There are many similar terms associated with Employer of Record. For example, in China, it’s called FESCO (Foreign Enterprise Service Company). In developed countries like the United States and Europe, EOR is a popular hiring solution for organizations planning to expand their business anywhere. Meanwhile, in Southeast Asia, they may call it a local employer, local partner, back-office staffing service provider, etc.
Employer of Record Solutions in a Nutshell
The Employer of Record is the registered employer of your workforce while you’re in control of your employees’ supervisory and day-to-day duties. It’s an effective solution that handles personnel and back-office functions for employees like payroll processing, tax registration, employment contract creation, social contribution compliance, and other regulatory duties.
Employer of Record solutions are the preferred international expansion tool compared to setting up your local entity.
The Modern Concept of Employer Of Record
For decades, companies have employed recruitment agencies for their workforce requirements. From cleaning their office spaces to major office functions, modern recruitment agencies deliver competent employees to their clients.
Today, as an evolution of these recruitment agencies, Employment of Record solutions expanded to a more cost-effective, efficient, and sustainable approach for international business mobility. In addition, as a single-source service, EOR offers a full range of local employment standards.
Why Do You Need an Employment Of Record?
In this fast-paced business environment, you’re only a few steps away from capturing the most lucrative international markets for your products and services. So you can imagine how this digital transformation turned far-flung prospects to as near as your arm’s reach.
By employing an EOR provider, you can better understand regulatory and compliance roadblocks when hiring your remote workforce and increase your business potential on a global scale.
As you enter a new market equipped with an EOR solution, you don’t need to create a business entity, meaning less work on tedious registration, incorporation, and HR functions.
At its core, the EOR solution is always compliant with any labor and employment laws. Hence, you’ll enjoy the benefit of conducting an enterprise in any country and hiring local talents without any problem.
The Advantages of Employer Of Record
There are countless advantages to using EOR solutions. For example, if you’re expanding your business to foreign countries, EOR will eliminate compliance risk to their labor and taxation laws. Furthermore, you don’t need to create a local corporation. Hence, removing the complexities of immigration, social contribution, and payroll for your remote staff.
Another good thing about deploying an EOR is that you can give your workforce competitive packages, including insurance, pension plans, and other securities that they need.
EOR: The Future of Your International Workforce
Business organizations will inevitably adapt to the changing times and leverage EOR to get their workforce assets. For example, according to studies, 16% of the global workforce is 100% remote, and the growth in remote work in the last 5 years was 44%. So there are fewer boundaries to hire a team abroad. And with the growing digital support, remote staffing has become more popular with modern employees. Eventually, companies are beginning to recognize the importance of diversity-friendly environments with shared culture to tap on skilled talents regardless of their demographics.
If you want to know more about how you can benefit from these HR solutions, especially with Employer of Record; please feel free to contact us and we are more than happy to connect with you today.
Olivia Yu has decades of experience in the Human Resources industry. She’s the Regional Director for Asia Pacific of a famous international HR company. Olivia’s international experience inspires her to write articles about human resources and global staffing.