Are you wondering if an EOR is right for your business? Whether you're considering global expansion or struggling with the ongoing skill shortage, there are many instances where an EOR might be the right fit for your company. 

In this article, we're taking a closer look at some of the most common reasons businesses decide to partner with EOR companies and sharing some of the major signs it might be time to consider one for your company, too. But first, let's briefly examine what an EOR is.  

What is an EOR?

So, what is an EOR? Essentially, an Employer of Record is a service provider that can help businesses find, hire, manage and pay employees in different countries without setting up a legal entity. 

The EOR assumes the role of a 'legal' employer for your international workers and is responsible for managing the payroll, benefits, tax and compliance with local labor laws, and other administrative tasks. While the EOR is the legal employer on paper, you maintain complete operational control over your workforce.

It's like the best of both worlds. You get to hire employees from anywhere without having to worry about the high costs or legal and administrative hassles. Plus, unlike outsourcing, with EORs, you maintain complete transparency and control of the day-to-day of your global employees. So, is an EOR the right move for your company? 

12 reasons to consider using an EOR

Now that we've established what an EOR is let's dive into the signs that might suggest your business could benefit from one.

1. You want to expand globally.

When your growth strategy includes international markets, an EOR can be instrumental. They can accelerate your expansion plans by allowing you to hire in your target countries without establishing a local entity. Hiring employees in your target regions allows you to get a foothold in the area without having a physical presence.  

2. You need to fill vacancies.

With record-breaking skill gaps expected to continue, HR managers have the difficult role of filling positions when there aren't always people to fill those roles. EORs allow you to eliminate hiring borders and hire top talent from anywhere, making it easier than ever to fill those vacant roles. 

3. You're struggling to find the right talent.

By expanding your search beyond geographical boundaries, EORs make it easy to find professionals with the skills your business needs to thrive.

4. You want to save money on hiring.

Establishing a legal entity in a foreign country can be expensive and cumbersome. With an EOR, you can bypass these costs and complexities. They handle the administrative burden of managing international employees, leading to significant cost savings. 

5. You want to leverage salary differences.

Speaking of cost savings, different countries have different economies. As such, hiring top talent from other countries can result in lower salaries – without sacrificing quality or worker well-being. By leveraging talent in countries where the cost of living is lower, you can save money on hiring costs while still providing your international team members comfortable wages. 

6. An existing top employee relocates.

If a top-performing employee decides to relocate, it doesn't mean their value to your company has to end. An EOR allows you to continue legally employing them in their new location, managing their taxes, benefits and compliance matters.

7. You have reservations about worker classification.

Employee misclassification can lead to severe legal penalties, especially when dealing with contractors. EORs have the expertise to ensure proper worker classification in accordance with the local labor laws of the countries you're operating in.

8. You lack expertise in employment and tax law in a market. 

Each country has its own intricate set of employment and tax laws. Without local legal expertise, navigating these laws can be a minefield. An EOR possesses the expertise and resources to handle these legal complexities, ensuring your business remains compliant.

9. You don't want to open a local entity.

Setting up a local entity requires a considerable investment and extensive knowledge of the local regulations. An EOR enables you to bypass this process, hiring and managing employees on your behalf without needing a local entity.

10. You want to scale quickly.

Rapid scaling, especially in new markets, can be difficult to achieve while dealing with administrative tasks. An EOR allows you to add new employees swiftly without being burdened by the complexities of international labor laws and tax regulations.

11. You want to protect your IP.

Ensuring the safety of your intellectual property (IP) is crucial when hiring internationally. An EOR helps enforce non-disclosure agreements and similar legal tools, ensuring your sensitive information remains secure.

12. You want transparency. 

Unlike outsourcing, which is notorious for its opaqueness, EORs provide transparency, allowing you to stay in control and in the know of your international employees. 

Get started with an EOR

The 12 reasons above are just some reasons companies turn to EORs for their international hiring needs. Partnering with an EOR allows you to leverage the global talent pool, enter new markets, and save on hiring costs and administrative fees. Unlike outsourcing, EORs keep you in control of the day-to-day. 

Are you showing any of the signs you might need an EOR? If so, Outstaffer is here to help. As a global EOR, we help companies find, hire, manage and equip top talent from around the world in just a couple of clicks. Plus, our #WorkFromAnywhere technology gives your international hires everything they need to thrive. 

Want to learn more? Schedule your demo today

Aug 4, 2023

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