Pros And Cons Of An Employer Of Record Strategy

Pros And Cons Of An Employer Of Record Strategy

If your company is considering using an Employer of Record (EOR), examine the benefits of this service for your company and compare them against any potential disadvantages. While many businesses use EOR services, that doesn’t mean it’s the right staffing solution for every company. Before you use the services offered by an Employer of Record, you need to consider your business plans for the future and what you value as an owner or executive of a company. Learn both the benefits and drawbacks of an EOR in order to make an informed decision for your business.

Benefits And Drawbacks Of An Employer Of Record



Cost Effective
For startup businesses or businesses that are rapidly growing, an Employer of Record can help with various back-end tasks and hiring duties that would otherwise fall to an HR department. For companies that have smaller-sized teams or whose HR department employees perform many tasks, outsourcing back office work can save your employees from being overrun while also reducing the cost of onboarding new back office staff. An EOR strategy can also ensure that your company is complying with local law so you avoid any complicated and expensive legal issues. To learn more about the Employer of Record benefits for growing businesses, read Why Your Small Business Might Need An EOR.

Simplified Business Expansion
Many companies hire Employer of Record services when they are ready to expand their business to another country. Since an EOR is already a registered company in the area you are expanding into, your business will not need to wait for approval of an application to register as an entity abroad. This reduces barriers when expanding to other territories. An Employer of Record also simplifies hiring in other countries. Since the EOR is well versed in foreign employment laws, you can feel confident that your company is following all laws and regulations. If for any reason there are legal complications, the EOR assumes responsibility instead of to your company, giving you legal security. To learn more about the benefits of an EOR for expansion, read How EOR Can Help You Expand Your Business.

Varied Services
An employer of record strategy is useful when your company is growing quickly or expanding into new territories, but this is not the only way an EOR can help your business. An EOR also offers payroll services and other back-end services. EOR manages the financial administrative, compliance, and regulatory side of the business so that you and your team have more time to handle the business side.


Reduced Control
Because an Employer of Record recruits and hires remote employees, when your company needs to hire remotely, the business owner may not be on site. When you partner with a staffing agency Employer of Record, you are counting on the experience and skill of the staffing company to make good decisions. Because of this, it is vital that you partner with a staffing company with an established reputation. But the EOR does not make hiring decisions alone; your EOR company will work with you beforehand to get a sense of the type of employee you want and they will only hire recruits who are highly qualified, fit the standard you have discussed, and are aligned with your company values and goals. When remote hiring is necessary, you will not be able to assess the worker the same way you could if you were to hire them yourself. You may want to consider how important it is for you to be directly involved in the hiring process.

Fewer Hands-On Opportunities
EOR solutions exist to help remove some of the time-consuming back-end tasks of your company. By streamlining hiring and making overseas expansion easier, an Employer of Record takes care of back-end tasks so you can focus on other, more important parts of your company that require your time and attention. While some Employer of Record solutions may seem as though they require executives and owners to be too hands-off and will limit the amount of interaction an owner or executive has, some Employer of Record companies offer flexible solutions that allow you to be as involved as you want. This gives you the choice to let the EOR take over tasks to relieve your duties while also giving you the opportunity to oversee or maintain final decision-making powers for areas of operation that are most important to you. In order to utilize this flexibility, you need to find the right EOR partner who can offer you the flexibility you desire.


Streamline Expansion And Back Office Tasks With An Employer Of Record

The Wide Effect Employer of Record strategy offers your business end-to-end, turnkey solutions that ensure legal compliance and reduced overhead while giving your company the freedom to focus on the most important parts of your business. The flexible EOR contracts offered by Wide Effect will ensure coverage of all necessary legalities and assumptions of responsibility while giving your company the freedom to control which services you use versus which aspects you retain full control over. To partner with Wide Effect for our Employer of Record services, call 1-262-298-0026 or fill out the online contact form.



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