When a company wants to make the leap to the international level, it can either establish itself in the host country or perform its activities through an Employer of Record (EoR), an option that offers numerous advantages. In this article, we discuss how to effectively implement the Employer of Record in one’s business strategy.
Table of contents:
- How does an Employer of Record work?
When does one need the services of an EOR?
Incorporating the EoR strategy into one’s business strategy
The benefits of contracting an Employer of Record
How can Advantia Assessors help?
How does an Employer of Record work?
The process begins when a company decides to recruit or relocate an employee abroad. The EoR attends to all the recruitment formalities, including the drawing up of contracts, arranging tax and appropriate insurance, and ensuring compliance with local regulations. The company itself retains full control over operational and management decisions relating to the employee. Find out in our previous article what is an Employer of Record and how can these help you?
When does one need the services of an EOR?
Employers of Record can provide companies with efficient and cost-effective management of their global workforces, can mitigate legal risks, and can direct focus to business growth and development by significantly minimising bureaucracy and simplifying the process of overseas recruitment.
This is often not a quick process and it can be difficult to organise these tasks when local expertise is lacking. Using the services of a local employer changes this situation by providing on-site presence.
An EOR facilitates the recruitment of local staff and provides an easier and faster way to start a company’s operations abroad.
The Employer of Record will ensure that all legal requirements are met.
Incorporating the EoR strategy into one’s business strategy
There are a number of matters to consider when selecting an Employer of Record. They are listed below:
1. Identify your recruitment needs
The first step is to identify your specific recruitment needs in international markets. Are you looking for talent in a specific field? How many people do you need to recruit? What specific skills are you looking for? Do you need to relocate an employee abroad? Being clear on these points will help you choose the right EoR for your business.
2. Assess the EoR’s experience in the local market
Once you know what you need to consider, it is time to choose the right EoR. This involves investigating several providers, assessing their experience in the desired markets, their technological capabilities and their knowledge of legal and human resources aspects.
The chosen company will need to have a good understanding of the country’s employment and fiscal laws, as it will be responsible for processing contracts and payroll, filing tax returns and complying with employment regulations.
3. Define the terms of engagement
Once you have chosen the EoR that suits you best, you will need to define the terms of engagement. These include details of the services provided, associated costs, communication processes and timescales. Ensure that all aspects of the agreement are clear and documented.
An EoR will usually charge a monthly or annual fee for its services. The fee will vary depending on factors such as the time spent or the number of employees managed.
4. Incorporating an EoR into your business processes
Make sure you have effective communication systems in place, and decide which tools you are going to use. You should also ensure that your internal teams understand what it is like to work with the legal employer. A well-planned induction process will facilitate a smooth transition.
5. Performance evaluation
Once the EoR system has been implemented, it is important to follow up. Feedback will help to ensure that efforts are being made by both parties.
6. Technological capability
When engaging the services of an EoR it is important to ensure that it can offer advanced solutions for the efficient management of tasks such as payroll and time tracking.
The benefits of contracting an Employer of Record
There are many advantages of implementing an EoR, allowing businesses to expand and gain flexibility.
• Savings of time and money
By avoiding the need to set up legal entities in each country, companies can make significant savings of administrative and legal costs. The EoR attends to recruitment, payment of salaries, and HR administration and ensures compliance with local employment laws. This collaboration allows the company to focus on business growth without being distracted by administrative complexities.
• Access to international talent
The EoR gives companies access to a wider pool of talent, which is essential in highly specialised industries. The EOR helps you remove administrative barriers by attending to the legal aspects of employment.
• Advice on legal and employment matters
You will benefit from the up-to-date knowledge of the Employer of Record. This person is fully informed and trained on local employment laws and regulations, enabling you to avoid the risks and penalties associated with non-compliance with current regulations.
• Market agility
The ability to hire and fire quickly through an EoR gives companies greater agility to respond to changing market conditions.
– Reduced employment risks
Working with an EoR ensures efficient management of legal obligations, correct payment of taxes and correct social security cover. This service provides companies with legal and fiscal security.
• Optimising international growth
Incorporating an Employer of Record into business strategy can be a transformative step towards successful global expansion. With careful planning and selection of the right EoR, companies can enjoy a global presence without the complexities associated with international expansion. By considering this solution, companies not only optimise their operations, but also position themselves strategically for growth and innovation in a global marketplace.
How can Advantia Assessors help?
Our team of experts in Andorra provides a comprehensive range of payroll, taxation, compliance and immigration services for businesses. As an EoR, we specialise in working with clients to focus on compliance with local legislation while the company retains the day-to-day management of its employees. We offer personalised support and advice on recruitment and payroll management, ensuring efficiency. We are familiar with Andorran employment and fiscal legislation, ensuring compliance and providing clear information to make management easier for our clients.
Are you interested in making the leap to Andorra but don’t know where to start? Advantia Assessors will study your case, and together we will find the best solution. Get in touch with us.