An employer of record (EOR) is valuable for any organization hiring globally. EORs deliver a range of benefits and services that speed up business expansion while ensuring compliance with the various regulatory requirements in multiple countries.
Recruiting can cost over $4,000 per employee and often takes months to fill open positions. Managing onboarding, administration, and HR tasks in-house is expensive. Add up the cost of multi-country payroll and labor laws compliance, and an EOR makes financial sense for any size company.
An EOR acts as the employer for organizations hiring globally that need to comply with local labor and tax laws but does not want to establish local entities in these countries. Some describe EORs as human resources departments since they free company leaders to concentrate on macro HR functions, project management, and daily operations.
When you hire employees in other countries, you are often required to set up a legal entity to take care of local administration. An EOR already has entities established in multiple locations around the globe and can quickly set up compliant administration for your organization.
An EOR does the following, so you don't have to:
In the meantime, you take care of worker assignments, project development, performance evaluations, and daily operations and duties.
When you need workers quickly, an EOR expedites hiring. For example, Worca has a database of prequalified candidates for nearly any position and level you need. As a result, you can increase your headcount quickly without spending a fortune on recruiting and spending hours in interviews and onboarding.
Most candidates require little training to become productive. They can hit the ground running, so you don't need to worry about missing client deadlines or overwhelming your current team. An EOR also takes care of termination for cause or simply because you need to shrink your workforce.
Employers of record adapt readily to your work culture, a crucial consideration for collaborative teamwork, productivity, and retention. You are not hiring short-term contractors; you are hiring employees who will remain with you, creating a stable organization.
An EOR provides cost efficiency by submitting payroll taxes for their corporate clients and in each country where these organizations have remote employees. Fees typically include total taxes withheld. The EOR is also responsible for any penalties a country may charge for misfiled reports and documents.
Quality employers of record guarantee compliance at all times. Each country has its labor laws and payroll requirements, and it can be challenging for a single organization to keep up. On the other hand, an EOR has the requisite experience in the country of origin for each remote worker to ensure you have no local issues.
The industry average cost for an EOR is $15,000 to $20,000 but varies widely depending on company needs and stipulated tasks. Compare that to the cost of recruiting, onboarding, training, and administering payroll and benefits yourself.
Recruiting takes time and effort, from promoting open positions to reading resumes and applications, interviewing, and making hiring decisions. It could take months to find the right employee, especially if you want to hire overseas.
Once you find a candidate and make an offer, onboarding and training take time and expertise that you may not have. Unless you have the knowledge and experience in global employment administration, there are multiple steps to setting up your new employee and getting them paid on time.
An EOR has a vast database of already pre-qualified employees, and their abilities are already known. So instead of waiting for the perfect employee to find and respond to your advertisement, an EOR searches the database and finds the right employee immediately.
Also, since the EOR already has the necessary legal entities, you can onboard a new employee within a day. The employer of record takes care of all the paperwork. All you need to do is bring the new individual up to speed on assignments and team communication.
Compared to performing all the above functions yourself, employers of record are highly affordable. They streamline hiring and take care of all the back-office administration so you can get on with your work.
For example, Worca charges a flat rate per employee to perform as your EOR. There are no surprises when it comes to vendor payment. Services include secure self-service portals for each employee and administrator. We take care of the delivery of work-from-home equipment or set up a workspace for local employees to gather.
In the process, you enjoy secure document storage with quick access to authorized personnel. We also protect your company's intellectual property and invention rights while providing compliance employment contracts. The list of services goes on and on.
Do the math. Compare the cost of recruiting, onboarding, payroll, benefits, and termination to identify the savings associated with using an EOR like Worca.
