When to Use EOR: A Practical Guide for Global Hiring

Expanding your team across borders is no longer limited to large multinational companies. Startups, scale-ups, and even SMEs are now hiring global talent to stay competitive. However, international hiring comes with complex legal, tax, and compliance challenges. This is where an Employer of Record (EOR) becomes a strategic solution.

This guide explains when to use EOR, how it works, and why it may be the best option for your global hiring strategy.

What is Employer of Record?

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of your company in another country.

While the EOR handles employment contracts, payroll, taxes, benefits, and local labor law compliance, you retain full control over the employee’s day-to-day tasks and performance.

In short: You manage the work, the EOR manages legal employment.

When Should You Use an EOR?

There is no single scenario where EOR applies. Instead, it supports several common hiring and expansion challenges faced by global companies.

1. When You Want to Enter a New Market Quickly

Setting up a local entity can take months depending on the country. You may need business registration approvals, tax identification, corporate bank accounts, and compliance frameworks before hiring your first employee.

If your business is testing a new market or wants to capture opportunities quickly, waiting for entity setup can slow down growth.

2. When You Want to Hire Remote Talent Across Multiple Countries

Many companies now build distributed teams instead of centralising operations in one location. However, hiring employees from different countries means managing multiple labor laws, tax systems, and payroll processes simultaneously.

If your HR team is not equipped to handle multi-country compliance, administrative complexity can grow quickly.

Learn more about our hiring guide in Southeast Asia.

3. When You Need to Stay Fully Compliant with Local Employment Laws

Employment regulations can differ widely across markets. Some countries require mandatory benefits, notice periods, severance structures, or social security contributions that companies unfamiliar with local rules might overlook.

EOR providers specialise in local employment compliance and help ensure that:

• Contracts meet local legal standards
• Payroll calculations include statutory contributions
• Termination procedures follow country specific regulations
• Employee benefits align with market expectations

4. When Your HR Team is Overloaded with Administrative Tasks

As companies grow, HR teams often balance employee engagement, workforce planning, recruitment, and compliance responsibilities at the same time. Adding international payroll and regulatory tracking can overwhelm internal teams.

EOR helps reduce administrative workload by handling:

• Payroll processing
• Benefits administration
• Employment documentation
• Government reporting requirements

5. When You Want to Avoid Setting Up a Legal Entity

Establishing a foreign subsidiary requires financial investment, regulatory knowledge, and ongoing maintenance.

If your company only plans to hire a small team or operate with a lean workforce, the cost of maintaining an entity may outweigh the benefits.

EOR provides a cost efficient alternative, allowing you to hire employees legally without long term entity commitments. This flexibility is helpful when your hiring needs may change over time.

When EOR May Not Be the Best Option

While EOR is powerful, it is not always the right solution.

You may not need an EOR if:

• You already have a legal entity in the country
• You plan to hire a large workforce long-term
• You need full control over equity plans or complex executive compensation

In such cases, setting up a local entity or using a different employment model may be more cost-effective.

Final Thoughts

An Employer of Record is best used when speed, flexibility, and compliance are top priorities in your global hiring strategy. If your business wants to access international talent without legal complexity, EOR provides a practical and scalable solution.

Before choosing an EOR, evaluate your hiring goals, target countries, and long-term expansion plans to ensure it aligns with your business strategy. Talk to our team to explore the right EOR solution for your global hiring needs.

This article is brought to you by Glints TalentHub. Leading companies are actively building their borderless teams in Southeast Asia, Taiwan, and beyond. However, the prospect of going borderless can be daunting due to complex regulations and cultural ambiguities. With Glints TalentHub, you’ll have a dedicated team of in-market legal, HR, and talent experts by your side at every step of the way.

Glints TalentHub offers an end-to-end, tech-enabled talent solution that encompasses talent acquisition, EOR, and talent development. We empower businesses to leverage the strengths of regional talent efficiently to build high-performing, cost-efficient teams.

Schedule a no-obligation consultation with our experts to receive a tailored proposal today!