What matters the most when choosing an Employer of Record?

When you have made the decision to take your business to another location and you have also decided to delegate the duty of employment of staff to an employer of record, you have to consider a number of factors. You’ll also have to undertake research in order to select the ideal employer of record. 

What is an Employer of Record?

Employer of record (EOR) is an external, reputable agency that manages international employment activities, international employment regulations and employment payroll functions of foreign talents on behalf of the employer’s company in another region. EOR helps you to legally employ staff in a foreign region without you having to build another branch there or violate the employment laws of the government.

Starting the Process of EOR Selection

It has been a challenge to take business to the shores of other geographical locations, especially overseas. The risks and challenges attached to understanding and implementing international employment regulations along with global expansion have influenced the decision of organizations to engage employer of record services.

After you’ve decided to take on global expansion, the next thing you need to do is to partner with the best Employer of Record for your organization. To proceed with this, you’ll need to list certain requirements to set your expectation from the agencies you’ll consider. Here are some of those requirements that require your attention as you select an EOR for your organization:

  1. Review from the EOR’s clients and affirmation of their satisfaction
  2. How much experience the EOR has working with organizations in your area of specialization
  3. The EOR’s technology and infrastructure for efficient support and management
  4. The experience and history of the EOR in targeted geographical areas
  5. The success rate of the EOR with other clients in the intended region and other countries
  6. Financial strategy and payment plan adopted by the employer of record
  7. The EOR’s action timeline and service delivery model
  8. The communication pattern and problem-solving prowess the EOR embraces.

You need to make sure that these criteria are met before you choose the best EOR for your organization. The above criteria will help you to streamline as well as filter your choice and search for a perfect fit. Once you are done with this step, you will have to determine the EOR that ideally suits your organization from the pool of available EOR options in that country.

Choosing the Perfect EOR for your Company

With the intent to reach the international market in several locales across the globe, broadening the horizon of your organization along with recruiting skilled foreign workers implies that you select an employer of record. It is not only cost effective but also swift. In order to create a sane working clime for your employees, working with the ideal EOR is necessary. With that being said, how do you identify the right EOR for your company? What conditions do you need to consider? The following tips will act as a solid guide.

  • Previous work record: It is imperative to verify the previous work record of various EORs that you can hire in order to determine one that has the required level of expertise you’re looking for as well as a good track record.
  • Experience with similar organizations: You also need to look out for an EOR that has worked with organizations in your field. This will ensure that they will be able to fully understand as well as properly handle your business needs.
  • Adherence to regulations: Since EORs ensure that their clients adhere to all regulations pertaining to recruitment, tax and immigration, it is necessary to verify if the EOR pays attention to and follows these regulations. This will help you avoid problems with the public authorities in the future.
  • Service type, options and work limit: EORs deal with employment, onboarding, payroll, tax and insurance and understand immigration laws. You need to determine the type of service you want and ensure that your EOR options offer such. You should also consider the type of work model that best suits your business so that your employees can have an excellent experience.
  • Up to date technology: EORs put technology to use in storing and processing employees’ information, payroll, taxes and insurance. This guarantees data security and keeps track of their work. With technology evolving around the world every day, one of the best decisions to make is to select an EOR that applies technology to its activities. It is a quick way to keep business moving.
  • Pricing: This is a very important factor to consider. How much does the EOR demand for their services and how do they charge?

When should you choose an Employer of Record?

The advancement of technology around the world over the past few years as well as the change in economic structures and market demand has necessitated the need for business expansion. Howbeit, this expansion can be a tedious and expensive process. With the constant surge in demand for skilled foreign workers, the EOR is a ready to go solution for companies that intend to spread the reach of their horizon without the fear of violating recruitment as well as immigration laws. At what point do you think you need the services of an EOR? The points below will act as a guide.

  • Global Expansion: In order to enter the local market of a foreign country and access skilled labour, you need to fully understand its tax and employment laws. Depending on the number of employees you intend to hire, it can be quite tasky and laborious to combine these duties. When you want to hire short term or long-term workers globally, it is best to engage the services of an EOR. With this, you do not need to set up a local subsidiary and even if you intend to do so, the EOR will help cover the process of employment. This will save you time and effort, allowing you to focus on other pertinent tasks. The EOR as a legal structure will help in accessing the best pool of skilled workers in any locality of your choice, process their employment, tax and insurance.
  • Mitigation of Risks: The EOR takes on risks and liabilities on behalf of your organization. As a corporation with plans to expand business to another location, several risks are involved as you have to find the right pool of personnel while apprehending the regulations of the area. In order to reduce the risk of employing the wrong set of people, underpayment of workers, non-compliance or violation of employment laws and others, it is best you find a suitable EOR that understands the local market and its policies.
  • Burden of Immigration and Tax Compliance: If you decide to employ foreign workers, you have to ensure that you are compliant with the immigration laws of that country. You also have to comply with its employment and tax regulations to avoid violation and its dire consequences. In order to take this burden off your shoulders, you should employ an EOR.

How to Know that You have made the Right Choice?

The success of your choice is always attached to the result of your choice. After you’ve selected your perfect fit, it’s important to review the EOR activities on a regular basis. Most times, organizations tend to pick the most suitable option for the organization in terms of the available criteria and requirements. However, a perfect fit might necessarily not give the best result/output eventually. Thus, it’s important for every company/organization to consistently monitor the effectiveness of the chosen EOR.

In order to determine if your choice is actually right for your organization you have to carry out some periodic surveys among your employees and a regular check on the EOR services. Companies that fails to observe a regular check on the activities of the EOR is putting their businesses on a greater risk. This is because, some EOR turn out to act as just a middleman for the organization and her employees rather than offering a complete service. Thus, as an organization, you need to examine the activities of your EOR on a regular basis. The following factors are expected to be checked regularly; hiring process, employees’ management, employees’ satisfaction, legal and tax compliance, employees’ benefits, alignment with interests of your company and the EOR communication level with the company and her employees.

When these examinations and surveys are executed, it will help organizations to know the result of their choice and decision. When EOR ensures that the factors mentioned above are duly followed, then the organization will be rest assured to have made the right choice.


What matters the most when choosing an Employer of Record?

  • What is an Employer of Record?

    An Employer of Record (EOR) like WeHG is an agency that manages all employment duties on behalf of a business institution overseas. The EOR ensures that all regulations that apply to recruitment, immigration, tax and insurance are duly adhered to. They bear all related risks and liabilities for the organization.

  • What is the difference between an EOR and PEO?

    An EOR undertakes all legal duties that relate to employment and bears risks while acting as a mediator between the company and its staff in a foreign country. On the other hand, PEO just establishes a contract with the company alone, not its staff and doesn’t undertake any risk. They only manage the HR tasks of the company’s staff in another geographical location. PEO becomes the employer of record for tax purposes, filing paperwork under its own tax identification numbers. The client company continues to direct the employees’ day-to-day activities.

  • When should you use an Employer of record?

    Employer of record should be engaged when an organization decides to expand globally. To save the organization from the stress of learning, understanding and observing all obligations attached to creating another subsidiary, EOR should be used. In summary, if you want to expand your business and enhance growth, you need an EOR like WeHG to help you manage your members of staff overseas as well as handle your tax risks and liabilities.

  • Hannah Kohl
    Hannah Kohl. Head of Customer Success. Has extensive experience in the HR and IT industries. Helped 100+ international clients to achieve their global goals.

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