With many companies adopting a remote work environment, it’s easier than ever to find employees in different countries, regions, and continent. Whether it’s to cut costs or to find better skilled candidates, there are many reasons why you may want to hire abroad.

Companies now hire full teams in another country to benefit from available skills that may otherwise not be present in their home countries. Or maybe too expensive.

But how can you hire full-time employees and provide them with benefits in their local countries? How can you ensure you’re compliant with that country’s local laws, legislation, taxes, and more?

The answer is to hire an employer of record, a company that handles all the recruitment and compliance work for you. The employer of record may even manage your team on your behalf.

In this article, we’ll explain what an employer of record is and highlight the top EOR services companies seek. We’ll also explain when it’s best to work with this type of company.

What is an employer of record?

An employer of record (EOR) is a company that provides recruitment and payroll services to another company usually in another country.

The reason recruitment services are valuable is because EOR service providers are responsible for handling all legal and financial work related to the hiring process.

EOR service providers must also ensure the client company is in compliance with labor and tax laws of the country where employees are located.

It’s worth mentioning that you may work with a local employer of record, which acts like an HR outsourcing company. In this case, they’re hiring local talents on your behalf. They may provide many of the following services locally or globally.

When hiring talents outside your home country, you may refer to the EOR as a global employer of record or global EOR.

What are the benefits of an EOR?

Working with employer of record has many benefits. Here are a few of those benefits:

1) Fewer expenses: 

As a business, working with an EOR service provider reduces the costs of establishing an entity in a new country. The EOR provides the full service and hires employees, or teams, on your behalf.

2) Overcomes language barriers:

One of the major benefits of working with an employer of record is they help you overcome potential language barriers in the new country. For example, if you want to establish a marketing team in Egypt, you can use Tawzef’s employer of record services. Here, Tawzef not only manages the entire recruitment process for you, but also manages all your paperwork in the local language, which is Arabic. Tawzef can also measure candidates’ English language skills, through tests or interviews or both.

3) Legal compliance:

One of the most important services an employer of record provides is legal compliance with local labor laws and taxes.

4) Less business risk:

As a business, you don’t have to worry about business risks because you don’t have an entity in that country. You have a remote team and the employer of record manages their payroll, taxes, and compensation and benefits scheme and more.

5) Helps you overcome hiring challenges:

The EOR service provider is well-versed in all stages of the recruitment process and usually in hiring talents across various fields and varying degrees of seniority. This means they help you overcome many HR challenges, like designing a pay structure, in a new country.

6) Your EOR is a business partner:

Another benefit of using EOR services is having a long-term business partner that’s invested in your business as you are. If your remote-hired team succeeds, your company grows, which translates to success for the EOR.

Most common employer of record services

Employers of record like Tawzef offer many services. Some companies choose to take all of these services at once or choose services and add more as they grow.

Here are the most common employer of record services companies ask for:

• Managing the entire recruitment process on the client company’s behalf
• Creating and managing employee contracts
• Providing social and medical insurance services
• Creating HR policies for the new team, teams, or branch.
• Setting up the compensation and benefits strategy, policies, and KPIs.
• Conducting employee assessments, including psychometric tests (when requested)
• Managing all payroll needs, including employee taxes and other taxes
• Paying your employees on time
• Providing onboarding services
• Creating an effective HR strategy
• Conducting exit interviews
• Creating an employee rewards and recognition program
• Creating and supporting your business development strategy
• Setting up training and development programs for your employees
• Creating an HR budget, including a training and development budget (if needed)
• Setting up KPIs for various activities including but not limited to HR KPIs, training KPIs, recruitment KPIs, among others.
• Providing access to HR software
• Some EOR service providers like Tawzef offer business process outsourcing services (BPO), which include IT services and call center outsourcing.

When should you use an employer of record?

Now that you’re familiar with the top services offered by employers of record, you maybe wondering: When should I use an EOR?

Companies often turn to employers of record in one or more of the following situations:

• They want to open a branch in a different country
• They want to start operations in another country till they decide if they’ll establish a new branch there (or not)
• They want to reduce administrative costs locally or internationally
• They want to cut hiring costs (so they hire from countries where there’s lots of talents but hiring costs are much lower)
• They want to grow their team by hiring talents from a different country
• They want to acquire or merge with a company in a different country or region

Are you looking for an employer of record to support your business needs? Looking for skilled employees in various fields in countries like Egypt where hiring costs are much lower than in Europe or the UK?

Get in touch with Tawzef and we’ll support your business and help you grow!