Insights into global expansion & employee retention

Published: October 29, 2021

What Is an Employer of Record Partner and How Do They Help?

It’s almost cliche now to say ‘the world of work is changing’.
Classification by Region | Employer Of Record

As businesses grow and expand globally, they face numerous challenges when managing their workforce. One of the most significant hurdles is navigating the complex web of local tax laws, employment regulations, and payroll processing requirements that come with operating in a foreign country or new county. This is where an Employer of Record (EOR) comes in, providing businesses with a solution to manage their business operations in a new location.

The pandemic crisis simply blew the lid, creating—in some industries at least—mass resignations as new employees showed how serious they are, that purpose is more important than a paycheck to them.

What is an Employer of Record?

An employer of record is a third party, professional employer organization that takes on the legal and administrative responsibilities of employing workers in a foreign country or new county. The employer of record partner becomes the employer on record for the employees, taking care of payroll processing, benefits administration, and workers comp, among other things. The employer of record partner also ensures compliance with local government regulations, reducing the risk of legal and financial penalties for the company.

An employer of record handles a variety of compliance aspects that you don’t have to worry about such as:

  • Employment contracts
  • Processing payroll
  • Workers compensation
  • Workers compensation insurance
  • Filing employer payroll taxes
  • Filing employee taxes Managing workers’ compensation or other similar insurances
  • Providing health benefits (mandatory in many countries)
  • Offering retirement vehicles and pension schemes
  • Assisting in regulatory compliance Advising on local employment regulations and practices

Adapting and moving with the times

Now more and more employers are realising the need to extend their talent search overseas. The concept of an employer of record partner is not new, but it has gained popularity in recent years as companies look to expand their global footprint.

As businesses increasingly rely on independent contractors and remote workers, a flexible and scalable workforce management solution has become more critical. Employers of record have adapted to these changes, providing solutions for businesses to hire and manage a global workforce without an on-site HR team. In the past, businesses may have turned to third party staffing agencies or independent contractors to help them find local talent and navigate the complexities of local employment laws.

In part, for finding specialist talent not locally sourceable—talent able to carry business goals across borders into new global markets—but also so that employees can relocate abroad in pursuit of purpose, priorities and adventure instead of quitting.

What Is an Employer of Record (EOR) Partner?

An employer of record partner is third party a company that provides employer of record services to businesses looking to expand globally. Employer of record partners specialize in managing the legal and administrative requirements of employing workers in foreign countries or new counties. When selecting an employer of record partner, businesses should consider factors such as experience, reputation, and expertise in the industry and region where they plan to expand.

An employer of record partner takes on all legal responsibility for the talent you hire and relocate, effectively acting (on paper, at least) as the legal employer.

Employer Of Record partners are responsible for:

  • issuing work contracts,
  • processing multinational payroll,
  • keeping you locally compliant in each new country,
  • tax and contributions,
  • even termination legal support,
  • workers compensation,
  • intellectual property,
  • work permits,
  • non compliance,
  • and even paying bonuses.

A worthwhile employee of record partner should be able to assist your international expansion plans into any new country by taking care of all of this, and more, as you build or relocate your global teams and enter a new international market. An Employee Of Record partner is so much more than just a staffing agency.

How to Shortlist Employer Of Record Partners to Enable Your Global Expansion

Selecting the right employer of record partner is crucial to the success of your global expansion plans. The only common theme with Employee Of Record partners is that they all assume legal responsibility for the talent you hire and relocate.

Other factors vary. When shortlisting Employee Of Record partners to take seriously, score them on the following.

Think of this list as your aptitude test:

  • Heritage and experience
  • Current and planned countries of presence
  • Local-compliance expertise by country
  • Level of human support
  • Availability of free resources
  • When and how often do they bill you
  • SLAs and support availability
  • Client transparency and communication
  • Pricing transparency
  • Legal support in case of terminations

Also, check their references—for example, because Playroll’s proprietary, global physical employment entities were built in the 90s for the VAT IT Group, we can provide third party recommendations and confirmation of our heritage.

What’s the difference between an EOR and a PEO?

While Employer of Record and Professional Employer Organizations (PEOs) share some similarities, there are significant differences between the two. An employer of record partner takes on the legal and administrative responsibilities of employing workers, while a PEO typically shares those responsibilities with the client company. Employer of record also provide a more flexible and scalable solution, making them an ideal choice for businesses looking to expand globally.

Employers of Record (EOR) and Professional Employer Organizations (PEOs) are two key services available to businesses seeking to hire remote employees in other countries. While they may sound similar, Employer of Record vs PEO is an important distinction to make as they both provide employers with different employee benefits and responsibilities.

They key difference between an EOR and PEO

The key difference is that an employee of record partner can help growing employers hire overseas talent and enter new markets faster by hiring on their behalf, slashing human resources and time-to-market timescales, local-compliance risk and are not cost effective.

PEOs don’t act as legal employers, taking on exclusively an HR management function, and so PEOs cannot help with compliantly hiring remote teams overseas.

If you don’t own the employment entities in the countries you need to hire in, then your Employee of Record partner—not a PEO—can make it happen. Ideally, with fully-owned physical entities controlled by them instead of third parties you don’t know about.

How Does Playroll Stack up As Your Potential EOR Global Expansion Partner?

An Employee Of Record partner able to carry your overseas expansion goals with you needs to demonstrate that they’ve already done the same for others. Playroll has a heritage that demonstrates just that. Playroll is a leading employer of record provider, offering businesses a comprehensive solution for managing their global workforce. With a team of experts who have extensive experience in the industry and regions they serve, Playroll provides clients with a high level of service and support.

What’s Playroll’s biggest strength?

One of Playroll’s biggest strengths is its partnership with The VAT IT Group, a global leader in tax compliance services. This partnership allows Playroll as an employer of record to offer its clients a comprehensive solution that covers not only employment of record and payroll but also tax compliance. This partnership has enabled us to create a unique offering for our clients, one that not only takes care of their employment and payroll requirements but also ensures compliance with local laws and regulations.

Our partnership with The VAT IT Group means that our clients can rest assured that their tax compliance requirements are in good hands with their employer of record. Our clients can benefit from the latest technology and expertise, ensuring that they remain compliant with local laws, regulations, and obligations. Our partnership allows us to offer businesses a complete solution that covers all their needs for operating in foreign countries and mitigating risks, including avoiding fines and penalties.

By working with Playroll, businesses can streamline their global expansion and reduce the risk of non-compliance with local laws. Our clients can access a wealth of expertise and knowledge, ensuring that they stay ahead of the game in this ever-changing landscape. Our commitment to providing a comprehensive solution that covers all our clients’ needs is what sets us apart as an employer of record and is a testament to our commitment to providing a truly exceptional service.

Payroll and The VAT IT Group

The VAT IT Group is the world’s biggest regtech provider, serving 20,000 clients including more than 50% of the fortune 500 companies. The global physical employment entities Playroll gives growing businesses access to is thanks to Playroll having built VAT IT Group’s global infrastructure over more than 20 years. With Playroll, you won’t need to set up new offices.

What’s Playroll’s biggest weakness?

If you can call it a ‘weakness’, we go against the crowd when it comes to automated support. We believe that in the realm of managing the complexities of global HR and payroll, a more personalized and human touch is crucial. While automation can bring significant benefits to businesses, including increased efficiency and accuracy, we place a high value on having human experts available to provide guidance and support to our clients.

Our technology is cutting-edge, but we also know that it’s essential to have a team of experts available to provide personalized support to our clients. We understand that every business is unique, and therefore requires individualized support and attention. We’re committed to providing personalized support to ensure that our clients have access to the guidance they need to make informed decisions about their global workforce.

While some businesses may prefer a more automated approach to managing their global workforce, our dedication to customer satisfaction and service excellence is reflected in our commitment to providing personalized support as an employer of record. By choosing Playroll as your employer of record partner, you can be confident that you will receive the guidance and support you need to achieve your global expansion goals.

Algorithms vs humans

Some employee of record partners cost-cut by building chatbot support algorithms that limit the scope for urgent, detailed and comprehensive support. We automate only Playroll’s innovative core technology that lets partners create and send two-step, auto-compliant work employment contracts while managing multinational payroll services in one intuitive dashboard. Legal and day-to-day support is all human-backed by on-the-ground local-compliance experts in each country of operation.

How Does Playroll Provide Instant Value?

As a leading employer of record, we understand that speed is crucial when it comes to global expansion. Our team of experts has the experience and expertise necessary to help businesses hit the ground running, even in the most urgent and fast-paced environments. One of the key benefits of working with us as your Employer Of Record partner is the speed at which we can provide value to our clients.

Start planning new hires immediately

When businesses partner with Playroll, they can start planning new hires and global expansion immediately. Our comprehensive employer of record solution covers all the necessary requirements for employment and payroll, ensuring compliance with local laws and regulations. Our team of experts is available to provide guidance and support throughout the process, ensuring a smooth and efficient transition into new markets.

Exceptional service from the get-go

Our commitment to providing an exceptional service means that we’re always looking for ways to streamline the process and save time. By partnering with us, businesses can access a wealth of knowledge and expertise, ensuring that they’re able to take advantage of new opportunities as they arise. We work closely with our clients to understand their unique requirements, ensuring that we provide a customized solution that meets their specific needs.

Start planning new hires and global expansion for free

You won’t be charged for using Playroll as your Employee Of Record partner until you actually make the first hire. Before that, you’ll get tons of instant value.

From the moment you log into your free Payroll account, you can use Playroll’s HR calculator to plan potential costs like salary, health insurance, contributions and payroll taxes, for each potential new hire.

You’ll also have instant, free access to Playroll’s Country Encyclopedia Insights to easily get clued up on up-to-date country-by-country employment regulations.

Have fun—whether you choose Playroll as your global expansion Employee Of Record partner or not, at least use the free resources we provide to start planning your world domination.

Partnering with an Employment Of Record for Global Expansion Success

Partnering with an employer of record can be a game-changer for businesses looking to expand their operations globally. An employer of record partner can handle all the complexities and legal requirements of hiring and managing a global workforce, allowing businesses to focus on their core competencies and growth strategies. When choosing an employer of record partner, it’s important to consider factors such as expertise, compliance, and being cost effective.

Playroll is a leading employer of record provider that offers a comprehensive solution for businesses looking to expand globally. With their expertise in payroll processing, compliance with local laws and regulations, and commitment to providing personalized service, Playroll can help businesses achieve their global expansion goals with ease. Contact Playroll today to learn more about how they can help your business thrive in the global marketplace.

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