3 Advantages of Outsourcing Payroll to an Employer of Record (EOR)
As a recruiter looking to hire in international markets, working with an employer of record (EOR) can provide numerous benefits for your business. One of the major ways that an EOR can help your recruitment business save time and costs and improve scalability in international markets is by taking care of payroll.
What does an EOR do?
An EOR is a third-party company that assumes responsibility for all aspects of employment, including payroll, benefits, and compliance. By partnering with an EOR, recruiters can access international markets without establishing a local entity. EORs help recruiters free up valuable time and resources that would otherwise be spent on managing payroll and HR functions in-house.
According to Valuates, “The Employer of Record market is anticipated to grow as a result of factors such as the ease with which businesses can expand into international markets, the low cost of human resources, the lack of a local incorporation requirement, immigration compliance, guaranteed local compliance, and the absence of additional payroll tax requirements.”
Why outsource payroll to an EOR?
1. Compliance, compliance, compliance!
International payroll processing can feel overwhelming, especially if you’re taking it on in-house. If you’re a recruiter making placements in various international markets, especially the US, it can be challenging to understand all employment laws and remain compliant while hiring and making payments.
When it comes to compliance, an EOR is an invaluable partner for recruiters operating in international markets. EORs specialize in employment law and regulations and have a deep understanding of the complex legal landscape that recruitment businesses must navigate. By partnering with an EOR, especially an EOR that specializes in helping recruitment businesses like LGWS, recruiters can gain access to this expertise and ensure that they are fully compliant with all relevant laws and regulations.
EORs can help recruitment businesses stay compliant by managing payroll, tax withholding, and reporting requirements on behalf of their clients. They can also provide guidance and support on issues such as employment contracts, benefits administration, and worker classification. By taking on these responsibilities, EORs can help businesses reduce the likelihood of costly errors and mitigate legal risk.
2. Time and cost savings
EORs take on the administrative burden associated with hiring, including running compliant payments for your workforce. Outsourcing payroll to an EOR can help your recruitment business grow, while saving time and money. EORs have specialized knowledge and technology to manage payroll and HR functions often more efficiently and cost-effectively than an in-house team.
Recruiters can leverage an EORs expertise, established infrastructure, and technology without having to invest in expensive software, training, or internal staff to manage payroll. This can help recruiters reduce their overhead costs and allocate more resources to core business activities such as recruitment, client acquisition, and talent management.
3. Scale operations with ease
Another major benefit of outsourcing payroll to an EOR is that it can provide greater flexibility and scalability for recruitment businesses. EORs can provide services on a pay-as-you-go basis, allowing recruiters to scale up or down as needed without incurring significant costs or disruptions to their operations.
Working with an EOR can be especially valuable for recruiters who have changing business needs and want to scale their business without hiring internal staff. Looking to break into a new market, such as the US? Managing multiple clients whose staffing needs are unpredictable? Outsourcing payroll to an EOR will allow you to focus on business growth, while your workforce gets paid on autopilot.
Disclaimer: This post is provided for informational purposes and should not be considered legal advice, the final word on this topic or a political opinion.