How an Employer of Record (EOR) Can Help You Scale Your Recruitment Business in 2023
Have you considered working with an employer of record (EOR) to scale your recruitment business in new markets? Many international recruitment businesses are turning to EORs for help with their global business strategy in 2023. This is because they offer many benefits, such as the ability to hire and scale your recruitment business flexibly, compliantly, and without establishing an entity in new markets.
What is an EOR?
An EOR is a third-party organization that serves as the legal employer for workers. EORs reduce the time and risk associated with hiring and managing workers across borders by taking on all legal employment obligations, such as payroll, taxes, benefits, and compliance with local labor laws.
Working with an EOR can help your recruitment business scale in new markets without the need for internal infrastructure and staff.
Hire across borders without establishing a local entity
Scaling a recruitment business in 2023 can be challenging due to talent shortages, the cost of setting up scalable businesses in new markets, client acquisition, and competition.
By working with an EOR, recruiters can gain a competitive edge and hire top talent across borders without owning a local entity. Setting up a legal entity in a new market can be costly. International recruitment companies can access talent in new markets, while saving money by leveraging the infrastructure that an EOR already has in place to handle employment-related tasks.
Reduce costs and the need for internal infrastructure
The cost of scaling can be a significant barrier for recruitment businesses with limited resources, but that doesn’t have to stop you from capitalizing on talent in new markets.
Along with reducing costs associated with establishing an entity, an EOR allows you to scale your recruitment business without the need for internal infrastructure and staff. Recruitment companies can leverage the technology, systems, and expertise of an EOR to scale efficiently and stay competitive in new markets.
Reduce administrative burden
Hiring in new markets, especially the US, often requires a significant amount of administrative resources, such as setting up payroll, managing benefits, and handling taxes. An EOR provides support with these tasks and takes on the administrative burden associated with hiring workers across borders, allowing you to focus on client acquisition and successfully engaging talent.
EORs typically offer a streamlined solution for recruiters to manage their international workforce, allowing recruiters to save hours on administrative work. EORs often automate contracts and other employment documents, allowing a recruitment business the freedom to scale in new markets without the concern of upgrading their own operational processes.
Ensure compliance in new markets
Expanding to new markets offers recruitment companies many benefits such as the opportunity to make more profit, access a larger talent pool, and remain resilient in changing economies and markets, but there are also some challenges associated with expansion.
The main challenge that hiring across borders presents is remaining compliant with all local employment laws, which can vary significantly by location in certain markets, such as the US. The US has several major employment laws at the Federal level, as well as legislation at the individual state and county level.
Compliance should always be a priority when hiring in new markets, but it can be difficult to keep up with evolving employment laws when you’re unfamiliar with the market or legal system in a country. Without the necessary knowledge of local employment laws, taxes, and payroll regulations, recruitment companies run the risk of unknowingly committing costly compliance errors or misclassifying workers.
An EOR can help ensure compliance with all local employment laws and regulations, reducing legal risk for recruitment companies and allowing them to scale worry-free in a new market.
Hire quickly
Partnering with an EOR can allow an international recruitment agency to quickly and easily expand into new markets without a local entity and internal infrastructure. This speed and flexibility can be particularly beneficial for short-term or contract hiring needs. EORs can be a convenient, cost-friendly solution for recruiters who are looking to hire quickly across borders.
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.