What is an Employer of Record (EOR)?

When expanding globally, businesses often have a large quantity of obstacles to overcome. To solve most of these challenges, businesses are often told to look to an ‘EOR’ for assistance.

But, writes Simon Duff, global operations director at Leap29, what is an Employer of Record (EOR)? And how can an EOR partner support your organisation with international growth?

What is an Employer of Record?

An Employer of Record (EOR) also known as a Professional Employer Organisation (PEO), provides employee management services including management of employment contracts, taxes, benefits, insurances, visa applications and payroll.

An EOR agency will hire employees directly, acting as a co-employer and supporting operations with employee-related responsibilities while the focus on growing the business can continue undisturbed. The typical core features of an EOR will include support with HR, recruitment, payroll and employee benefits. There are a few additional bells and whistles with this model too, but which only the tip-top EOR partners tend to offer.

HR support is assured

The legal requirements that come with hiring, firing and everything in between requires dedicated time and internal resources that expanding businesses often don’t have.

An EOR can support with a number of human resources tasks including recording paperwork, monitoring employment regulations, recruiting and even providing expert guidance with the potentially tricky business of terminating employment contracts.

Recruitment services

Recruiting top talent can be a challenge for businesses at the best of time. Add in recruiting in an international country, and it can become even more complicated.

Thankfully, a solid EOR partner -- who also provides recruitment services, should be able to eliminate many of these challenges.

As to what else to look out for, experienced EOR providers will likely offer organisations access to their wide network of skilled professionals, a comprehensive candidate-search approach and knowledge of international employment laws. 

They also ought to assist with onboarding new employees, from global mobilisation, employment contracts and integration of the new recruits into established teams within the organisation. 

Paying staff the right amount, first time; on time, all the time

Paying your employees on time and correctly is essential. The more your business expands and the more personnel you employ, the more difficult paying promptly and accurately can become.

A sound EOR partner should step in here too, ensuring workers get paid correctly and on time while fully complying with both local and international legal regulations.

Employee Benefits? Go wide

Employee benefits are a crucial part of attracting and retaining leading talent. Providing company perks isn’t always an easy task, however.

With an EOR engaged, organisations should be able steal an edge on their rivals by getting access to (and management of) a wider range of benefits than just the norm.

When businesses need an EOR...

More often than not, companies choose to work with an EOR partner when they are expanding internationally.

Primarily, this is because working with an EOR means you do not have to setup and launch a legal entity in that region.

Secondly, global expansion can be incredibly difficult with countless procedures and policies to come to terms with. The EOR partner you ideally want will support you with every aspect of global hiring and expansion, leaving the business to focus on business.