What is a Global Employer of Record Service (EOR)?

EOR Key Terms and FAQs

WHEN SHOULD YOU HIRE AN EOR SERVICE?

Businesses rely on employers of record to help them hire employees in multiple countries. With an EOR, a company can expand operations into another country without having to set up a local entity, which can be expensive and take months or longer to accomplish. Working with an EOR allows businesses big and small to employ and pay workers in other countries quickly and affordably.

HOW CAN AN EOR BENEFIT YOUR BUSINESS?

An employer of record employs workers in another country on your behalf. For example, if your company exists in the United States and you want to hire an employee in Mexico, you may do so using an EOR. Hiring and paying an international professional must comply with their country’s laws and ordinances. Between the bureaucracy and legalities, this can be complicated and expensive. With a global Employer of Record (EOR) this process is simple, compliant and cost-effective.

WHAT HR AND LEGAL FUNCTIONS CAN AN EMPLOYER OF RECORD PERFORM?

Let's look at the legal functions an employer of record perform.

• Allow businesses to hire full-time workers in other countries legally
• Run payroll for employees in other countries
• Handle benefits administration for global workers
• Manage international contractors
• Distribute employee stock options across national borders

EORs are experts in local employment laws. They make sure that you are in compliance with all the relevant regulations. This can save you a lot of time and money in the long run, as you will avoid costly fines and penalties.

Cost savings: EORs can save you money on a variety of costs, including payroll, taxes, and benefits. They also have access to a global network of talent, so you can find the best employees for your business, regardless of location. They also have economies of scale that can help you save money on things like payroll processing and benefits administration.

EORs take care of all the administrative work, so you can focus on growing your business. They handle things like payroll, taxes, benefits, and HR, so you can free up your time to focus on other areas of your business. This can save you a lot of time and stress, and it can help you to grow your business more quickly.

Peace of mind: Knowing that your international HR needs are being taken care of can give you peace of mind. You can focus on running your business, knowing that your employees are taken care of. EORs have a proven track record of success, and they can help you to avoid costly mistakes.

HOW CAN A GLOBAL EMPLOYER OF RECORD BENEFIT YOUR BUSINESS?

In today's global economy, businesses are increasingly looking to expand into new markets. However, expanding into a new market can be a complex and time-consuming process. One of the biggest challenges is complying with the local employment laws. This is where IsoTalent can step in and help.

IsoTalent is a global EOR company that specializes in helping businesses hire and manage employees in other countries. We take care of all the legal and administrative work, so you can focus on growing your business.

Expert Insights: Understanding Global EOR Strategies

How does a global EOR facilitate international hiring for my business?

An international hiring strategy is a planned approach to recruiting and onboarding talent from different countries to meet organizational objectives. It involves identifying global talent needs, navigating legal and cultural considerations, and establishing processes for hiring and managing international employees effectively.

• Global EORs have established legal entities in multiple countries, enabling them to act as the official employer of record for your multinational employees. They're part of your team, but we handle the bureaucracy and legalities.
• An EOR handles all administrative tasks, including payroll, taxes, benefits, and compliance, allowing your company to focus on core business operations.
• By leveraging global networks and industry expertise, EORs efficiently navigate local labor markets and cultural nuances to facilitate smooth international hiring.

How Does Multinational Hiring Help with HR Initiatives?

Multinational hiring enhances HR initiatives by bringing diverse perspectives and skillsets to the organization. It expands the talent pool, fosters cultural diversity, and supports workforce development efforts, ultimately contributing to HR goals related to talent acquisition, employee engagement, and organizational growth.

How Do I Employ International Talent through an EOR?

Employing international talent may seem complex, but it can be streamlined and simplified through the use of an Employer of Record (EOR) service. An EOR acts as the legal employer for your international hires, handling payroll, tax compliance, employment contracts, and other administrative tasks.

Partnering with an EOR enables U.S. organizations to focus on their core business objectives while ensuring legal compliance and a smooth onboarding process for international employees. It eliminates the complexities associated with international employment, allowing organizations to seamlessly integrate global talent into their hybrid teams.

What legal and compliance responsibilities does a Global EOR handle?

By partnering with a global employer of record (EOR), you offload the administrative, legal, and logistical tasks of multinational hiring to that agency. You don’t have to change anything about your business structure or employment practices — leave the complexities to the EOR!

• A Global EOR takes on the legal and compliance responsibilities of a traditional employer, ensuring adherence to local labor laws and regulations in each country of operation.
• They manage payroll processing, tax withholdings, employee benefits, and statutory contributions as per local requirements.
• Additionally, they handle employment contracts, work permits, visa applications, and other documentation necessary for compliant hiring.

Can a Global EOR help us access a diverse talent pool in different countries?

• While most EORs do not include candidate sourcing, IsoTalent offers a unique agency hybrid: recruitment and international advisory and EOR solutions. This global model broadens your access to a diverse talent pool worldwide by supporting recruitment and employment efforts in multiple countries.
• Our team has local knowledge and robust pipeline connections, enabling us to identify qualified candidates suited to your business needs and cultural fit.
• With IsoTalent's global recruitment and EOR solutions, your organization can attract and hire top talent globally, fostering a dynamic and multicultural workforce.

How does a Global EOR ensure compliance with local labor laws and regulations?

• Global EORs have in-depth knowledge of the labor laws and regulations in each country they operate, ensuring full compliance with employment and tax requirements.
• They regularly monitor changes in local laws and adapt their processes accordingly to avoid legal risks.
• By acting as the legal employer, they assume the responsibility of staying up-to-date with evolving regulations, allowing your business to operate confidently in foreign markets.

What level of control does my company retain over the hiring and management of international employees with a Global EOR?

• While the Global EOR handles administrative and compliance aspects, your company retains operational control over the daily management and tasks of international employees. These are YOUR team members; we simply take care of the distracting, time-consuming aspects of employment and compliance.
• You have complete authority over the employees' job assignments, performance evaluations, team communications, and work-related decisions.
• This partnership allows your company to focus on strategic business objectives while leaving HR and legal complexities to the EOR's expertise.

What is a Hybrid or Distributed Team Structure?

A hybrid or distributed team structure is a work arrangement that combines in-office and remote employees, often located in different geographic regions. This structure allows organizations to harness the benefits of both physical and remote work, enabling flexibility, cost-efficiency, and access to a global talent pool.

What is Salary Arbitrage?

Salary arbitrage refers to the practice of leveraging wage differentials between countries to hire talent at a lower cost. It involves hiring skilled professionals in countries with lower cost-of-living or wage expectations to achieve cost savings while maintaining or improving the quality of work. Salary arbitrage is often used to optimize HR budgets and improve the cost-effectiveness of talent acquisition strategies.

What are the Cost Benefits of Salary Arbitrage?

One of the most compelling advantages of international hiring is salary arbitrage. In many countries, the cost of living and wage expectations may be lower than in the United States. This cost differential can be leveraged by organizations to hire highly skilled professionals at a more competitive rate while maintaining quality standards.

By strategically hiring in countries with favorable wage dynamics, U.S.-based organizations can maximize their operational efficiency and allocate resources more effectively. This cost-effective approach can significantly impact the bottom line while ensuring access to top-tier talent.

Global EOR Recruiting from IsoTalent

Global EOR recruiting opens up a world of talent for your organization ‚ whatever the size and scope of your teams. Distributed team models have made it easier than ever to recruit, employ, and communicate with topnotch talent, wherever they happen to live.

Ready to level up your recruitment? Expanding your recruitment efforts to international talent pools offers a wealth of benefits. From accessing diverse skill sets and perspectives to enhancing your organization's global reach and competitiveness, these are the advantages of a more expansive approach to talent acquisition. All it takes to legally employ these workers is a global EOR (employer of record) partnership.

Explore how tapping into international talent and hiring with an EOR can be a game-changer for your organization's growth and success.

Explore Our Global Recruitment Solutions