As a business owner, you will likely know the term “Employer of Record” (EOR). An EOR is a third-party company that serves as its clients’ legal employer or Human Resources (HR) and works on compliance. However, if this is the first time you have thought about using one, this blog will explain how it benefits any business. This blog could make you consider having one.
How does an EOR help a business?
Handling a business can be incredibly challenging with all the tasks to keep it going. But with the assistance of an EOR, taking charge of your employees and the company can be more manageable. Getting an EOR can help business owners save money and stay compliant by processing all employees through a single entity instead of multiple transactions. EORs allow you to offshore the responsibility of managing your payroll taxes, benefits, and labor costs to a third-party provider like them.
Benefits of having an EOR for your business
The following are the top benefits that can help you consider getting an EOR:
• It can help you stay compliant and avoid penalties
Businesses can gain reliability and earn customers’ trust by complying with regulations. Companies must meet several compliance requirements to run a business smoothly and legally, whether setting up a new business or expanding an existing one. An EOR can assist your company in processing these compliances, preventing penalties and fines.
• Saves both money and time
By streamlining this procedure, you will save yourself time and money by eliminating unnecessary steps that would otherwise slow down your HR workflow. This also lessens the cost and time spent on compliance issues.
Moreover, there will only be one place where all these records are stored, making them more accessible for the employees to find. This action ensures clarity and reduces issues among the employees. It gives access to organized information anytime without needing multiple sources or asking numerous people across different departments within the company.
• Hiring caliber talents
One of the most critical functions for a company to flourish is its employees. They are the rock that keeps the company going in the market. EORs recruit and hire talent locally or globally without setting up a legal entity. They can employ skills that fit certain positions and qualifications of the company. Lastly, the EOR also handles the contracts of newly hired talents, and they can terminate contracts.
• Ensures the welfare of employees
It is right to give importance to the employees of a business because they are one of its backbones. Through an EOR, they assist the company in giving out the mandated benefits and compensations to the employees. Therefore. It makes them feel safe as they run legally as a third-party employer and HR of the company.
Misconceptions regarding an EOR
Let’s discuss some common misconceptions about EORs:
• Losing control over the employees
The EORs do not entirely take charge of the employees of their client companies. They only do the HR functions to support the company, but you are still in control of running your company as a business owner. The decisions needed are within your hands for the employees and an EOR to abide by.
• It is expensive to get EOR services
Most people may think that acquiring an EOR will cost too much in their pockets. Contrary to this, getting an EOR is cheaper than starting things and building resources from scratch. The services of an EOR reduce overhead costs, which could be more expensive to pay. If you plan to expand globally, the EOR can protect you from the risks and regulations of each country.
• Working with an EOR is not legal
Just like any complying business, EORs are also like that. They are registered by following the requirements for them to run legally. Rest assured that the EOR services also secure the data privacy of their clients under the law. This makes it safe to get the services of an EOR for your business.
EOR is for all business sizes
Consider hiring an EOR service provider today if you are a business owner looking to succeed in tough competition. EORs can cater to the needs of clients and businesses of any size, whether they plan to expand overseas, hire talents, save money from overhead costs, or comply.
Getting an EOR is a win-win situation for any business because of its beneficial services. As a business owner, you want the best for your company; an EOR can help you achieve that. So don’t hesitate to explore hiring an EOR to take your business to the next level.
Frequently Asked Questions (FAQs)
Q1: What is an Employer of Record (EOR) and How Does it Assist a Business?
An EOR is a third-party company that acts as the legal employer or HR representative for businesses. It handles compliance and administrative tasks. EORs streamline employee management, payroll, benefits, and labor costs through a single entity, aiding businesses in saving money and staying compliant.
Q2: How Can an EOR Help My Business Stay Compliant and Avoid Penalties?
Compliance with regulations is crucial to gain trust and reliability. An EOR assists businesses in complying with various legal requirements, ensuring the business operates smoothly and legally. By processing compliance requirements, EORs help prevent penalties and fines.
Q3: How Does Using an EOR Save Time and Money for a Business?
EORs streamline processes, eliminating unnecessary steps in HR workflows, resulting in time and cost savings. Centralized storage of records simplifies accessibility for employees, promoting clarity and reducing time spent on compliance issues. The efficiency gained through EORs aids in cost reduction.
Q4: Can an EOR Help My Business in Hiring Quality Talent?
EORs assist in recruiting and hiring talent locally or globally without the need to set up a legal entity. They handle the entire hiring process, from recruitment to contracts, ensuring that businesses can focus on their operations while accessing a pool of skilled employees.
Q5: Are There Common Misconceptions About Using an EOR for Business?
Yes, there are common misconceptions, such as losing control over employees and EOR services being expensive. However, EORs only handle HR functions and don’t take full control of employees. Contrary to cost concerns, EOR services can reduce overhead costs compared to starting from scratch. EORs are legal and registered entities, and they cater to businesses of all sizes.
Here at One CoreDev IT (CORE), we provide EOR with years of experience in the industry. Our company offers back-office project management and low-code software development talent solutions. We have a reliable and qualified team of professionals with years of industry experience to assist with your needs. Contact us now!
