The role of EORs in supporting remote work arrangements

Post-pandemic, the world has undergone a change, with remote and hybrid work becoming the new normal for countless individuals and organizations. According to a report by Gallup, 27% of people prefer working remotely, and 53% prefer working in a hybrid setting, but we are here to discuss remote work.

This paradigm shift has been driven by technological advancements, changing demographics, and a global desire for greater flexibility and work-life balance. As remote work continues to gain momentum, exploring the role of Employer of Record (EOR) services in supporting these arrangements is essential. Remote work is estimated to grow by around 25% to over 90 million roles by 2030.

This blog post will delve into the rise of remote work, the benefits of having a remote talent pool, the challenges associated with managing remote employees, and how EORs can streamline and simplify the process. We will also discuss key factors to consider when selecting an EOR and explore how Global Squirrels can assist you in leveraging EOR for an international remote workforce.

The rise of remote work

The COVID-19 pandemic accelerated the rise of remote work. As lockdowns forced people to stay home, many businesses quickly adapted to remote work arrangements. This shift was made possible by advancements in technology, such as video conferencing and cloud-based collaboration tools. According to the American Community Survey (ACS) conducted by the U.S. Census Bureau, The number of remote workers tripled from 5.7% in 2019 to 17.9% in 2021.

Benefits of having a remote talent

Remote work has continued to grow in popularity, with many employees and businesses recognizing its benefits, such as increased flexibility, improved work-life balance, and reduced costs.

Increased flexibility

Remote work allows employees to create their schedules, leading to better work-life balance. This flexibility is especially beneficial for individuals with caregiving responsibilities or other commitments outside of work. A report by Buffer found that about 54% of remote workers cite flexible scheduling as their top benefit. This helps your business get more work done efficiently without the need for additional overtime costs, ultimately boosting performance and cost savings.

Improved work-life balance = more productivity

With commuting eliminated, employees can allocate more time to personal interests and family, contributing to overall happiness and job satisfaction. According to Buffer, 68% of remote workers described their remote work experience as very positive, and 23% described it as somewhat positive. This helps your employees be more productive for your business.

Saving costs

By hiring remote employees globally, your business can significantly reduce overhead costs, such as office space expenses, by eliminating rent, utilities, and maintenance. Additionally, remote hiring removes the need for costly relocation packages while expanding your talent pool beyond geographical boundaries. Streamlining the recruitment process, remote hiring cuts down on job posting, travel, and recruitment service costs, giving you access to a global pool of skilled professionals from regions with lower living costs. This not only shortens hiring timelines but also reduces overall recruitment and salary expenses.

Challenges related to remote employee management

Lack of dedication from your freelancers

Freelancers may not be as dedicated to your business as they have the flexibility to exit projects without notice, potentially leaving you with wasted time and resources invested in their training. Additionally, since freelancers often work for multiple clients at once, it becomes harder to track the hours they dedicate to your project and the tasks they complete, making it challenging to ensure consistent productivity and focus.

Tracking productivity

Monitoring work output can be challenging without direct oversight. Managers may struggle to gauge productivity levels and ensure accountability, leading to concerns about whether employees meet their objectives.

Complex country-specific leave management

Managing leave policies across multiple countries can be a complex and time-consuming task, with varying legal requirements in each region. Ensuring compliance with local leave laws while maintaining consistency across your organization can create significant challenges. Failing to meet these legal standards could lead to non-compliance risks while navigating customized policies to fit both company and regional needs can add further complications.

How does an EOR simplify global remote hiring?

An Employer of Record (EOR) significantly simplifies global remote hiring by managing the complexities associated with international employment.

Simplified compliance and legal framework

• Legal employer role: An EOR acts as the legal employer for remote workers, which means it assumes all employment-related responsibilities, including compliance with local labor laws and regulations. This alleviates the need for companies to establish legal entities in each country where they hire, thus simplifying the hiring process significantly.
• Local expertise: EORs possess in-depth knowledge of local employment laws, tax regulations, and compliance requirements. This expertise minimizes the risk of legal issues and penalties that could arise from non-compliance, allowing companies to focus on their core operations rather than navigating complex legal landscapes.

Streamlined payroll and benefits management

• Payroll processing: Managing payroll for employees in different countries can be complicated due to varying tax laws and currencies. EORs handle payroll calculations, ensuring timely payments and proper tax withholdings, thus reducing administrative burdens and errors.
• Benefits administration: EORs also manage employee benefits according to local standards, ensuring that remote workers receive appropriate compensation packages that comply with regional norms.

Efficient recruitment and onboarding

• Rapid hiring: EORs streamline recruitment processes by handling job postings, candidate screening, and interviews. They can quickly identify and hire suitable candidates for businesses looking to expand internationally.
• Onboarding support: Once candidates are hired, EORs facilitate a smooth onboarding process by managing necessary paperwork, contract generation, and compliance checks. This ensures that new hires are integrated into the company efficiently and effectively.

Cost efficiency

• Reduced overhead costs: By using an EOR, companies can avoid the costs associated with setting up local offices or hiring local HR teams. This includes savings on legal fees, office space, and administrative expenses related to managing a workforce directly.
• Flexibility in scaling operations: EORs allow businesses to scale their workforce up or down easily in response to market demands without the need for significant investments in local infrastructure.

Factors to be aware of before choosing an EOR

When selecting an Employer of Record (EOR), it’s crucial to be aware of several factors that could impact your decision.

1. Compliance and legal risks

• Understanding local laws: EORs must navigate complex local and international labor laws. A lack of knowledge in this area can expose your business to legal risks, including penalties or license revocation if compliance is not maintained.
• Monitoring changes: Regularly review local regulations to ensure your EOR adapts to any changes promptly, as failure to do so can lead to significant repercussions.

2. Pricing transparency

• Beware of hidden fees: Ensure that the pricing structure is clear and comprehensive. Hidden costs can undermine your budget and lead to unexpected expenses, which may derail your cost-saving goals.
• Evaluate total costs: Look beyond the base fees and consider the total cost of services, including setup, taxes, and any potential termination fees.

3. Quality of service

• Avoid providers that cut corners: If an EOR prioritizes speed over quality—such as rushing onboarding processes or relying too heavily on automation—this can compromise employee experience and compliance.
• Customer support: Assess the availability and responsiveness of customer service. Efficient support is critical for resolving issues that may arise during employment.

Choosing Global Squirrels as your EOR for managing a global remote workforce

The Global Squirrels staffing and payroll platform helps your business by handling all aspects of staffing and HR functions, such as managing employee productivity, payroll & benefits, and compliance with local and international labor laws.

Hiring remote talent globally

Global Squirrels provides access to a pre-vetted talent pool from countries like India, Mexico, Georgia, Nepal, Pakistan, Sri Lanka, Canada, the USA, and the Philippines. Our platform sources candidates based on your job requirements, allowing you to interview and finalize the right fit.

Streamlined onboarding and payroll

Global Squirrels handles all aspects of employment, including onboarding, payroll, taxes, benefits, and expenses. Our platform ensures full compliance with local labor and tax laws. You simply pay a monthly subscription fee and the salary of the professional, and our platform takes care of the payroll, benefits, compliance, etc.

Avoiding entity setup hassles

Using the Global Squirrels platform eliminates the need for you to set up a local entity in the employee’s country. Our platform acts as the legal employer for your business, managing all HR responsibilities such as payroll, benefits, compliance, offer letters, etc. This saves you a significant amount of time and cost of establishing an international office and HR department.

Compliance and risk mitigation

Global Squirrels prioritizes compliance with local laws and employment regulations. Our platform proactively addresses complexities around labor laws to mitigate risks like employee misclassification. This ensures your international remote hiring is fully compliant with employment laws.

Orange Plan and Purple Plan: how do they work?

With the Purple plan, our platform assists you in onboarding the candidates you have already sourced beforehand. Our platform takes care of all HR-based tasks, such as sending them the offer letter, complying with local labor laws, and managing payroll & benefits. By choosing the Purple plan, you can seamlessly hire professionals who are dedicated only to your business without any administrative burden.

Our platform assists you in finding and hiring professionals with our Orange plan. This ensures that the professional meets all your job specifications. This is done by pre-screening candidates and conducting background checks before sending you curated profiles on the Global Squirrels platform within 2 to 5 working days. Once you have chosen potential candidates, our platform will schedule an interview at a time convenient for you. After you select the right professional, our platform will onboard the talent and take care of the HR, payroll, and benefits while ensuring zero compliance risks.

Request a demo to know more about how our platform can support your remote work arrangements.