Insights into global expansion & employee retention

Published: July 21, 2023

What are Employer of Record Services and How to Use Them

Businesses use EoR services to compliantly access a global talent pool and mitigate risks that come with employing talent from foreign countries. EoR service providers offer speed to market, risk reduction and cost-efficiency to name a few.
man looking at employment of record services

Essential Considerations for EOR Services

  • Employer of Record Services help you enter new markets while adhering to country-specific legal compliance and regulations.
  • Scaling your business beyond borders can be a complex undertaking. EOR services can support your business expansion efforts.
  • Distinguishing EOR services from PEO services is essential.

The rapid rise in popularity of Employer of Record services is opening doors to a diverse global talent pool. Discover the fundamentals of EOR services, their business benefits, and why companies are embracing them for remarkable growth opportunities.

What is a Global Employer of Record (EOR)?

A Global Employer of Record (EOR) is an expert service provider that takes on the legal responsibility of employing workers, including contractors and full time employees on behalf of a company where employees operate in foreign countries, effectively acting as the local employer.

For businesses wanting to establish a presence in a new country, dealing with the local employment laws, tax regulators and administrative processes related to global expansion can be a taxing task.  The Employer of Record service acts as the go-between for companies and employees, enabling them to expand globally without the need to set up a legal entity in each country. With on the ground local expertise, Employer of Record services make expanding into global markets effortless.

6 Key functions of an Employer of Record Service You Didn’t Know

1. Payroll and tax management: The EOR assists with payroll services including making payment, calculating wages, deduction and bonus management, ensuring accurate and timely payment. Additionally the EOR tends to payroll taxes in line with local legislation.

2.Employment compliance: The EOR ensures that all employees are hired in line with local employment laws, local tax and legal requirements.

3. HR services: The EOR tends to all HR related administrative tasks on behalf of an employer, allowing them to focus on their core operations by freeing up resources.

4. Employee onboarding and offboarding: The EOR provides full workforce solutions, managing all employee related tasks linked to onboarding and offboarding, this includes documentation management, training, exit interviews and contract termination.

5. Benefits administration: The EOR manages all benefits related matters on behalf of the employer, including retirement plans and health insurance to ensure that employees are offered benefits aligned to local markets.

6. Employment documentation and contracts: The EOR oversees employee documentation and contract management, including preparing compliant employment contracts in line with local legislation.

Employer of Record Services List

Why Do Companies Use Employer of Record Services?

As more companies accelerate their global expansion plans, Employer of Record services are growing in popularity. Many businesses entering markets for the first time are turning to Employer of Record services to help them confidently enter the market. Without established local entities or the risk appetite and knowledge about local regulations to set up a formal presence, expanding into new territories can be challenging.

Let’s unpack some key reasons businesses are turning to Employer of Record services:

  • Access to global talent and expansion opportunities: Entering new markets with lack of local knowledge or networks can be a challenging undertaking. However, by partnering with an EOR service provider with access to local networks and expertise, unlocking a global talent pool becomes a more seamless and less daunting process for businesses.
  • Risk mitigation and legal compliance: Without having deep knowledge of the regulations and laws that govern individual markets, hiring talent in foreign countries is not a simple task and businesses are turning to Employer of Record service providers to fuel their global expansion efforts. The EOR has a deep understanding of local legislation and experience in managing foreign employment and takes on the risk of all legal and employee related matters, effectively acting as the legal employer.
  • Employer of Record services streamline HR operations and reduce admin: Businesses with small HR departments, or none at all, often have to manage lengthy administrative tasks that can shift focus away from core operations. This is where an Employer of Record service comes in. The EOR takes over the burden of HR administrative tasks like payroll, benefits and onboarding, giving businesses more time to focus on strategic business functions.
  • Flexibility for business growth:  EOR services offer businesses the flexibility to hire talent in regions outside of local borders, reducing the administrative load and cost that comes with entering new markets. Businesses are using EOR services to ignite their global expansion plans, because of how quickly and easily EOR service providers can onboard foreign talent.

5 Benefits of Using an Employer of Record

1. Speed to market. An Employer of Record Service makes it easier for your business to enter new markets quickly, saving you the time it would typically take to set up a local entity. This is beneficial if your business needs to act quickly to market changes and developments.  With pre-existing entities across the globe, Employer of Record Services can help you hire employees globally in a matter of days.

2. Risk reduction. Setting up a formal presence in different countries is a lengthy task, which comes with legal red-tape and a myriad of compliance considerations.  An Employer of Record service helps businesses hire talent in global markets without having to set up formal roots. By acting as the legal employer.  The Employer of Record is responsible for managing all legal and compliance considerations reducing risk for your business. 

3. Cost-efficiency. Setting up local entities and paying local recruitment agencies to help you expand your global footprint can be a costly exercise. With pre-existing entities, Employer of Record services help you to mitigate these costs.

4. Scalability. Businesses frequently need to expand the size of their workforce in response to rapid growth. EOR services step in to help businesses hire and employ talent at record speed, without needing to set up local entities or build an HR department to manage the increased demand.

5. Focus on core operations. By removing the administrative burden and time it typically takes to set up a local entity, using an Employer of Record service can help businesses shift their focus to what matters most- the business of their business.

EOR  vs Other Employment Models. Which Is Right For Your Business?

While other employment models, like a Professional Employer Organisation (PEO) may offer flexibility, they are often guided by traditional hiring practices including freelancers and staffing agencies and lack the deep insight needed to guide global business expansion. Employer of Record services, however, offer a tailored approach to employment, designed to meet your business specific needs and possess deep industry knowledge and region-specific expertise helping your business access the right talent anywhere in the world.

Playroll, Your Global EOR Partner for Expanding Markets!

Seeking to enter the Canadian market, SAPRO, a global tax advisory firm, expressed interest in compliantly entering the Canadian market, including adding Canada into its international payroll system.

SAPRO partnered with Playroll, a Global Employer of Record to streamline the approach and facilitate a smooth entry, while adhering to country-specific legal requirements. Playroll helps businesses like SAPRO hire talent in over 180 countries globally, providing access to visa support in over 40 countries and employee onboarding in days, not weeks.

With Playroll’s customer-centric platform, dedicated customer service support and expert country-specific knowledge, SAPRO was able to effortlessly recruit and onboard top Canadian talent, enhancing their global expansion strategy.

Playroll Employer of Record Services Dashboard

Interested in learning how Playroll can transform your business expansion goals to thrive in the global marketplace?

Click here to Schedule a demo to learn more or sign up for a free account.

Employer of Record Services FAQ

Is an employer of record the same as a PEO?

No, an Employer of Record (EOR) is not the same as a Professional Employer Organsation (PEO). An Employer of Record Service manages compliance and all employment-related services, while a Professional Employer Organization co-employs staff with the client company.

What Are the Costs Associated with Employer of Record Services?

Costs vary depending on the service provider. Playroll offers flat rates starting from $399 p/ month.

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