Expanding your company globally and building remote teams all over the world can be a rewarding and challenging experience, not just for your company but also for your new hires. An improvement in employee experience is an improvement in morale, productivity, and, ultimately, the business’s bottom line. A happy workforce is productive, and a good working environment is conducive to a healthy and profitable business.
Large and small companies face challenges, including practical and compliant expansion into new markets. Companies must face multiple legal issues when recruiting and hiring international employees and contractors. They should be aware of the costs of hiring, potential legal issues with non-compliance, a tableau of complicated labor laws, and the options companies have to make contracting and hiring easier, easier, and safer. Handling these issues can go a long way toward improving the company experience.
An Easy Way To Hire and Pay Employees
The easiest way for globally expanding companies to overcome the challenges and risks of global hiring is by working with a third-party human resources outsourcing platform. Solutions are available, allowing employers to hire staff in countries where they don’t have subsidiaries established. Also, for payroll to be processed promptly and accurately, payroll taxes to be calculated correctly and remitted on time, and remote employees to be easily and seamlessly onboarded into the company and employed while remaining compliant with local employment and tax laws.
If you are expanding across many different markets and don’t intend to set up legal entities, one of the best ways to remain compliant while paying employees and contractors is by partnering with an employer of record (EOR).
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What Is an EOR?
An employer of record is a third-party platform that enables organizations to hire and onboard employees anywhere in the world without setting up a subsidiary and ensuring full compliance with country-specific employment laws.
Several complex issues arise when employing foreign workers. Contracting with foreign contractors, onboarding subcontractors, and hiring remote employees in foreign countries can be complex and challenging without local legal entities and local legal experts in each country. Employment and service contracts need to be legally compliant.
Some countries do not allow co-employment partnerships necessary to work with a professional employer organization. In many countries, you would need a legal entity established in that country to be able to hire employees, which can be a costly and lengthy process. Without local legal experts, following tax and employment laws can be complex.
A Legally Compliant Global Employment Solution
An employer of record can solve the issues mentioned above by managing local compliance, drafting compliant contracts, ensuring there is no misclassification of employees as contractors, accurately handling payroll and tax compliance, and paying your employees' payroll and statutory benefits.
The EOR becomes the legal employer of your employees on paper. You still direct your employees and take care of day-to-day operations in your business. Still, the employer of record handles numerous human resources tasks for you, and you can hire employees without the need to establish entities. This can significantly benefit you when you wish to expand in multiple global marketplaces.
How an EOR Improves Global Employee Experience
An employer of record has many benefits for both employers and their employees. The following sections outline some of the many ways an employer of record employment arrangement benefits employees and improves the employee experience.
Makes Onboarding Seamless and Painless for New Hires
There are talented and qualified individuals around the world ready to work for global companies such as yours. Recruiting and hiring these workers can only be easy with a third-party such as an employer of record. The EOR can bring these new hires onboard and get them trained and introduced to your company policies and work culture.
Allows for Flexible Work
Flexibility, one of the benefits of remote employment, is among the most critical issues for many employees. Being flexible with their physical place of work and their work hours is one reason many employees have switched to a work-from-home employment arrangement. It’s also a reason for increased productivity. An employer of record can hire motivated individuals from all over the world to work almost anywhere.
Efficiently Administers Statutory Benefits and Supplementary Benefits
Each country has minimum benefits that organizations must provide to employees. Following the employment laws of the country where you’re hiring, the employer of record will make sure that benefits are compliantly administered and that laws pertaining to minimum wage, minimum days of leave, worker’s compensation, and health insurance are adhered to. The employer of record can enroll employees in group health insurance.
The employer of record also facilitates mandated contributions to social security, pensions, and unemployment compensation. Paid time off and various types of leave are accounted for.
Employers can provide supplemental benefits and perks to employees for the ultimate remote employment experience, such as:
- Meal allowances
- Equipment or equipment allowances
- Gym memberships
- Supplemental health insurance
- Dental and optical insurance
- Life insurance
- Additional pensions
- Paid days off above the minimum leave
Employees Are Treated Fairly and According to Local Employment Laws
Every employee is treated fairly by the employer of record. The employee’s employment contracts, drafted by the EOR, are legally compliant and spell out the employee’s rights and the company’s policies.
Any hours that are overtime are compensated according to the law. If a workplace injury occurs, the employer of record can facilitate payment of worker’s compensation. If an employment contract is terminated, the employee is given the proper legal notice and appropriate severance package.
In addition to other compliance components, payroll is processed accurately, and employees are paid on time, which is always conducive to a good employee experience.
Provides Continuing Human Resources Support
When you partner with an employer of record, your company is still in complete control of your staff. However, the EOR can become an essential part of your company’s HR, a liaison between your workers and the management. When employees have an issue with their contract, employment, benefits, training, onboarding process, offboarding process, or any other human resources issue, the employer of record can support them.
Deciding if an EOR Is Right for Your Organization
One of the pivotal factors for choosing to work with an employer of record is the presence or absence of a local entity and any plans to establish one. Many countries worldwide require foreign companies to establish a local legal entity as a prerequisite for hiring in that country.
The entity must also register with the local tax authority to withhold employee income taxes and make employer and employee contributions to social security, pensions, and insurance plans such as health and unemployment insurance.
If you are not establishing an entity, then employing foreign nationals in a foreign country is limited. An employer of record can be the legal employer of your workers on paper, as the EOR has already established legal entities around the globe.
Skuad has entities worldwide. In 160 countries, organizations can hire employees easily and swiftly by companies such as yours by partnering with Skuad as the employer of record. This partnership saves the time and resources of setting up a local legal entity in the country where you wish to hire employees.
Conclusion – How Skuad Facilitates Premium Employee Experience
Your company can hire international contractors or employees in different countries in a few ways. Suppose your company will establish a local legal entity in the countries where you’re hiring. In that case, you can process payroll in-house or outsource payroll processing to a global payroll service. If you have an entity, you can partner with a professional employer to handle some human resources tasks such as payroll processing.
Whichever method you choose to pay employees or contractors, make sure to work with a service that will keep you compliant with all employment and tax laws and accurately handle EOR payroll, paid time off, and benefits for the best employee experience. For maximum flexibility, simplicity, and compliance, partnering with Skuad is the best EOR to hire international employees.
Book a demo today to see how Skuad can help your company hire international employees and offer the best Employer of Record experience.