How can we use EOR for workforce management?
Managing a diverse workforce in today’s globalized business landscape can be complex. Traditional employment models are typically limited to what modern businesses such as yours with multiple countries of operations require. This is where Employer of Record (EOR) solutions are the most useful.
An EOR provider such as Global Squirrels can streamline your workforce management and let you concentrate on your core business activities. Having the right awareness of the benefits and capacity of EOR solutions allows you to use them to the maximum to optimize your workforce and meet your business goals.
In this blog, we will discuss the concept of Employer of Record (EOR) and how it can be used to manage your workforce. We will also explore when EOR solutions make sense and what the benefits of working with an EOR vs. traditional staffing agencies are. Finally, we will delve into how Global Squirrels help you manage your workforce with our EOR solution.
What is an Employer of Record?
An Employer of Record (EOR) is a third-party organization that acts as your legal employer. In this arrangement, you can hire employees in numerous jurisdictions without needing to establish any legal entity in those jurisdictions. The EOR handles all responsibilities of your business with respect to compliance with local labor laws, payroll processing, tax obligations, and benefits administration.
When do businesses need EOR solutions?
Businesses often need Employer of Record (EOR) solutions under specific circumstances that can significantly enhance their operational efficiency and compliance.
Limited internal resources
Small and medium-sized businesses (SMBs) frequently lack the dedicated staff and expertise necessary to manage payroll and HR effectively. EOR solutions offer access to specialized HR functions without the need to hire new professionals and train them.
Complex payroll and HR processes
With company growth comes the complexity of payroll and HR, including a multitude of pay rates, payroll and compliance laws with a host of regulations, and performance management. EORs can facilitate these processes, being accurate and compliant with changing laws.
Geographic expansion
When you enter new regions or countries, you must overcome different labor laws and tax regulations. EOR solutions eliminate the process by handling local and international compliance issues, allowing you to hire professionals without creating a legal entity in the new location. It is especially attractive for those who want to establish themselves quickly in foreign markets.
Risk mitigation
EOR solutions give you a way of mitigating risks of worker misclassification and compliance violations. They make sure employees are classified correctly under local laws to avoid costly legal issues.
Talent acquisition in a competitive market
For markets with skill shortages, international talent can be a strategic advantage in hiring. An EOR enables you to hire skilled employees abroad without the cost and complexity of creating a local entity. This is especially advantageous for those who want to validate market expectations before committing fully to a new region.
What is workforce management?
Workforce Management (WFM) is defined as forecasting labor requirements, scheduling staff, and managing employee performance. The aim is to provide enough qualified employees at the right time to fulfill organizational needs. WFM was initially developed in call centers and has since expanded into retail, healthcare, and manufacturing.
Key Components
- Employee scheduling: Automating the scheduling process to match workforce availability to your business needs while factoring in vacations and high-demand periods.
- Time tracking and attendance: Monitoring employee hours worked to keep track of payroll purposes and prevent violations of labor rules.
- Forecasting: An analysis of historical data to predict future labor needs predictions based on expected workloads to budget or resources allocated.
- Performance management: Measuring employee performance metrics to determine high-performance areas that need improvement and set the highest productivity level.
- Compliance tracking: Ensuring adherence to labor laws and regulations, thus minimizing legal risks associated with workforce management
Three benefits of working with an EOR?
The use of an Employer of Record (EOR) offers several key advantages for businesses looking to expand internationally.
1. Simplified global expansion
EOR solutions simplify the process of new international market entry. As a legal employer, EORs take care of all compliance, HR and legal responsibilities for new hires, freeing companies to concentrate on their core business objectives rather getting mired down in administrative complexities.
2. Cost reduction and efficiency
Utilizing an EOR can significantly cut down on the costs of setting up a local entity. An EOR offers you a cost-effective way of avoiding substantial upfront expenses, such as registration fees and legal costs. It makes for a more predictable cost structure and takes the financial pressure off.
3. Increased compliance and risk management
International labor laws can be challenging to navigate, making it full of risks. EORs guarantee compliance with local employment regulations, labor laws, and tax obligations, minimizing the adverse effect on your business resulting from non-compliance. This allows you to enter new markets without hesitations.
The role of EOR in workforce management
Employer of Record solutions has become increasingly significant in modern workforce management, particularly as you may want to expand globally and seek to navigate through complex legal landscapes. EORs serve as third-party organizations that assume legal responsibilities for employees, allowing you to focus on their core operations while ensuring compliance with local laws and regulations.
Three essential functions of EOR in workforce management
1. Risk mitigation and legal compliance
EORs are an essential part of ensuring that your business is in compliance with all the labor laws and tax regulations in a range of jurisdictions. It helps you manage the complexity of employment contracts, worker classification, and compliance with local and international labor laws, reducing the risk of legal disputes and penalties for non-compliance. Assuming these responsibilities frees your business to expand into several countries without the expense and time required for you to set up local entities.
2. Payroll and benefits administration streamlined
EOR solution helps you take care of salary payment, tax withholding, and benefits administration. This means that employees get paid correctly and in a timely manner, and you do not face the hassle of managing payroll issues. This also gives you access to competitive benefits packages that comply with local regulations that will increase employee satisfaction and retention.
3. Flexible Workforce Solutions
Features such as flexible staffing solutions, which allow you to increase or decrease your workforce according to your project needs or market conditions, make EORs an appealing option. It is also beneficial for you if you require changes from time to time
EOR vs. staffing agencies
Understanding the differences between an Employer of Record (EOR) and a staffing agency is essential for businesses looking to optimize their workforce management.
Definition and role
EOR: An EOR is the legal employer for employees and is responsible for all employment-related duties, such as payroll, benefits, compliance with labor laws, and tax responsibilities. The companies can hire employees in regions where they do not have a legal presence because of this arrangement.
Staffing agency: Staffing agencies are in the business of finding people for employment. They are in charge of the recruitment processes, from announcing the job openings, to screening candidates, to conducting preliminary interviews. After this, the final hiring decisions are taken over by the client company.
Risk management and compliance
EOR: One advantage of using an EOR is its knowledge of compliance with local and international labor laws. EORs take on the responsibility of employment issues, cutting down on risk to companies that may not be aware of local regulations.
Staffing agency: Staffing agencies help, however, with some compliance, but they do not have the same level of liability as EORs. They are focused more on recruitment than on ongoing employment management.
Control over employees
EOR: The EOR maintains higher control over employment terms, including setting policies and handling disciplinary actions. Although technically employing workers, the EOR works for the client.
Staffing agency: When companies work with staffing agencies, they keep control over daily operations. This is beneficial for short-term or project-based roles because staffing agencies are directly responsible for overseeing work assignments and performance.
Cost structure
EOR: EORs typically operate on a subscription or service fee model, which can be more expensive as it provides more comprehensive services. However, for companies that need to hire multiple employees or expand globally, this can be a cost-effective route.
Staffing agency: Staffing agencies generally charge a placement fee representing a percentage of the employee’s salary. It is a more affordable model for hiring lower-salary positions or quickly filling temporary roles.
How does Global Squirrels help you with EOR solutions for your workforce management?
Global Squirrels is a staffing and payrolling platform that provides you with an Employer of Record (EOR) solution by offering you an automated workforce management that includes payroll, performance, benefits, tasks & timesheets, and compliance with local and international labor and tax regulations.
The hiring process at Global Squirrels
Our platform allows you to hire top talent by ensuring you have complete control over the hiring process. How, you may ask?
This is done right after you sign up and choose the Orange Plan. You will be asked to fill out sections where the job role, job description, and employment type (full-time or part-time) will be asked. After filling that out, our platform will ask you for the desired and required educational background (bachelor’s degrees, master’s degrees, etc.) and skills. Finally, you will be asked to choose the countries from where you want to hire talent.
Where other staffing agencies charge 50% more than the true value of hiring employees, our platform helps you save 20% on hiring by eliminating all huge markups and additional costs. This is done with our transparent pricing model, where you only pay the payroll and a flat platform cost. This helps you attract top talent as they have the opportunity to get more compensation.
But what if you already have a sourced candidate or freelancer you want to onboard or convert as a full-time employee? The Purple Plan will be used here. The Purple Plan allows you to onboard or convert any already-sourced candidate into full-time employees. Once you choose this plan, our platform will act as your legal entity and will offer you an automated workforce management system where our platform will handle all HR functions such as payroll management, offer letter generation, performance management, timesheet & task management, and benefits administration.
Are you ready to work with an EOR to get automated workforce management solutions? Request a demo today!
