4 Ways an EOR Helps ‘Level the Playing Field’ for Businesses
Today’s business environment is extremely competitive, with globalization and technology creating new disruptions in the ways companies find and use talent. To maximize your own business’s chances for success, you need to be able to access top talent, no matter where they live.
While smaller businesses often are disadvantaged in comparison to larger firms, that changes with an Employer of Record (EOR) in their back-office corner. In fact, the World Economic Forum stated EORs “level the playing field, so that companies of all sizes can hire talent from anywhere and make their work experience just as equitable as if they were traditional employees.”
How EORs level the playing field for all size businesses:
1. Access to Global Talent
The first and most obvious way EORs level the playing field for smaller businesses is by providing access to global talent. Smaller companies do not have the resources to properly recruit, onboard and administer payroll and benefits to international and contingent talent.
By enabling businesses to work with a broader range of talent, EORs make it easier to find top talent that will help companies with their most important goals. Rather than being limited to in-office workers who live within commuting distance of the office, working with an EOR expands your reach.
This allows businesses to scale at a more rapid place by quickly gaining access to workers in new markets. With widespread concerns of a global talent shortage, the flexibility to enter new markets based on changing industry needs can be a valuable competitive advantage.
2. Ensure Total Compliance
An essential element of working with an EOR is total compliance on the part of the hiring company. EORs maintain legal entities in all countries they operate in. They fulfill all local labor laws and employer compliance requirements for the areas where they operate.
Because of this, compliance at a federal, state, and local level is a top priority for an EOR. They rigorously track all employment laws that affect the individuals you might hire. This includes meeting requirements for administering background checks, classifying a worker as an independent contractor or full-time employee, and managing tax withholdings and deposits.
By ensuring rigorous adherence to these and other employment compliance factors, an EOR significantly reduces legal risks for businesses. This enables a business to focus on their own areas of expertise and onboard new workers with full peace of mind. The legal liability of compliance gets taken by the EOR and drastically reduces compliance risk for its clients.
More importantly, EORs take a proactive approach to compliance. Continuous monitoring of regulations and laws that could affect business operations protects you from fines, penalties and other issues that would disrupt work.
3. Improve the Employee Experience
An EOR also helps level the playing field by improving the employee experience for all workers, regardless of their status or place of origin. For example, an EOR can help manage payroll across multiple countries. By handling multi-currency payroll, the EOR ensures that all employees are paid on time and accurately — something that can get surprisingly complicated when different areas require workers to be paid at different time intervals.
An EOR also improves the employee experience through proper benefits administration. Benefits administration (including determining which employees qualify for benefits and the type of benefits you need to provide) can be time-consuming and expensive for smaller businesses. This only gets more complex as talent gets sourced from states and countries with different benefits requirements.
By outsourcing benefits administration to an EOR, employees get benefits packages that are in alignment with local regulations. Meeting these requirements is essential for protecting workers’ rights and ensuring that they do not have to worry about receiving proper support from their employer. In addition, EORs come equipped to provide local support when hires have an HR-related question, ensuring their needs are addressed in a timely and personalized manner.
4. Reduce Operating Costs
Recruiting, administering payroll and benefits, compliance management and other HR responsibilities are all crucial to effective workforce management. But these tasks can become a time-consuming and expensive burden on your operations, particularly when working with contingent and international workers. This is something many smaller companies simply do not have the budget or capacity to do on a scale.
With an EOR, on the other hand, businesses simply pay a flat rate to the EOR for each worker provided, while also getting guidance from the EOR regarding market rates for each geographic area. EOR reporting capabilities can also provide a snapshot of your workforce and their status at any given point, making it much easier to get a reliable workforce overview that helps you understand costs and opportunities.
This is much more cost-effective than hiring additional HR staff to manage the increased workload. This setup allows businesses to scale productivity while keeping operational overhead more manageable, which can increase profitability and stability.
Savings can be allocated to other essential tasks (like marketing) to fuel additional growth. This outsourcing of key operations affecting contingent and international talent also helps your HR team save time so they can focus on higher-level tasks, further improving your overall productivity.
A Truly Level Playing Field
With the help of an EOR, even a small business can make use of global and contingent talent to expand their operations and maximize their growth potential. Improve your sourcing pipeline and level up your top talent experience by engaging an EOR like myBasePay for your contingent workforce placements and their assignments.
Schedule a consultation to discuss your specific needs and explore potential solutions.
