Imagine you’re running a US-based company and you want to tap into the global talent pool. You’ve found the perfect candidate in the Philippines, but you’re overwhelmed by the legal and administrative hurdles of hiring internationally. This is where an Employer of Record (EOR) can help.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organization that employs and pays individuals on behalf of another business. EOR services allow companies to hire employees domestically or internationally without establishing a legal presence or dealing with complex compliance requirements in the employee’s country.

Think of having a partner who handles local labor laws, payroll, and HR tasks, making it easy for you to hire globally.

What are the differences between an EOR and a PEO?

With an EOR, the company doesn’t share employment responsibilities. The EOR takes care of everything related to hiring, payroll, and legal compliance, while the company oversees the employee’s daily tasks.

In contrast, a PEO shares employment duties with the company. They handle HR tasks like payroll, taxes, and benefits, but both the PEO and the company are responsible for the employee. This shared setup is called a co-employment agreement.

What does an EOR do?

The roles of an EOR can depend on the service and location. Here are some typical tasks an EOR handles:

• Ensuring compliance with local employment laws: An EOR helps businesses hire employees according to local laws and provides compliant employment contracts in each country or jurisdiction.
• Onboarding new hires: When you hire someone new, the EOR takes care of getting them started. The EOR will onboard them, managing the employment agreement and setting up all the necessary processes for the new team member to begin working at the company.
• Handling global payroll: Dealing with payroll in different countries can be tricky. The EOR fully manages payroll and local taxes for both the employee and the employer, ensuring that employees receive accurate pay slips
• Offering employee perks: EORs provide companies with access to local insurance coverage, and advise on the appropriate benefits in accordance to local standards.
• Managing employee exits: When an employee is offboarded, the EOR ensures that all necessary steps and actions are taken.

How does an EOR work?

Imagine a US company managing employees in Philippines. Instead of incorporating a local entity and bearing legal and compliance risks, the company can hire the employees through an EOR. The EOR manages all of the employment procedures and regulations, allowing the company to focus on its core business operations.

Why work with an EOR?

Faster Expansion

An EOR allows you to onboard team members from anywhere in the world swiftly. According to a research by Fountain, companies that utilize EOR services can reduce their time-to-hire by at least 50%, enabling rapid scaling of operations and access to a vast pool of global talent.

Cost Savings

Establishing a legal entity in a foreign country can be costly and time-consuming. Research by Deloitte indicates that using an EOR can reduce international hiring costs substantially, providing a cost-effective solution without the hefty price tag associated with setting up new offices abroad.

Flexibility in Staffing

Whether you need full-time employees or project-based contractors, an EOR provides flexibility to accommodate your employment needs. Companies using flexible staffing solutions can see increased operational efficiency, allowing them to adapt quickly to changing business needs without long-term commitments, as shown in a study by EY.

A More Diverse Talent Pool

Building a global team introduces diverse perspectives and innovative ideas. McKinsey’s research highlights that companies with diverse workforces are more likely to have financial returns above their industry averages. An EOR allows you to hire a global and multi-cultural workforce, driving better business outcomes through diversity.

How does an EOR differ from a Staffing Agency, BPO, and RPO?

Understanding different workforce solutions can make a big difference for your business. Let’s break it down:

Staffing Agencies

Think of them as matchmakers. They connect job seekers with companies by finding the perfect fit for a role, handling job postings, background checks, reviewing applications, and initial paperwork.

Employer of Record (EOR)

An EOR steps in after you’ve found your ideal candidate. They don’t help with recruitment, but taken over once you decide to hire someone. The EOR helps with managing payroll, compliance, and benefits to ensure proper compliance.

Business Process Outsourcing (BPO)

BPOs handle specific business tasks like customer service, IT support, or accounting, often offshore or nearshore to save on costs.

Recruitment Process Outsourcing (RPO)

RPO providers manage the entire recruitment process for you, from creating job profiles and finding candidates to onboarding new hires, offering a complete hiring solution to make your recruitment more efficient.

Each of these services—staffing agencies, EORs, BPOs, and RPOs—supports different aspects of your workforce and business operations, helping you choose the right solution for your company’s needs.

For make it easier, you can take a look at this table below about the comparison.

How to choose the right EOR?

Finding the perfect Employer of Record (EOR) for your business can feel overwhelming with so many options out there. Here are some tips to help make your decision easier:

Coverage in Your Target Countries

Check if the EOR operates in the countries where you plan to hire. If you need to hire people in multiple locations, especially in Southeast Asia, a regional employment platform like Glints ensures a seamless and hassle-free experience. Glints has in-market experience and expertise across Southeast Asia to handle your end-to-end HR requirements.

Quality of Support Services

Cross-border employment can be complex, so it’s important to choose an EOR that provides strong support and helpful resources. Research and speak to their teams to understand the level of support that will be afforded to you. Having reliable support can make all the difference.

Responsiveness and Reliability of Service

Consider the quality of service provided by the EOR. Look for one that offers prompt and reliable assistance, ensuring your questions and concerns are addressed quickly. For instance, Glints provides a high level of service, allowing you to reach out anytime for help, ensuring a smooth and efficient experience.

How much does an EOR typically cost?

EOR costs vary depending on factors like location, services offered, and the number of employees. Most EORs charge on a per-employee basis. Visit our pricing page to learn more about the costs of hiring globally.

Unlock Seamless HR Management in Southeast Asia with Glints TalentHub

Glints TalentHub transforms HR complexities into seamless operations with our tailored Employer of Record (EOR) services. Our local HR experts ensures all your HR requirements are covered in Southeast Asia. Our end-to-end offering covers the entire employment lifecycle, from onboarding to offboarding of employees.

Partner with us for hassle-free HR management and schedule a no-obligation consultation today to receive your customized proposal.