7 Benefits of Using Employer of Record Services

Choosing the right Employer of Record service can make all the difference in a company's global expansion journey, driving growth and unlocking opportunities. Embrace the advantages of partnering with a top EOR, and elevate your organization to global success.

Employer of Record

Julienne Raboca

May 14, 2024

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Key Takeaways

Your business is growing—you’re breaking the mold, and now you’re ready to enter new, international markets.

But, becoming a global business isn’t easy. You have big decisions to make and new compliance concerns to manage, all while keeping up with your current operations. On your journey to the world stage, you might need some help from an employer of record service. 

Here we explore seven benefits of seeking expert help from an international employer of record to help you make the best decisions for the future of your business. 

Also read our breakdown of employer of record services: What Is an EOR and Why Should You Have One?

Benefits of Using an Employer of Record Service

Employers of record cover a lot of ground—their expertise and tools can help you navigate the international market, streamline your HR operations and plan for future growth.

Let’s explore the benefits of using such an employment service to support your growing, global business:

1. They remove the legal headaches

When you expand into a new country, you’ll likely need to hire additional, local help to work in brick-and-mortar facilities, complete the services your business offers, provide customer support and more. 

With help from a global employer of record, you can seamlessly add new staff to your team to quickly and efficiently onboard them into your workforce. How? By letting them act as your legal entity.

In most cases, a business that legally employs abroad must establish their local entities within the borders of their employees’ home countries in order to remain in compliance with local laws. But, when you use an employer of record, you can skip that step. EORs act as the legal employer as worldwide entities, exempting their clients from having to.

You can instead begin your talent search and hire new staff without waiting for local governments to approve your legal entity applications!

2. They manage compliance for you

When you expand to even just one more country, you suddenly double your compliance workload—unless you partner with an international employer of record, also referred to as globalization partners. 

EORs support compliance monitoring so you don’t need to be an expert on international labor laws, minimum employee benefits or business regulations to run a worldwide business. Their expert teams ensure that your business is always operating above board, even if you’re not familiar with laws in your new markets.

Employers of record are also international HR compliance experts legally responsible for keeping up with changing laws, research regulations abroad and complete mandatory reporting benchmarks related to labor and legal establishment. This saves you the energy of researching the labor and benefits laws in your new employees’ homelands, leaving that burden to the professionals while you build new teams.

Remove the pressure of required compliance with local employment laws, such as: 

  • Hiring, labor and termination
  • Financial reporting requirements
  • Minimum mandatory benefits for employees
  • Insurance coverage requirements
  • Professional license applications and renewals
  • Tax filing and payments

3. They save you time

Running a business is time-consuming—especially when you need that bandwidth to focus on innovation, operations, and international growth. Key stakeholders like presidents, owners and CEOs have enough on their plates; employers of record can help reduce their workload by automating and streamlining HR and tax-related tasks.

Take Tax filing and payments as an example—EORs file and pay taxes domestically and abroad as a part of their payroll management system. Importantly, they assume any liability for filing and payment mistakes, taking the risk off of your shoulders.

If an operational measure can save key stakeholders time, it can certainly do the same for other employees. When employees have fewer banal tasks on their plate, they can dedicate their time to innovation, brainstorming and project work.

Finally, EORs can also save time by providing simple, structured and paperless onboarding and HR data collection. As the old adage goes, “Time is money”! 

4. They help reduce overhead costs

Reducing HR workloads not only saves on overhead costs but also allows employees to focus on profit-generating activities such as service delivery, product development, and client communication.

Take benefits administration, for example. By partnering with an employer of record, firms gain access to an extensive international benefits network. This can secure advantageous group-rate prices, thereby optimizing staffing expenditures.

Employers of record can also help with financial planning: estimating costs, creating short- and long-term plans, and budgeting for future staffing investments. They keep you from hiring staff you can’t afford, and optimize the profits available for HR investments. 

Finally, EORs help eliminate routine tasks such as payroll management, compliance research, and other internal duties that represent a significant overhead.

Streamlined by an employer of record, employees can allocate their time more effectively to devise new efficiency strategies to cut costs further and drive growth in new international markets

5. They support accurate, on-time payroll processes

When it comes to operating a business, implementing reliable global payroll processes is vital to employee morale and your reputation as a business leader. Slipping can decrease employees’ trust in company leadership, or even motivate employees to look for work elsewhere. In addition, late payments without cause or prior warning—in some cases—are against the law.

By providing payroll management services, employers of record ensure that your company is always up-to-date on payroll tasks and tax functions. And, arguably most importantly, employers of record can complete these tasks without regular input from in-house HR or finance staff once employee onboarding is complete. 

Business owners can then stay on top of:

  • Paying employees accurate amounts
  • Taking the correct deductions from paychecks
  • Paying employees on time and on a regular schedule
  • Completing labor compliance reporting
  • Administering benefits 

6. They keep your org chart lean

Your business probably started small, and there are certainly benefits to maintaining a lean staff. Has that changed, and do you want to do something about it? 

Entrusting an employer of record with your HR procedures, regulatory tasks and tax-related obligations can prevent overstaffing: instead of hiring a team of employees to handle each of the three, you can assign them all to one entity. 

In addition, consider employers of records’ roles in international growth. Establishing a legal entity in a foreign country requires manpower—but, if you partner with an employer of record, you can bypass this step and reduce your staffing needs. Get yourself back on track with smaller communication chains and lower management workload!

7. They grant access to cutting-edge HR platforms

Technology changes quickly—investing in software to improve your operational efficiency always comes with a risk of future obsolescence and, thus, reduced ROI. 

But, employers of record develop their own platforms instead of relying upon third-party software providers to maintain their tech. Partnering with them gives you access to automated payroll services; EORs handle payroll solutions for growing companies looking to automate global HR processes. They calculate wages, deductions, and benefits, and deliver international contractor or employee paychecks via direct deposit in a completely paperless, streamlined process. 

Usually, an EOR’s proprietary platform or software are their major selling point—so they are always working on improvements behind the scenes. Employers of record also invest in their staff, who are trained to become experts in their own software and provide high-quality tech services. 

Finally, employers of record control the data that they use—instead of risking a security breach with additional third-party software, they keep your confidential company information self-contained. Get the best of both worlds: cutting-edge tech and seasoned professionals who know how to use it. 

Also Read: Know the difference between an employer of record and a professional employer organization or PEO 

For more than two decades, Payroll’s teams of HR and compliance experts have been helping worldwide businesses spread their wings, enter new markets, and generate profit. 

Plus, our all-in-one, user-friendly platform can help you monitor compliance efforts, plan future staffing investments, efficiently onboard employees and so much more. 

You’re ready to go worldwide, and Playroll is ready to help. Book a demo.

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