In today’s world of globalization and increasing competition, companies are looking for ways to expand their business into new markets. One solution is to use the Employer of Record (EOR) service. EOR involves a company being the formal employer of an employee, although the employee is employed by another company (the client). In this article, we will take a closer look at in what situations the EOR service can be useful for companies and what are its advantages and disadvantages.
What does Employer of Record consist of?
Employer of Record (EOR) is a service whereby a company (Employer of Record) is the formal employer of an employee, although the employee is employed by another company (client). The EOR company is responsible for all legal and administrative duties related to the employee’s employment, such as paying wages, paying insurance premiums, resolving employment issues, etc.
EOR – when does it work?
The Employer of Record service is particularly useful in situations where a company wants to hire an employee in another country or wants to avoid the costs and difficulties of registering its business in another country. It is also beneficial for companies that want to hire temporary workers or contractors, as the EOR is responsible for all the paperwork involved in hiring, saving time and money. In addition, it can be useful for companies that want to hire an employee for a limited time or on a project without creating a permanent position.
EOR – a good way to try new markets?
Using Employer of Record services can be a good way to try out new markets, as it allows a company to avoid many of the costs and difficulties associated with registering a business in a new country. With an EOR service, a company can quickly and easily hire employees in a new market without having to invest in infrastructure or go through complicated registration procedures.
However, using EOR services is not a long-term solution and does not allow building a strong presence in the new market. Companies that want to achieve long-term success in a new market should consider registering their operations in the target country and investing in infrastructure and local resources.