With the ever-increasing pace of globalization, outsourcing, going global, and expanding businesses into different geographies have become a lot easier. For growing companies and emerging businesses, going global is a significant commitment that can disrupt existing business activities. Hence, it is imperative to weigh all the possibilities and the stakes while setting up a legal entity in a different territory.
However, one of the most common ways adopted by businesses that do not have enough resources and time to invest in a subsidiary in an international market is hiring a remote employee or building a remote team in that market.
Enterprises that want to alleviate any loss due to physical expansion in a foreign market can work with a global Employer of Record (EOR). An EOR helps you build a compliant workforce with the local payroll regulations and tax laws of the country you are hiring in. It eases your efforts on all the legal and administrative activities that go into managing the offshore team.
Hiring a global Employer of Record ensures that all your banking, insurance, taxation, HR, facilities, and contractual needs are fulfilled. It has the right infrastructure in place to employ and pay local workers. Further, the EOR can help you:
Under the right circumstances, working with a global Employer of Record could be the best option for any company, even if it has the resources to open an entity. However, what should one look for in a global EOR company before entrusting them with your business expansion plans?
Before diving into hiring a global Employer of Record for your expansion needs, assess the situation and understand whether you require an EOR or not. Some of the reasons when it makes sense to hire an EOR when hiring in a foreign market are:
Check if the EOR covers the countries you are looking to hire as not all EORs offer operations globally. Without a local presence in the geographies of your interests, there is a possibility that the EOR may not be updated with changes in workplace legislation or human resources policies. An inexperienced EOR in the region where they aren’t active may lead to grievances while handling disputes, salary, leaves, other compliance-related issues, etc.
To have a global team, it is necessary that you first assess if they are functional and operational in international markets. Additionally, make sure they have staff or employees working in those physical locations or have subsidiaries in those regions, so your employees have a point of contact in case of any concerns without worrying about different time zones.
Data privacy and data-compliance is a sensitive issue, and with the introduction of GDPR regulations, it has become a very crucial aspect. As a responsible organization, you should partner with an EOR that follows data privacy and security protocols in an ironclad manner. Make sure you have a non-competition clause to protect against data loss.
Assess information from the EOR on whether web transfers are done through HTTPS protocol. Make sure sensitive information is not shared on the standard. Before getting into a partnership, you can also ask the company about how many people in the EOR will have access to your employees’ data, and what will be the consequences of mishandling data by the EOR.
Experience matters a lot when hiring an EOR partner for your business. Since you will be dealing directly with compliance-related activities, it is important the EOR you select has intensive experience in the region, has earlier worked with other clients, and has an experienced team working for your business. It is also essential to know who will be handling your account and whether the account manager has experience working in an EOR and in the country of your interest. The details to look into while selecting an EOR for your business are:
There are two ways the EOR charges a service fee. It can either offer you a flat fee for each employee or charge a percentage of the employee’s salary. The fixed model is easier to manage since employee salaries vary and fluctuate across employees, countries, job roles, job hierarchy. Further, you should clarify if there is a cost over and above the service fee. You should also ensure if the EOR raises an invoice before month-end or before the fixed payment date. This will ensure good time management, avoiding any delays and other technical issues.
Some EOR companies offer full employee lifecycle services. Whether you need only EOR service or want them to handle all HR and administrative tasks for your remorse hires, it is up to you. It is always good to opt for full lifecycle services if you do not have an HR team or your in-house team is too resource-constrained to manage your remote team in other geographies.
Expanding business overseas can be daunting, and having the right talent and talent management services in the unexplored geographies will make or break your expansion goals. But it is not that difficult, thanks to the Employer of record (EOR). Carefully assessing the right EOR partner for you will:
If you are still not sure how to implement the EOR service and build a remote team, reach out to us at Skuad. Skuad platform helps businesses to create exceptional global teams from anywhere in the world effortlessly. Trusted by several clients, our competency lies in building technology teams. Our team provides end-to-end talent solutions for your workforce needs– whether it is hiring employees for your on-site locations, or building a distributed workforce across the world.