Why EORs are essential for global expansion?

Expanding your business overseas can be a significant challenge if you lack proper knowledge of global laws. Additionally, setting up entities overseas can have high costs, and hiring can be less cost-effective, especially if you operate a small-and-medium-scale business (SMEs).

In this blog, we will discuss what an EOR is, what is the role of an EOR in global expansion, what are the benefits of working with an EOR, what factors you need to consider before selecting an EOR, and finally, how Global Squirrels’ unique EOR solutions make it your top choice.

What is an EOR?

An Employer of Record (EOR) is a solution provided by a third-party organization that allows you to hire talent from across the globe. The EOR also acts as your local legal employer and handles all your legal and compliance requirements so you can focus on your business without any hassle.

EORs can eliminate any need to establish your legal entity in a different country. This partnership saves you resources like time and money while ensuring local expertise and compliance throughout your hiring process. This allows you to hire and pay employees without a hassle.

What roles do EORs play in global expansion?

As mentioned above, EORs help you manage a number of HR functions that include payroll, taxes, benefits, and compliance for your business. However, there are specific duties that EOR performs for global expansion.

Onboarding employees locally

A primary responsibility of an EOR is helping you onboard your chosen candidate in their local area. This involves administrative tasks such as drafting employment contracts, conducting background checks, and setting up payroll. A seamless onboarding experience helps create a positive impression of your company, enhancing employee engagement and productivity from day one.

Simplified payroll in local currencies

EORs simplify paying employees in their local currency, minimizing exchange rate risks and reducing administrative complexity. This service is especially valuable for businesses with a global workforce, as it ensures timely payment in each employee’s preferred currency.

Administering employee benefits packages

When it comes to benefits, EORs handle the administration of employee benefits packages. These can include healthcare and retirement plans, as well as other perks, all while ensuring compliance with local regulations.

Managing tax withholding and filing

EORs also handle tax withholding in accordance with each employee’s local tax laws. This reduces the risk of compliance issues and ensures taxes are accurately paid. Additionally, they file the necessary tax forms, covering income tax, social security, and unemployment taxes, helping companies avoid penalties and stay in line with regulatory requirements.

Ensuring compliance with labor laws

Finally, EORs help businesses stay compliant with constantly evolving labor laws. Local regulations regarding wages, overtime, leave, and other employment matters can change frequently, making it challenging for internal HR departments to keep up. EORs alleviate this burden by staying up-to-date with labor laws in each region where you have employees, ensuring your business remains compliant.

Factors to consider when selecting an EOR

When selecting an EOR for global expansion, there are several factors to consider to ensure that the chosen provider aligns with your business needs and can effectively manage your international workforce.

1. Geographic reach and expertise

The EOR should have a robust global presence and deep knowledge of local labor laws, regulations, and cultural nuances in the countries where you operate. This expertise is essential for ensuring compliance and navigating the complexities of international employment.

2. Compliance and legal expertise

A reputable EOR must possess strong legal knowledge and stay updated on changes in labor laws across different jurisdictions. This helps mitigate risks associated with non-compliance, which can lead to legal issues and financial penalties.

3. Range of services

Different EORs offer varying levels of service. Some may focus solely on payroll and compliance, while others provide comprehensive HR services, including benefits administration and recruitment. It’s important to choose an EOR that can meet your specific operational needs.

4. Reputation and experience

Research the EOR’s track record by looking at client testimonials, case studies, and industry reviews. A well-regarded provider with a history of delivering high-quality services can be a reliable partner for your business.

5. Pricing structure

Understanding the EOR’s pricing model is crucial. Some providers charge a flat fee, while others may have a more complex structure with potential hidden costs. Transparency in pricing helps avoid unexpected expenses and fosters a trusting relationship.

Why Global Squirrels is your top choice for EOR solutions

By partnering with the Global Squirrels staffing platform, you can onboard the employee of your choice seamlessly. This ensures that you face no challenges, such as paying high markups, non-compliance with local and international labor laws, a lack of commitment to your projects, and more. Global Squirrels addresses all these challenges as follows:

• The Global Squirrels platform does not charge any markups, which are often charged by staffing agencies. This allows you to save up to 20% on your hiring process, ensuring you attract top candidates by offering them high pay. Our platform only charges you the monthly payroll cost and a flat fee.
• Global Squirrels acts as your legal entity and ensures you do not face any legal risks. Our platform does this by prioritizing laws and addressing the changes that may need to be taken. Our platform analyzes factors that could be improved and works on those laws. With our EOR solution, you can ensure all employment laws will be adhered to. For instance, if you are hiring from the Philippines, all international and national laws will be handled, such as the W-8BEN form that must be submitted to the IRS.
• With our platform, you can also convert any of your existing freelancers to full-time employees to prevent sudden departures without notice. Global Squirrels addresses the challenge of hiring undedicated professionals through the Purple and Orange plans. Our platform will send a proper offer letter that includes clauses related to the scope of work, timelines, and exit conditions, securing the professional’s commitment to working exclusively for your business without any issues or interruptions.

Let us discuss the Purple and Orange plans a little more.

Our Purple plan best suits your business if you already have sourced a candidate but find onboarding challenging. By choosing our Purple plan, you get to onboard the candidate by allowing our platform to act as your legal representative. This is done by adhering to all the local and international labor laws, managing your employee’s payroll, benefits management, and generation of offer letters along with the agreements.

Under our Orange Plan, our platform will find and hire a candidate based on your job requirement, and also manage their HR, payroll, and benefits. By choosing this plan, you can rest assured that you will have a candidate who aligns with your business needs and goals. Our platform will share the curated profiles of the best-matching candidates with you on the portal. From there, you can choose which candidate you want to interview and after you have selected a suitable candidate, we will onboard him/her while ensuring 100% compliance and zero employer risks.

Are you ready to simplify your hiring process? Make things simpler for you by requesting a demo today!