Introduction
An EOR or Employer Of Record provides extra assistance that helps you hire, manage and pay employees in other countries. In other words, it enables you to hire employees from different countries where you do not have a legal organization to take care of such matters. The EOR Service Providers help you handle such problems as payroll benefits, taxes, etc.
The significant benefit of such service providers is that they let companies extend their base into multiple countries. It saves them the cost of setting up a whole new organization. All the small and even some big companies are opting for EOR Service Providers.
3 Types of Working Models Followed By EOR Service Providers
The general rule of extending into another country is to set up a base there. It helps to follow all the regulations and compliances of that country. But the EOR Service Providers have taken it for a spin altogether. They follow three models through which they help companies. These three models are as follows:
Direct model
In this model, the EOR Service Providers must set up an organization in another country. They hire within the same country. They even stay compliant with all the rules and regulations of the said country. For example, a French organization will hire a French person to do the task.
Indirect Method
The company does not have to set up a base or organization in another country in this method. They create a subcontractor with one of the local service providers there. For example, EOR Service Providers will team up with a local service provider in Italy to hire Italian employees. It is one of the most opted-for methods nowadays.
Hybrid Model
As the name suggests, this model uses the elements of direct and indirect models. They either hire with the help of local service providers or directly set up an entity there. It gives them the free hand they need to exercise all the benefits of the EOR services. They can choose any method they wish, depending upon their needs.
It is essential to keep in mind that there are very few EOR services that offer the three models. Those who wish to explore it must contact the right one. It can save them money. Some EOR providers specialize in a specific model. It is essential to check the status of a service before opting for it.
How Are EOR Service Providers Altering The HR Game?
As the world is changing, EOR Service Providers are becoming more relevant. The whole employment scenario is transforming at a higher pace. Companies require flexible employees. As the need for it increases, so does EOR providers’ impact. It is doing what any HR department of a company does. Instead, it serves more and can do more than an HR department can. Some of the significant benefits of the EOR service providers that are altering the HR game are as follows:
Flexibility and Agility
The EOR Service Providers undoubtedly provide companies with a lot of flexibility. It lets them outsource all of their employment burdens to another entity. By doing so, companies can focus on what is more important for their business growth. It even helps them keep track of all the changing market conditions. With the extra scope left for companies, they can not focus on how to keep up with the changing state of the market.
They take care of not only hiring someone. They even take care of all taxes, payroll, etc. These can even be structured at the convenience of the employees. It can even help companies get hold of all the best talent available. They can structure a package that would be attractive to the employees.
Access to top talent
There are several talented people available on the market who are now choosing freelance work. They have all the right skills and are competent enough. The EOR Service Providers find such talents and try hiring them with attractive salary packages. For example, they structure a package that gives them the amount of full-time employment. They even add all other perks and benefits. It includes health insurance, retirement plans, etc.
Some EOR providers hire employees and manage their payroll. They even provide them with the necessary training to develop their skills.
Decrease in risk and compliance
The laws of employing a person are constantly changing. It can be complicated to stay updated with changing rules and regulations. When companies higher different types of workers, they sometimes face compliance risks. They meet all sorts of hazards, such as misclassification of workers, tax liabilities, and more. The EOR companies help determine whether all the rules and regulations are followed. They adhere to each of the laws and take steps accordingly. It saves the companies a lot of money and legal punishment as well.
Saves Money
It is obvious now that EOR providers help companies save money. When companies outsource tasks, they are left with enough scope to focus on their core purpose. They can save time and cost by reducing their administrative burden. EOR providers can even easily streamline all their HR tasks. They can even save the money companies would have spent on an HR department.
5 Best EOR Service Providers
Insource India
This company is one of the EOR Service Providers that help people hire employees in other countries. They offer their service to the Indians only. Other foreign countries can take their help to hire from the Indian talent available in the country. They focus mainly on their clients. They let their client have complete control of the operational methods. Insource even have a say in the hiring process.
They even let the companies or the client decide the employee package. Insource can even send out rewards to the employees they hire directly. They offer a wide range of services. Insource offers wholly executive workspaces. They help foreign companies set up a whole new entity in India. Insource even provide vendor management. They even help companies with their registration.
MME
The best part about this company is that it extends services all over the globe. You can hire an employee anywhere in the world with the help of MME. Most specifically, they are known for giving access to the best talent available in India. They can get companies access to the top-tier talent available here as their EOR Service Providers. They offer various services. It includes PEO services, payroll outsourcing services, EOR services, etc.
The most defining aspect they have displayed on their main page is giving access to the local talent available in India. Any company from anywhere in the world can now get hold of Indian skills with the help of service providers such as MME. They even let companies carry on with their Executive search. In other words, it gives them access to the workforce and prominent positions such as managerial positions. You can even have a remote employee with the help of EOR providers. The services even have opportunities for those seeking out jobs.
NH Global Partners
The company extends its service or acts as an EOR service provider in more than 180 countries. It has been able to manage the staff and their payroll systems in these countries and continues to do so. It can create employment contracts that comply with all these countries rules and regulations. They even have an automated platform that helps them efficiently manage the payroll of the staff they employ.
The most fascinating aspect of the company is that it can easily eat your employees within a day. It is one of the most compelling features that make it stand out. They are even known for providing benefits and packages to employees of a specific country. NH Global can also create packages that are suitable for that country. They even care for health benefits considering the country the employee belongs to. Further, they entered payroll in over 180 countries and even paid their taxes. They also help companies stay compliant with all the local and labour laws within that country.
Remunance
It is one of the most suitable options for companies expanding their base in India. On the website, this company claims to be one of the most efficient options available as an EOR service provider. They ensure that each company that wants to expand into India can have a smooth experience. Their services are also very cost-effective, making them a reliable source.
They can take care of all services starting from talent acquisition. Their Organization even offer infrastructural support, which many EOR Service Providers still need to do. They have been in the field for a long time and have all the networks necessary to benefit a company. Moreover, they have all the essential skills and an experienced team that can efficiently carry out all the tasks. With such a wide range of options available, it can cater to the needs of any company that opts for it.
HUSYS
HUSYS is a company that considers its clients’ specific needs. It is a one-stop destination for all those who wish to hire from other countries and expand into a re horizon. They can select the best candidates for any job the companies want to employ. They can even get you a temporary workforce for the specific period a company requires.
It does not mean they compromise the quality of the selected workforce. They choose the top talents available. They even stay entirely compliant with a given country’s rules and regulations. It opens up new scope to generate more revenue.
Why Do You Need EOR Service Providers?
There are multiple reasons by EOR Service Providers have become essential today. These services help people save a lot of time and energy. The HR activities at any company require a lot of precision and caution. It is a burdensome task. By outsourcing such studies, the companies are left with more resources to focus on their primary duties.
The EOR Service Providers ensure that the company stays updated with the recent Employment rules and regulations changes. They provide that they keep the companies out of any risk. EOR Providers keep up with all the legal compliance on behalf of the company. They have a professional and skilled team who manages the company’s data.
EOR Providers even keep it up-to-date at all times. The EOR providers have become necessary for all small and medium companies. It has saved them the effort of setting up an entity in a new country. It can be a tedious task that demands a lot of money.
What is the cost of hiring EOR Service Providers?
It is difficult to say what a particular EOR service provider would ask. But it is essential to know that there are different types of rates. Those are flat rates and percentage rates. In the percentage rate method, the service providers gain their fees from the salary packages. It is an efficient method for all those companies with a small workforce or team. It can work efficiently for a while. But once the companies start hiring more, it gets complicated.
For example, when companies hire more talents that require better packages, the fees of an EOR service provider can get high. It can make the company pay more than what is essential. But this was one of the industry standard tags everyone followed. But with time, people shifted to flat rates because it is more affordable.
Companies only have to pay per employee when they opt for flat rates. Typically, EOR Service Providers ask for $250-$500 per employee. It is based on the requirements of demands of the employees. Although it may seem more costly now, it is a better future investment. When you know the exact price you must pay, you can manage your budget more efficiently. It gives you the scope to manage it better and utilize it properly.
Advantages of Hiring EOR Service Providers
There are several advantages to hiring EOR Service Providers. These are as follows:
Get hold of global talent available
Companies have teamed up with EOR Service Providers. It has helped them get cess to the local talent available. This gives them access to a lot of the talent available globally without searching for it independently. It can allow them to get hold of all the resources and use them to their benefit.
Lessening administrative burden
By hiring an EOR service, companies do not have to take care of the payment of their Employees. The services take control of everything, including taxes, benefits, and more. They even ensure maintaining the interest of the employees by giving them perks. They even let companies have the chance to utilize their resources better and focus more on their growth.
Compliance with local regulations
Hiring employees from different countries can take a lot of work. It demands a lot of precision, caution, and even a lot of money. It requires companies to stay relevant to all the local laws. They must also ensure all the labour laws and hiring policies while hiring an employee from another country. The EOR Service Providers do it all. They help companies take care of the legal obligations of other countries as well. It ensures that the company follows all set rules and regulations that can result in legal trouble. For example, companies need to stay up-to-date with the tax employment laws.
More flexibility
It gives companies the flexibility they need to operate efficiently. For example, companies can even hire people on a contractual basis. They can get employees for the term they need. It is more beneficial for those companies that yield high benefits during a particular season or time of the year. They only have to lay the employees for their tasks and the period they achieve them.
Payroll and Benefits Management
Another significant benefit is that it helps companies handle all the payroll and benefits management. For example, they address all the payment-related issues as well. They even pay the taxes and ensure they give the employees convenient perks. Apart from that, they even provide them with access to all the local packages and benefits. It includes health insurance, retirement plans, and more. It helps maintain enthusiasm and productivity in the workplace.
Myths About EOR Service Providers
Although the EOR Service Providers are of immense help, some concerns still surround it. These are some myths that need to be busted. But some of these myths are given below.
It is expensive
Some people think it can be a costlier option. They think so because they feel hiring a different organization will be more expensive. It is so because they think adding one more entity to your daily processes can demand much money. However, the truth is that it costs less money than what you would have spent on an HR department.
Company Size
Mini companies must analyze whether they are small or big before opting for an EOR service provider. But any such services get out to all sorts of companies. They can provide services to a company with less than 30 members. They can even be of help come to companies with more than 100 members.
It can confuse Employees
Many employees feel that opting for such services can create confusion among Their employees. They think that most employees do not like any change in management. Employees fear that it can disrupt order and peace within the company. However, it can demand some time to get adjusted to the changes. The employees will soon realize that it benefits them and will quickly grow used to it.
Limited Services
Companies feel that the services they can avail of from it are minimal. They will overview a particular aspect of the HR department. They think these services will only review some Employment rules and regulations. However, the current proof suggests something different. The EOR Service Providers have been of help to companies with no HR department. They undertake all tasks, from hiring employees to onboarding and paying their payments.
Challenges Of Hiring EOR Service Providers
There are specific challenges that come while being an EOR service provider. It is also essential to take them into account. Some of these are stated here. In some countries, hiring staff for a specific period is only possible. After the period, the company can no longer retain the employee. In many countries, a company can keep an employee for almost eighteen months only and not more than that.
Although all the employees are under the company’s control, there are some instances wherein the EOR Service Providers have to take action. In such cases, the effort these services take may need to be in sync with the system of the client company. The service providers may take a lot of time to implement the actions or steps against the employees.
In some circumstances, a company does not only need staff from other countries. They also need to carry out various other tasks. It includes entering into supply contracts under local law, applying for government subsidies, and more. This cannot be done with the help of our service providers. It requires the company to enter the market itself.
How to Hire One Of The Best EOR Service Providers?
It is essential to consider all the dos and don’t before you hire an EoR service provider. Some of these are as follows:
Look at the company’s reputation:
It is essential to look for services that have already made a name in the same field. To do so, you can consider all the customer testimonials available. It will inform you how efficient a service is. It will also shit light on all the drawbacks or limitations of the services. Choosing EOR Service Providers with a reputation in the market and who have been in the field for a long time is essential.
Direct or Indirect
There are two distinct types of EOR services. You must ensure that you choose a service provider that offers the model you want to opt for. If you wish to hire from other countries without setting up an entity there, then the indirect model is for you. If you want to check out the local talent available and the rules and regulations of the country by yourself, then the direct model is the right one for you.
Experience
Choosing service providers with experience in this field is essential. You must select the one in this business for a long time and nose all the do’s and don’ts. They will help you stay updated with all the rules and regulations. They will have a depend knowledge of it all that any new company.
Support Service
The EOR Service Providers offer essential support services. But some companies may need more or even less than that. It is necessary to choose one that suits your needs. In other words, you must first analyze the services you need. Then you must ensure that your selected services cater to those specific needs. They must also extend support to the employees they hire. The EOR services must be beneficial for both the company as well as the employees. It will help maintain productivity in the workplace.
EOR Services Vs AOR Services
Employer of Record (EOR) and Agent of Record (AOR) services are designed to help businesses expand their workforce internationally. However, there are some critical differences between the two services.
Employer of Record
EOR Service Providers act as the legal employer of your employees in a foreign country. The EOR is responsible for payroll, taxes, benefits, and compliance. This can be a significant advantage for businesses expanding into new markets, as it allows them to avoid the time and expense of setting up a legal entity in each country.
Agent of Record
An AOR is a company that acts as a liaison between your business and your independent contractors. The AOR is responsible for timekeeping, payments, and taxes. An AOR can be a good option for businesses that use a lot of independent contractors, as it can help to simplify the management process.
Key Differences
The main difference between EOR and AOR services is that EOR Service Providers are responsible for all employment-related tasks for your employees. At the same time, an AOR is only responsible for the tasks related to independent contractors. This means that an EOR can be a more comprehensive solution for expanding internationally, as it can help them comply with all local employment laws. However, an AOR can be a more cost-effective option for businesses that use a lot of independent contractors.
Conclusion
EOR Service Providers have become essential for many companies. Although most small and medium companies opt for it now, many big ones are even trying it. It can be of benefit to any company that goes for it. EOR Providers can help them create a future in their vision for their company. It can save the client company a lot of time and effort.
The changing times require modification in every department. It requires companies to be more efficient than ever. If they keep up with the changing trends, they will stay caught up and retain the competition in the market. With the help of EOR Service Providers, any company can attain its desired goals.