets us apart.

  • Global Coverage: With an extensive international network, Gloroots enables the employment of global talents effectively and legally. Also, our expertise in understanding diverse markets empowers your company to navigate complex regulations, fostering successful global expansion.
  • Flexible and Scalable: Gloroots EOR services cater to businesses of varying sizes and industries. Also, it offers tailored solutions to meet the specific needs of your company and industry requirements. It swiftly adapts to accommodate the company's growth and changing demands. 
  • Range of services: Gloroots ensures a smoother onboarding process, seamless payroll management, regulatory tax and compliance management, and efficient benefits administration. Gloroots handles all employment-related liabilities, ensuring strict adherence to labor laws, payroll taxes, and employment regulations. 
  • Reliability: Transparency is the bedrock of Gloroots. Whether ensuring timely payroll processing or navigating the nuances of international employment laws, Gloroots creates a solid foundation for your company's global venture.
  • Automated Payroll: Gloroots simplifies the payroll process for global teams. With features like single-click payroll, customizable bonus frequencies, and clear invoice management, you can manage and pay your distributed workforce in a single platform.
  • Customer support: Glooroots understands that strong customer support is crucial to maintaining a smooth workflow. Our expert team provides invaluable guidance and support, accommodating local time zones. 

Gloroots takes up the complexities of employee management, letting you focus on the core part of your business. Gloroots is your strategic partner that empowers your business to flourish beyond borders!

Ready to take your hiring global? Let’s talk. Our experts have got you covered. 

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