In the fast-paced global market, businesses are always seeking new ways to edge out the competition. For those with expansion on their mind and a growing remote team to think about, more and more businesses are using EOR services to tip the balance in their favor. But what are EOR services, and how do they work to give businesses the edge in a cutthroat industry?
What Are EOR Services?
At its core, an Employer of Record (EOR) service is an outsourced service that acts as the employer for your employees when hiring in a foreign country. Payroll, benefits, and ensuring compliance with local labor laws are all outsourced to the service provider. This gives organizations the freedom to hire international talent without the need to establish a foreign legal entity.
For instance, if you’re a US-based software company looking to hire a brilliant software developer based in Brazil — an EOR for your organization would act as your Brazilian employer. Completing the necessary legal paperwork, tax submissions, and labor laws whilst you can get back to onboarding and welcoming your newest team member.
The Competitive Edge: Speed and Flexibility
Faster global growth — This is the killer advantage of EOR. When you hire people overseas in the traditional manner — setting up an overseas entity — it’s slow and cumbersome. It can take many, many months to ship an employee to another country with the EOR model. You can do this in a few weeks instead of months.
With this, you can get the benefits of leverage and take action sooner when it comes to opportunities and challenges in the business if you get a new project or a new operation that requires you to ship a team ASAP. EOR can make it happen without the headaches of having to do this through traditional methods.
Cost-Effectiveness: Reducing Overheads
Another good reason to use EOR is cost. Doing things the old way — foreign entities — can be expensive. Legal and consulting fees, office (space) rent or other real estate, and ongoing administrative burdens can make it terribly easy to hemorrhage money. For small companies, this money can add up awfully quickly and prevent you from your true business objectives.
With EOR, instead of enormous fees, you pay an easy-to-understand flat fee and avoid the need for a foreign physical presence. This lets you keep more money for your business, whether you need to hire more developers, market and sell more products, or have cash for strategic opportunities.
Focus on Core Business Activities
By using an EOR service to handle the complications of hiring international employees, you’re left to do what you do best. With minimal time-consuming and complex administration to worry about, you can prioritize and exert your skills on your core business functions, be that innovation, customer service, business development, and so on.
This is particularly beneficial in competitive markets where time and resources are limited. Those efforts that typically would be spent completing monotonous and resource-sucking tasks can instead be allocated more efficiently and productively. Therefore, your business will move more smoothly and will have more to give to the team when it’s needed.
Scalability: Growing Your Business with Ease
Scalability is something every growing business should take into consideration. Whether you’re hiring one more employee to the team or 100, EOR services allow you to hire hassle-free, no matter the order. In this constantly shifting business environment, you need to be able to respond quickly and continue with your business as usual.
Geographically, hiring new employees in different locations would usually require an associated infrastructure investment. Using an EOR service will mean that you can do so easily and run your business smoothly.
Building a Diverse and Global Team
The importance of international diversity in the workplace and within the marketplace is becoming increasingly apparent. It’s important for innovation and creativity, which can often lead to further business success. By hiring employees from a range of different locations, you are able to utilize specific skills and talents that are uncultivated in other locations.
This also enables you to connect better in a global market by understanding your customers’ cultures and languages that you serve. With employees that better mimic your client base, you are better able to adapt to the global marketplace and sell different products or services in a number of different countries and regions.
Choosing EOR Services For Your Business
Whether you’re a budding little startup beginning your journey overseas or a large enterprise looking to employ new team members internationally, EOR services can provide you with the launching pad that you need to experience success.
To learn more about implementing EOR services for your business, visit Social Biz Magazine.
