Common myths about Employer of Record (EoR)

Employer of Record (EoR) services are becoming an increasingly effective and popular solution for businesses seeking to expand their operations internationally without the complex process and costs associated with establishing a local entity. By partnering with an EOR, companies can hire and onboard employees in untapped countries while also ensuring compliance with tax regulations, employment practices, and local labor laws. However, even though there’s a growing need for EOR services for businesses, there are multiple misconceptions and myths that could affect the understanding of how it truly works.

Ranging from concerns regarding cost to misconceptions about control over employees, various businesses are still hesitant to leverage EOR services because of false conceptions. In this post, we’ll tackle some of the most common Employer of Record myths.

Employer of record services: Myths vs reality

Expanding a business globally is a complicated process. From navigating local labor laws to managing payroll and compliance, hiring international talent will often feel like a complicated task. This is exactly where an EOR comes in. Their services will enable businesses to hire and manage employees internationally without having to set up a local entity, thus simplifying global expansion.

Despite the growing popularity, EOR services are constantly being misunderstood. Misconceptions about what an EOR truly does and who it is for can prevent businesses from utilizing it to its full potential. Some of the most common EOR myths include:

Myth 1: An EOR is just a staffing agency

Multiple businesses tend to confuse EOR services with a traditional staffing or recruiting agency. While staffing agencies might help candidates, an EOR will go beyond just hiring.

• Staffing agencies will provide candidates; however, the company will still handle taxes, benefits, payroll, and compliance.
• EORs will act as a legal employer for the international employees, handle the payroll, taxes, benefits, compliance, and employment contracts, while also maintaining control over the operations.

In simple words, an EOR is more than just finding the right talent. It is also about handling them compliantly and efficiently.

Myth 2: You lose control of the employees

Some companies will hesitate primarily because they fear losing authority over the team. This is one of the most common Employer of Record myths, and the reality, however, is quite the opposite.

• You tend to retain entire operational control over the employees. This includes project assignments, performance management, company culture, and day-to-day supervision in your hands.
• The EOR will only handle the legal and administrative responsibilities, such as taxes, benefits, payroll, and labor law compliance.
  

This partnership will enable you to focus on the growth of the business while also staying fully compliant across borders.

Myth 3: An EOR is only for large corporations

Another Employer of Record myth is that EOR services are made exclusively for multinational companies.

• In fact, SMEs and startups can benefit significantly from an EOR, as it allows them to enter new markets without the cost or complexity of setting up a local entity.
• Businesses of any size can hire globally in days, not months, while also ensuring compliance with local labor laws and regulations.

An EOR is a scalable solution for businesses of various sizes looking to grow internationally.

Myth 4: EORs are only meant for short-term projects

Some tend to think that EORs are only suitable for freelancers or temporary contract-based work. However, EORs can easily handle both short-term and long-term employment.

• If you require talent for a single project or would like to build a permanent team globally, an EOR can handle it.
• They will provide full-time employment, compliance management, and benefits, thus making them a reliable solution for long-term workforce planning.

This means that you can expand your global team confidently, whether it is temporary support or permanent hires.

Want to understand how much it really costs to partner with an EOR? Read our detailed breakdown of Employer of Record costs

Global Squirrels: your perfect EOR partner to manage remote employees

Global Squirrels is a staffing and EOR/payrolling platform that assists in employing remote contractors from top talent countries like India, the Philippines, Mexico, and more. Our platform oversees all HR-related responsibilities, timesheets, offer letter/contract generation, compliance, on-time payments, and performance monitoring. We can help you hire top global talent from the country of your choice while ensuring legal compliance and zero risks to your company. 

Here are the top features of our EOR platform:

1. Flat-fee pricing model

Global Squirrels operates on a transparent, flat-fee pricing model. This eliminates the hidden charges and unexpected costs. You only pay for their monthly payroll costs and our platform’s flat fee. Whether you are hiring a single employee or scaling across countries like India, the Philippines, or Mexico, you can see the hiring cost details on our platform.

2. Ensure data privacy and security

We safeguard employee information, and it’s our top priority. We follow strict international data privacy standards, which include standard compliance rules and secure systems to store and process sensitive data. We establish clear agreements that outline data handling policies, thus ensuring that the talent cannot bypass data outside the business.

3. Simplifying compliance complexity

Global Squirrels takes the complexity out of international employment by taking care of all the aspects of local labor laws, contracts, statutory obligations, and benefits on your behalf. Our team of compliance experts stays updated on regulations across multiple regions, which ensures that your payroll, contracts, and HR processes are fully compliant, reducing the risk of legal violations or regulatory errors. 

If you are wondering how our EOR platform works, Global Squirrels offers three plans to hire, manage, and pay your remote talent beyond borders.

With the Orange Plan, we recruit top talent based on your job and handle the administrative operations of the hires. The Purple Plan will streamline onboarding for talent you have already identified, and also covers payroll and benefits management. The Blue Plan is perfect when you want your hire to work from our designated offices in Mexico, the Philippines, or India for seamless productivity and management. Similar to the other plans, we handle onboarding and HR activities, ensuring a smooth, compliant setup and efficient global workforce management.

Get to know more about how we function. Request a demo!