Expanding your business operations overseas is an exciting time. With access to new customers, increasing brand awareness, and tapping into a more diverse pool of talent, expansion is an unparalleled opportunity to increase revenue and grow your business. The benefits of overseas are no secret: we have seen a veritable boom in mergers and acquisitions in the past few years and experts expect that trend to continue.
While the potential rewards are huge, global expansion comes with no shortage of headaches. Especially with human resources. Each new market comes with its own obstacles such as tax regulations, labor laws, visas, and work permits.
To help overcome these challenges, many companies are turning to what’s known as an employer of record. These companies streamline your global HR process so you can go to market faster and easier while ensuring you’re compliant with local laws.
What Is an Employer of Record?
The EOR is a company that functions as the legal employer in the place of another company. The EOR takes on all the administrative work of being an employer: sourcing and onboarding workers, conducting any pre-employment screenings, sending paychecks, managing benefits and taxes, reimbursing expenses, and administering benefits.
This company operates in the background – you’re responsible for managing and working with the employee day-to-day.
Handle International Payroll and Tax
Paying overseas employees can be an HR nightmare thanks to unfamiliar tax payments, cultural norms, and administrative filings. An EOR takes responsibility for all of these tasks, including employee paperwork.
Faster Hiring and Employee Onboarding
The employer of record handles the recruiting and hiring process for building your new local team so you can get your new office fully staffed in a matter of weeks. Many EOR providers include an HR platform including an employee portal, so your new team can get fully onboarded and be ready to work in a few days.
Employee Benefits Administration
As an employer, you want to offer your employees more than just a paycheck by offering a variety of different employee benefits. However, different countries have different regulations regarding non-cash compensation as well as different local customs and expectations. Most EOR companies offer packages to administer benefits such as:
- Health and life insurance
- Company cars or transportation supplements
- Disability insurance
- Retirement contributions or pension plans
Ensure Compliance with Labor Laws
Making sure you’re compliant with the local labor laws is perhaps the biggest risk you take when you hire an international team. Every country is slightly different and language differences make things even more complicated. An EOR functions as a legal expert to ensure you’re in compliance with the local requirements regarding workplace conditions, health and safety, and overtime laws. Working with an employee of record reduces your exposure to risk associated with any violations that may occur.
Manage Contractors and Freelancers
An employer of record will handle all of the tasks and requirements associated with your workers’ contracts, saving your HR team hours of work. An EOR can create a standard contract template applicable to the local laws and customs. It can also ensure any employee termination is done within the bounds of the law and avoids the risk of penalties or lawsuits.
Choosing an employer of record to handle your international expansion is the decision your company can make. By taking HR and administrative tasks off your plate, you can get your new business up and running quicker, easier, and more profitably.
