Find the Right Employer of Record (EOR) for Your Recruitment Business with These 10 Questions
What is an EOR and why work with one?
An employer of record (EOR) is a third-party company that acts as the legal employer of a business’s workforce. By partnering with an EOR, your recruitment business can outsource many of the administrative tasks associated with managing workers, such as payroll processing, taxes, benefits administration, and compliance with local employment laws and regulations.
Working with an employer of record can offer several benefits for recruiters:
- Outsource payroll and benefits, increasing cost-effectiveness
- Save time and resources by streamlining administrative processes
- Access profitable international markets without establishing a local entity
- Reduce legal risk by ensuring compliance with local employment laws and regulations
Working with an EOR can be a smart move for a recruitment business looking to streamline their operations, reduce their legal risk, and provide a high level of support for their workforce.
Although an EOR will simplify the hiring process for you, choosing which EOR to work with isn’t always simple and straightforward. That’s why we put together a few questions that will help you choose the right EOR for your recruitment business.
10 Q’s to ask before working with an EOR:
1. What is their experience working with recruitment businesses?
While most EORs are able to support recruitment businesses, not all of them are suitable or have experience in working with recruiters. Some EORs specialize in certain industries or job types, while others may have a broader focus. For example, LGWS is a full-service EOR that specializes in supporting recruitment businesses who are looking to make placements in the US.
2. What types of workers can they support?
It is important to ask an EOR what worker types they support because not all EORs are equipped to handle every type of worker. If your recruitment business is primarily placing temporary or contract workers, you’ll want to work with an EOR that has experience in managing these types of workers. Different types of workers often have different legal and employment requirements. For example, contractors may require different tax and payment treatment than full-time employees.
3. What does the onboarding process look like for various worker types?
In the recruitment industry, time is of the essence! That’s why it’s important to make sure the EOR can provide a streamlined and efficient onboarding process. The process should be quick, often being completed in a few days or even within 24 hours depending on the response time of all parties. Working with an EOR that provides a quick, smooth, and consistent onboarding process with all of your workers will help your recruitment business build a positive reputation with clients in the long run.
4. Can they ensure compliance with all local tax regulations and employment laws?
Employment laws and regulations can be complex and vary by state and industry, especially in the US. It can be challenging for international recruiters to keep up with legislation changes and ensure compliance. If the EOR you’ll be working with is able to ensure compliance with all local tax and employment laws, you’ll be able to make placements with complete confidence. The EOR may collect all necessary compliance documentation, run compliant payroll, withhold and file local taxes, and much more.
5. Can they assist with benefits administration?
Some EORs may offer a comprehensive suite of benefits administration services, including health insurance, retirement plans, and other employee and contractor benefits, while others may only offer basic payroll and tax services.
6. How user-friendly is their tech platform?
A simple, user-friendly tech platform is the key to success when working with an EOR. The platform should be intuitive, allowing your team to easily access all data and onboard new workers with ease.
7. How transparent is their pricing structure and what’s included in fees?
The pricing structures for working with an EOR can vary depending on their business model, the level of service provided, and the specific needs of your recruitment business. Some common pricing structures include either a flat fee or a percentage of payroll. It’s important to be aware of additional fees or pricing that varies dependent on the location of the placement.
8. What kind of support is available for you when your team has questions or concerns?
A high level of customer service is an important aspect of choosing the right EOR. An expert’s help being only one email or call away is a must when the inevitable questions or concerns arise throughout the hiring process.
9. Can they support you in scaling your recruitment business?
If you’re looking to scale your recruitment business, it’s important that the EOR you work with is aligned with your business goals and can provide the necessary support as your business grows. The right EOR should provide some flexibility and have the ability to adapt to your evolving needs.
10. How do they ensure the confidentiality and security of your workforce data?
Collecting, handling, and storing personal employment data can be a sensitive and risky process. It’s a good idea to better understand how the EOR you’ll be working with ensures security throughout their processes.
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.