Evaluating Employer of Record service providers: 10 key factors to consider

Employer of Record services have been around for decades. However, this solution has grown in popularity as a result of the recent move to remote working. Hiring internationally and facilitating remote work has never been so common or easy.

Engaging a global hiring service, like Employer of Record, simplifies international hiring and expansion into new markets.

An Employer of Record (EoR) is a third-party with an established entity in the country you wish to hire in. The EoR hires your workers in-country on your company’s behalf.

The EoR takes care of hiring, onboarding, in-country HR, and payroll. This consolidates costs, ensures compliance, and relieves administrative burden. Business leaders are then free to manage the day-to-day running of the organisation.

For more information on Employer of Record, visit our Ultimate guide to Employer of Record.

As remote work and international hiring become increasingly commonplace, more and more EoRs are popping up left, right, and centre. In an over-saturated market, businesses need to know the right questions to ask when considering which service provider to use.

Read on to find out the 10 key factors you should consider when evaluating potential Employer of Record service providers.

1. Is the EoR committed to compliance?

Hiring overseas can be a compliance minefield. Tax and employment laws vary greatly between regions. For example, US employment law is drastically different to that in the UK. As a result, an in-depth knowledge of local rules and regulations is key to a successful expansion. This is true whether you’re setting up an entity or hiring remote staff in-country.

When you engage an Employer of Record to manage your in-country hiring, onboarding, payroll, and HR, you are leaving the compliance side of things in the EoR’s hands. Ideally, this will relieve you of the administrative headache of managing compliance with local employment laws.

However, you need to be sure that your EoR provider is 100% committed to compliance. Some providers may cut corners to expediate timeframes – for example, allowing a worker to commence work before their paperwork has processed, or not completing due diligence when assessing local compliance risks.

Discuss compliance strategies with any prospective EoR. You need to be sure they centre compliance at the heart of their operations, even if this means slightly longer wait times to ensure all boxes are ticked.

2. What are their data protection standards?

As any employer knows, managing employee data securely is vital. When choosing to work with a global hiring service like an EoR, you need to know they have an secure and up-to-date data management system in place. Proper data management ties in with the need for total compliance, as many regions have strict data protection laws, such as the EU’s GDPR regulations.

Carefully study any potential EoR’s security and privacy policies. Check for the following:

• What is their data recovery plan, in the event of a system failure?
• Are they ISO27001-certified?
• What is the location of their servers?

Payroll data is particularly delicate and can cause serious trouble if mishandled. Find out if the Employer of Record has a platform on which you can review final payroll calculations. Mauve Group’s platform, Mauve Insight Platform, provides an overview of all worker payroll and data, accessible by the employer and employees at any time.

3. Where does the provider operate and who employs your workers?

Does the EoR have a legal entity in the country in which you wish to hire? If not, they will likely be using a third-party partner. This is not necessarily an issue, and most EoRs will work with trusted partners in some locations.

However, you need to know everything about all parties involved in your EoR agreement. Ensuring due diligence is done to verify the reliability of all parties involved is key to ensuring smooth implementation of the service as well as total compliance in-country.

Before selecting an Employer of Record that uses a third-party, you need to know:

• Who will handling performance issues?
• Who handles data transfer?
• Who handles local law updates?
• What due diligence has been carried out?

For more information on what to ask prospective service providers, visit our article Questions to ask an Employer of Record (EoR) provider.

4. Does the Employer of Record offer the right services for you?

When considering an Employer of Record, examine their overall service offering. Do they offer additional services that may be of use to your business now or down the line?

For example, if you are moving staff into the new country, do they offer visa and immigration support? Do they offer salary benchmarking to help you offer competitive remuneration packages in line with local expectations? In the future, if you decide to establish permanent operations overseas, can they offer you global Business expansion support?

In order to get the most out of your provider, consider working with an Employer of Record which can offer a range of supplementary or follow-on services. This will mean you have the opportunity to combine costs, save time, reduce admin, and build a strong relationship with a trusted partner.

5. Is the EoR provider flexible?

As well as offering the right complementary services to support your Employer of Record solution, it’s important that your chosen EoR is flexible regarding evolving workforce requirements.

Can they support part-time workers, independent contractors, or short-term contracts? Do they know the ins and outs of compliant hiring of all kinds in the country of hire?

Are their solutions customisable in order to meet your organisation’s needs, or are they trying to offer a one-size-fits-all solution?

6. Do they offer total pricing transparency?

Before you decide to partner with an EoR, you need to know exactly what you’re paying for. You should be certain there will be no hidden costs down the line.

You need to know about all service fees, payroll costs, and compliance expenses upfront. EoRs offering a straightforward pricing strategy show professionalism and reliability.

Partner only with a provider which can give a clear and comprehensive cost breakdown and will discuss any additional expenses with you, the client, before approval.

7. How does the EoR leverage technology?

In today’s world, you need to know that the services you’re relying on are leveraging cutting-edge technology to ensure compliance, efficiency, and seamless service provision. How is the prospective EoR using technology to simplify global hiring?

Do they have a platform where you can view all worker data? Are they utilising digital payroll systems and onboarding solutions, automated compliance tracking, and digital HR platforms to manage things like employee contracts and tax compliance?

Are they optimising their cybersecurity tools to safeguard sensitive employee data?

8. What is the EoR’s customer service standard?

When you’re choosing an Employer of Record, you need to be confident that the quality of their customer support is up to standard. What are their response times? Is support offered to employers and workers 24/7? Will you be assigned a dedicated account manager to ensure a bespoke service that meets your business’ unique needs?

What communication channels are offered and how easy is it to directly connect with your contacts at the Employer of Record? All these are crucial considerations when selecting the right EoR for your business.

9. Does the Employer of Record have a strong reputation?

As with any business, you want to know that the service provider you’re engaging is reputable and trustworthy. Luckily, we live in an age where customers can share their experiences and leave reviews of services.

Research what other clients are saying about the EoR you’re considering. Have they had positive experiences? Have companies with similar set-ups to yours had success with this EoR? Does this EoR specialise in supporting your industry?

You can also easily check ratings, certifications, and legal track records to assess credibility.

10. How long has the service provider been in business?

It is not a requirement for an Employer of Record to have been in business for a long time in order to provide reliable services. However, naturally, the longer your EoR has been in operation, the surer you can be that you’re working with true experts.

Mauve Group has been operating for almost 30 years, and many of our experts have been with the company upwards of 10, 15, and 20 years.

Our ISO 27001-certified teams have learned everything they know from their experience of Mauve’s own global expansion.

This unique blend of strong teamwork and decades of knowledge makes us a leader in the field of Employer of Record services, offering global Employer of Record and other employment solutions in over 150 countries.

Why Mauve?

With close to three decades of experience, Mauve Group is a trailblazer in the field of Employer of Record. Our experts keep compliance at the heart of our operations – a commitment which has earned us ISO 27001 certification.

Our dynamic suite of services supports organisations of all shapes and sizes to scale internationally, providing Global Visa and Immigration solutions, Salary Benchmarking services, Global Business Expansion solutions, and much more. This means we are can be your trusted partner – for life.

Our Mauve Insight Platform, which gives employers and workers oversight of all payroll and HR data at any time, coupled with our in-country experts, and commitment to ethical business practices, set us apart from our competitors and make us the right choice to help your business take the next step towards global mobility.

Contact our team today to find out how our Employer of Record service can support your business.