5 Reasons an Employer of Record (EOR) Can Supercharge Your Staffing Firm

As we enter into a remote-focused world, companies know that hiring workers overseas or from other countries can be a meticulous process. Not only must the company comply with several foreign employment and tax laws, but it must also have an established branch office in the foreign market — an expensive undertaking that only adds to the cost of a new hire. 

Fortunately, the Employer of Record (EOR) solution helps eliminate these struggles that come with these recruiting processes. Simply put, an EOR is a third-party company that is contracted by a client to take responsibility for the legal and financial procedures to establish and operate a foreign branch.

This means handling anything from processing and funding payroll, ensuring execution of all necessary withholding and deductions, and meeting other employers’ compliance obligations.

Whether you’re thinking of placing a contract, starting your own company, or looking to supercharge your existing staffing and recruiting firm, here are five reasons you should consider outsourcing an EOR agency. 

1. You’ll Save Time and Money

As most companies know, hiring new employees is a costly process — both in terms of time and money. A study by the Society for Human Resource Management reports that the average cost for a new hire is $4,129, and approximately 42 days to onboard the employee. However, the cost of a new hire located overseas can vary greatly. 

Sponsoring a nonimmigrant employee can cost anywhere from $1,000 to $5,000, according to the Bipartisan Policy Center, not to mention the additional fees paid to attorneys to expedite the process. And that’s just the recruitment cost. Bureaucratic costs, compliance expenses for labor laws, cultural costs, and trade connection costs must be considered, as well. 

On the other hand, hiring an EOR mitigates these costs. When paying for an EOR, their price already includes the necessary taxes to hire a remote worker. Plus, an EOR contractor holds responsibility for submitting taxes for each country, and any penalties or fees due to misfiled reports and documents will be charged to them, not your company. 

Additionally, the time involved with hiring an international employee can be significant. Trying to take care of various hiring-related tasks at once will mean you have to deviate from the company’s core activities. Having a reliable EOR who can take care of these costs and save you time is crucial to successfully onboarding a remote worker.  

2. You’ll Remove Foreign Market Entry Barriers

Building your teams by hiring abroad has a lot of benefits, like an affordable workforce, broadening the talent pool, and expanding workplace diversity. Many companies are hesitant to search for international talent due to the challenges that often come with remotely enrolling a business entity, however.

Especially in countries like Argentina, Ukraine, and India where there’s a high level of bureaucracy, the time it takes for an embassy to approve international business operations can take up to several months. With an EOR, you can remove such global market entry barriers and mitigate risks. 

As an officially registered company that holds a legal right to hire and pay remote employees, an EOR company doesn’t have to worry about facing obstacles along the way. Instead, they can start searching for foreign talent immediately — without the messy barrier of red tape. 

Plus, when hiring a worker abroad, companies can run into a lot of legal trouble if they don’t have a firm grasp of local laws. An EOR agency, however, understands labor and business legislations and will ensure all processes within the company are met. If there is any breach of law, your company is not at risk — the EOR is responsible.

3. You’ll Better Adapt to Your Existing Work Culture

Another considerable perk to contracting an EOR is their assurance on the implementation of your company’s work culture and best practices when searching for and hiring workers abroad. 

Hiring a remote worker is already a challenging process, but integrating them into the company in a way that complies with work culture, values, and mission is another undertaking in and of itself. Since EOR companies integrate on a local level, the hiring, onboarding, and the transitioning process will be much easier and hassle-free — both for you and your new employee. 

Additionally, an EOR can also consult with you about your company’s needs. For example, they can determine whether an independent contractor or full-time employer is a better option for your company according to your company culture and goals.

4. You’ll Streamline Business Expansion Applications

As a growing business leader, expanding your company to foreign markets should be one of your top priority lists. Hiring an EOR lets you quickly and easily hire talent among global markets, without having to experience the hassle of registering a subsidiary. 

Whether your business is large or small, using an EOR agency to hire international talent will also enable you to use HR experts who can cover administrative duties and employment arrangements in a cost-effective manner. Doing so will consequently offer you more time to grow sales before investing in a full-time HR department. 

Plus, whenever concerns or complaints arise among your company’s employees, your EOR agency can take over and serve as an employment consultant, making it easier for your company to focus on corporate goals and missions.

5. You’ll Reclaim Valuable Operation Time

In the case of onboarding any new hire, most HR professionals agree that the time dedicated to integrating an employee takes at least three months. But oftentimes, the onboarding process can extend into the employee’s entire first year. 

This means company leaders must shift their focus from core company projects to transitioning the new hire. And when onboarding a new hire abroad, the integration process can take much longer without the help of in-person training.

Fortunately, by handing the administrative tasks to a trusted EOR company, your business can maintain focus on more important goals, like improving company products or services, developing strategies, and promoting meaningful connections with partners and clients. 

An EOR takes the responsibility for not just hiring a remote employee, but also training them and informing them on expected duties and responsibilities. Thus, it no longer becomes your job to prepare them for work — the EOR agency has done it for you.


Author: Cesar Jimenez, myBasePay CEO
Cesar A. Jimenez is an entrepreneur, investor, and military veteran with over 25 years of staffing industry expertise successfully leading technology staffing organizations. His expertise in the IT industry allows him to use his experience as a thought leader for talent acquisition, staffing, IT, and recruitment technologies with a passion for contingent workforce solutions. Cesar has held various leadership roles for both a global staffing organization and technology solutions companies. This expertise has enabled him to develop alternative workforce models that provide the agility for organizations to be competitive in today’s marketplace. In his spare time, he enjoys spending time with hisfamily, working out, and coaching high school baseball players.

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