The ultimate guide to Employer of Record

Employer of Record (EoR) is on the rise. Remote working has become the norm since the COVID-19 pandemic, and workers now highly value flexibility. From an employer’s perspective, hiring overseas can expand the potential talent pool of job applicants.

It lets companies test out new markets. However, setting up operations in a new country can be costly and time consuming. More and more employers are seeking solutions to help them compliantly hire and onboard workers overseas, without the need for their own entity overseas.

This is where Employer of Record comes in.

What is an Employer of Record (EoR)?

An Employer of Record (EoR) is a third-party provider that hires and employs staff in-country on behalf of your organisation. The EoR will have an entity already established in the desired country.

This global hiring solution compliantly hires the client organisation’s workers, in line with all local employment regulations. So, the organisation does not need to establish its own in-country entity. Meanwhile, the day-to-day management of workers remains with the client.

Can my business use an Employer of Record?

You may think hiring and expanding overseas is something only done by large businesses. However, 99.8% of businesses in the UK are small-medium sized enterprises (SMEs). And as of the latest data in 2023, 64% of these intended to expand into European and North American markets.

Not all businesses will wish to establish their own entity abroad. This is due to the costs and time involved. This is why Employer of Record is an excellent option for SMEs, across all industries, which wish to hire abroad.

You can, therefore, utilise this global employment solution to employ workers seconded overseas and hire remote local workers in other countries.

How does using an Employer of Record benefit to my company?

Using a global employment service can be highly beneficial to companies in a number of ways. These include:

Cost-efficient

Using this global hiring solution saves costs in a number of ways.

Significant costs are generated when establishing a business entity in a new country. These costs may include staff remuneration, insurances, taxes, utilities, property rental or purchase, and more.

Attempting to establish a foreign entity without the support of local experts also poses serious compliance risks. If a company is found to be non-compliant with local employment and tax laws, it faces large fines. There is also the risk of potential legal proceedings and reputational damage.

Mauve Group has an experienced in-house Compliance team, and a network of local partners, all over the world to ensure our clients remain 100% compliant throughout the process. Using an EoR payroll solution means your staff receive timely and compliant salary remittances.

The costs of hiring multiple service providers, such as accountants, consultants, and lawyers, can be consolidated via using a global hiring solution.

Services become streamlined when using an EoR service from a global employment solutions provider like Mauve Group.

Supports projects of any size and duration

A global hiring solution can support both short- and long-term global mobility projects. This service can employ any number of employees, from one to multiple. Global hiring solutions are a sensible choice for companies seeking to try out a new market without the commitment of establishing an entity.

Alternatively, a global hiring solution can support businesses for as long as they require. In addition, if your project continues long-term, and you do wish to set up an entity in that country, providers such as Mauve Group can support via Global Business Expansion services.

Leaves control in your hands

An Employer of Record handles the hiring, onboarding, HR, and ongoing employment of staff. This leaves you free to maintain the day-to-day management of employees.

Ensures compliance

A reliable global employment solution provider will never cut corners and will ensure compliance at every turn. This means making certain that all worker onboarding is completed and compliant prior to the individual starting work. When selecting an Employer of Record, doing your research and making sure the service provider values compliance is key.

Guarantees worker support

Making sure staff feel supported is paramount when managing remote teams. Engaging an Employer of Record means that you are guaranteeing in-country support for your global workforce. This ensures your employees have help and support on-hand in their time zones.

What to keep in mind when choosing an Employer of Record

There are lots of global hiring solutions out there. As the Employer of Record model becomes more popular, it is important to know what to look out for when choosing the right Employer of Record for your business.

What employment options does the Employer of Record offer?

• You need to know that the prospective global employment solution has the capacity to compliantly employ your workers abroad.
• Confirm that this global employment solutions provider is able to offer a full suite of global employment services.
• Ensure the Employer of Record is committed to ensuring 100% across the board. Cutting corners with compliance could endanger your business and workers.

Who will your workers be employed by?

• Is the global employment solution provider that you are considering the direct employer, or does it partner with a local entity in-country?
• If it partners with a local in-country entity, this is not necessarily a problem. However, you need to have visibility on all parties involved in your Employer of Record arrangement.
• Ensure you know exactly who will be responsible for your employees, who will be handling the transfer of sensitive data, and who will be in charge of keeping up-to-date with changes and updates to local laws?

What areas will the Employer of Record take responsibility for?

• An EoR payroll provider and global hiring service tends to be responsible for payroll, legal compliance, tax filing, and HR duties such as onboarding and offboarding.
• You must get clarity on the specific responsibilities any prospective Employer of Record will commit to undertaking.
• Keep in mind that the delegating of responsibility will also be determined by the laws of the country in which you are employing staff.

The employment contract: who is involved and what happens during termination?

• In all cases, the contract will be between the Employer of Record and the worker.
• When choosing an EoR, you should:
  • Ask to see the templates used for each region you wish to hire in.
  • Make sure you’re comfortable with all information in the contract.
  • Ensure that the information, notably pertaining to the global employment solution provider’s responsibility, the EoR payroll process, and employee working conditions, align with your company’s requirements and values.
  • Request to view any prospective provider’s termination procedure for the region in which you’re hiring. Make sure it’s in line with your company procedures.

How is data managed?

• When choosing an Employer of Record, you need to be sure they’re using state-of-the-art data management and security systems.
• Scrutinise the Employer of Record’s security and privacy policies to ascertain their compliance level.
• Questions to ask include:
  • What is their data recovery plan if their system fails?
  • Are they ISO27001 certified?

How long has the EoR been in operation?

• An Employer of Record does not have to have been in business for a long time to be reliable.
• However, partnering with an experienced provider means you can be sure you’re working with experts.
• Mauve Group is an excellent example. We have almost three decades of experience in the field of global mobility. Many of our in-house experts have been with Mauve Group for upwards of fifteen and twenty years.

Why choose Mauve Group’s Employer of Record service?

Mauve Group is a pioneer of the Employer of Record model. We were established in 1996 and now have almost three decades of experience in the global mobility arena.

Mauve Group’s Employer of Record service makes global expansion accessible by eliminating the cost and time commitment of establishing entities overseas.

Mauve Group ensures that our clients’ workers are employed 100% compliantly via our in-country entities. Our in-house Compliance team is devoted to ensuring all our solutions operate in line with the local laws and regulations everywhere we operate. We manage onboarding, offboarding, HR, and payroll. This allows you to focus on the day-to-day management of your global workforce.

Consolidate your costs and ensure your workers are completely supported by packaging our Employer of Record solution with any number of our complementary services like Global Payroll and Salary Benchmarking.

Mauve Group is proud to provide solutions in over 150 countries. We have wholly owned entities in over 70 and collaborate with trusted partners in the remainder.

Our team of experts ensure that your business, no matter your size or industry, can begin your global journey with ease and expert guidance.

Contact our team today to find out more about how Mauve Group’s Employer of Record service can help your business to go global.