There are many financial as well as cultural benefits of building a global workforce. It goes beyond just acquiring inexpensive talent from weaker economies. Your options while hiring increase significantly when you eliminate geographical boundaries. Moreover, having talent from a specific country creates opportunities for your business to explore the market in said country. The Covid Pandemic and the ensuing lockdown has shown us the potential of fully remote workforces. At this point, it is wise to expand your boundaries. There are, however, some challenges – a foreign country comes with its own set of regulations and labor laws that can be hard to navigate. This is why looking for Employer of Record services HR platforms (EOR) should be your first step toward expanding your talent pool beyond your state or nation.
5 things you should expect from an EOR service
Choosing the right EOR service can make or break your plans to acquire talent outside your country. In this section, we’ll discuss some qualities that make an EOR service reliable and beneficial.
Eliminating the need for a foreign subsidiary
Opening up a foreign subsidiary just to manage human resources is a hassle you can definitely forego with the help of an EOR service. The burden of starting a foreign subsidiary is financial, legal, and temporal. The time and resources you lose trying to build a subsidiary can be put to better use for your business. An EOR service like Via can easily eliminate the need for a subsidiary company by taking complete care of HR management.
Global payroll management
Not only should an EOR service run the payroll on your behalf it should also help you design compensation packages for foreign employees based on the employee’s job role, experience, and the local standards while you make the final decisions about the salaries. An EOR should be able to calculate wages, and process benefits, deductions, and bonuses. They also assume the responsibility to ensure that the wages are distributed in a timely manner. The EOR should be able to keep and produce payroll records at all times.
The EOR service you partner with should have its own entity and it should remain compliant with the local laws and regulations. An EOR service should indemnify you if there are any violations of regulations pertaining to employee benefits, labor laws, and whatnot. This helps you expand your talent pool without worrying about country-specific compliance.
Your EOR HR platform should help you scale
The whole point of choosing EOR over a subsidiary business is efficiency of action both in terms of cost and speed. But an EOR service that is bound to a specific location or comes with head-count limitations may not serve you well in the long run. You should look for maximum scalability and flexibility both in terms of number of employees and locations. Your EOR service should accommodate the growing and changing needs of your business over time.
You should retain full control over your IPs
A reliable EOR service writes employment contracts in a way that protects your exclusive right to your intellectual properties across borders. There are different IP related rules in different regions and it’s important to draw the contracts in a way that ensures your unwavering control over your IPs.
Understand the difference between EOR and PEO
This is important as Professional Employment Organizations or PEOs often run as EOR services creating confusion. Both EOR and PEO provide global payroll solutions but there is a key difference between the two. Employer of Record or EOR has its own legal entity which allows you to hire from a country without having a legal entity there. A PEO runs a co-employment model which requires you to maintain a legal entity in the country where you are hiring from. That means, you bear the burdens of compliance and benefits administration.
An EOR service is a perfect solution for small and mid-size businesses trying to expand their horizon without burning a hole through their resources. It’s fast, efficient, and uber effective when it comes to creating an employee hub in a foreign country. The best part is, these services indemnify you in case something goes wrong on their part in terms of handing compliance or employee benefits.