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Understanding the Role of an EOR in the Gig Economy

Caucasian entrepreneur, businessman, manager working concentrated in office understanding EOR gig economy

The pandemic brought about many changes in various industries, including the widespread growth of the gig economy worldwide. An employer of record (EOR) can play a crucial role in this development. In this blog, we will explore the scope of the gig economy and examine how an EOR can contribute to its success. 

What is the Gig Economy?   

“Gig economy” refers to working where individuals perform temporary, flexible, and often freelance jobs. These jobs can be short-term or part-time, and workers can perform them remotely. 

The gig economy has rapidly increased due to the pandemic and technological advancements. Many employers and workers have transitioned to freelancing and working remotely online. In the United States alone, there are over 57.3 million workers in the gig economy. 

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Image Courtesy master1305

Types of Workers in the Gig Economy   

There are several types of workers in the gig economy. The most common ones include the following: 

  • Freelancers/ Independent Contractors 

People who work freelance or contract-to-contract are part of the gig economy. Companies or clients can hire them to complete specific tasks or projects. Some freelancers choose the work they want to do.  

These people usually work at their own pace and do not usually receive benefits from their employers. They primarily provide services directly to clients instead of working through an intermediary company. 

  • Virtual Assistants (VAs) 

Virtual assistants (VAs) provide remote administrative, technical, or creative assistance to clients, usually from a home office. They are highly skilled individuals who can perform various tasks, such as managing emails, scheduling appointments, bookkeeping, social media management, and content creation. 

Advantages and Disadvantages of the Gig Economy   

Advantages   

The top benefits would be saving time and money. For the employees, being in a gig economy allows them to work flexibly and in multiple jobs. They have the freedom to choose their work, time, and clients. In addition, they do not have to go out and spend time on transportation when they can do the job at home.   

Meanwhile, employers are also free to choose the employees they want to hire. They also do not have to pay for mandated employee benefits such as Health Maintenance Organization (HMO), holiday pay, overtime pay, etc.   

Disadvantages   

In the gig economy, several downsides are affecting employees the most. The first one would be the need for more benefits and compensation. They also need more security when working; some need employers or agencies to protect them. The salary can also be inconsistent since it depends on what is on the table.  

Role of an EOR in a Gig Economy   

An EOR is a third-party company that provides compliance, payroll, and other services to its clients. In the gig economy, EORs can be helpful to workers by offering essential services. Employers should consider partnering with an EOR for their employees. 

  • EORs can give bring benefits to the workers   

These gig economy workers contribute significantly to our economy without having access to mandated benefits such as health insurance through their employers. However, it can be possible for these individuals or some employers to obtain help if they choose to do so through an EOR. 

By partnering with independent contractors, the EOR can offer them additional benefits, such as healthcare coverage, mandated benefits, etc., while ensuring they maintain their status as independent contractors and do not become classified as “employees” under federal labor laws. This allows the contractors to enjoy additional perks and benefits without sacrificing their flexibility and autonomy in their work. 

  • Provides security to both company and its gig workers   

Aside from the mandated benefits, the EOR can also assure security for its clients in the gig economy. They do a background check when hiring gig workers for the company’s safety. Gig workers can also feel safe with the companies they are working with since EORs do legal compliance for the company. Moreover, EORs can keep track of the salaries given out on time to the gig workers as long as the project or contract lasts.   

  • Makes things organized   

The EORs can assist with an organized flow at work, from hiring to handling company employees. They give out the tasks and projects of the gig workers. This action is handy for gig workers to know what to do and communicate at work.  

Key Takeaways   

The gig economy is growing and will continue to do so. As more people enter this new type of job market, understanding the role of an EOR will become more critical. An EOR hires workers for temporary work or projects through platforms. They are responsible for paying taxes, benefits, and other expenses related to these employees’ employment situation while working on projects with clients or businesses worldwide. 


Frequently Asked Questions (FAQs)

Q1: What Are the Benefits of Global Business Expansion?

Global business expansion offers several significant benefits. Firstly, it leads to a substantial increase in revenue by unlocking new markets and customers. Secondly, it provides a wealth of growth opportunities and attracts a diverse customer base, promoting adaptability and learning from unique markets. Thirdly, expanding globally allows businesses to tap into the pool of talents across the world, enhancing their teams and diversifying expertise. Lastly, it adds to stability by spreading risks across multiple markets, ensuring a steadier flow of profits even during economic challenges.

Q2: How Does Expanding a Business Globally Help in Revenue Growth?

Expanding a business globally provides access to new markets, resulting in a significant potential for revenue growth. Operating in more locations means more opportunities to attract customers, thus increasing profits. Additionally, it allows businesses to tap into diverse consumer preferences and behaviors, tailoring their strategies accordingly to boost revenue streams.

Q3: What Role Does an Employer of Record (EOR) Play in Global Expansion?

An Employer of Record (EOR) plays a crucial role in global expansion by managing human resources functions and hiring foreign employees. EORs act as a single point of contact for HR tasks, including payroll, taxes, and employee benefits, ensuring compliance with local laws in the foreign country of operation. This simplifies administrative processes, reduces operating costs, and minimizes the risk of fines or penalties for non-compliance.

Q4: How Does EOR Reduce Costs and Risks Associated with Global Expansion?

EORs help in cost reduction by offshoring payroll and administrative processes, freeing up funds for investment in other business areas. Moreover, EORs assist in risk mitigation by ensuring compliance with local laws and regulations, reducing the risk of fines or penalties. This cost-efficiency and risk reduction are vital factors for successful global expansion.

Q5: How Can an EOR Streamline HR Operations During Global Expansion?

An EOR simplifies HR operations during global expansion by centralizing administrative processes, such as payroll management, across all locations and nationalities. This centralized approach ensures accurate information and timely processing of employee remuneration packages, even without establishing a local presence in each country. It streamlines HR functions and enables smoother business operations on a global scale.


One CoreDev IT (CORE) is an experienced EOR company that offers talent solutions to support the growing gig economy. We provide reliable and quality back-office, project management, and low-code software development talent solutions through our team of professionals. Contact us today for any inquiries and let us help you reach your business goals.

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