Receiving a job offer from a company is an exciting experience, opening the door to the next stage of your career. But what happens when you discover the company you expected to be working for will not be your actual employer? Instead, you’ve just been hired by an Employer of Record. What does that mean for you?
An Employer of Record (EOR) hiring model is becoming more common as companies look to expand into countries where they may not have an entity set up. In short, an EOR streamlines the process, making it easier for the company to hire quickly, cost-effectively and compliantly. The company can tap into top talent anywhere, like you.
While still largely unknown to many people, the EOR model is expected to grow at a steady but impressive compound annual growth rate (CAGR) of 6.9% through 2028. More workers will find themselves working for a multinational company (MNC) in their day-to-day functions, while officially being employed by an EOR.
It’s understandable that if you are not familiar with how an EOR works, you may be hesitant to accept an offer of employment. But before you decide it’s not for you, consider the many benefits. An EOR enhances the worker experience in a myriad of ways and opens more doors for career growth.
How does being hired by an EOR enhance your career?
✔️Compliance ✔️Tax Protection ✔️Supplemental Benefits ✔️Local Support
Streamlining regulatory compliance
Managing a cross-border workforce is a major undertaking for any company, especially if the HR department is unfamiliar with labor and immigration laws. After all, these regulations vary from country to country and they are constantly changing. Even within a country, there may be different city, state or territory laws that apply.
An effective EOR is well versed in managing a workforce in your country or jurisdiction, so they can ensure your working conditions meet local standards.
As your employer, the EOR will deliver compensation accurately, in your currency and on time – including bonuses and pay raises. They will also administer applicable statutory benefits, verifying contributions are being made and you get the time off you are entitled to.
With an EOR by your side, you are well-taken care of and 100% legally employed locally. This saves a lot of time if you need to submit a certificate of employment, such as for a bank loan or visa application.
Offering competitive supplemental benefits
Benefits are a big deal for you. If you rely on benefits for your family, they are a key piece of your compensation package.
When an MNC enters a new market, they may not be familiar with the benefits landscape. The EOR will help them to bridge the gap. So if you are being hired in Latin America, for instance, the EOR will advise the hiring company of the typical benefits workers expect there.
In addition to managing statutory benefits, an EOR can also work with the hiring company to provide competitive supplemental benefits that are customary and matched for your local market.
MNCs, in order to instill a sense of unity across global teams, often look to sync up the benefits they offer to everyone – no matter where they are working from. For workers hired by an EOR, this means they may be extended a diversified, robust supplemental benefits package with novel offerings they would not typically enjoy in their market. Some EORs can even work with the hiring company to develop tax-favored equity ownership options for workers.
Simplifying your tax situation
To reduce fixed costs and avoid the challenges of establishing an entity abroad, an MNC may engage a worker as an independent contractor. However, this approach is not without its challenges and can trigger negative implications for the company as well as the independent contractor – both financially and legally. At the same time, as an independent contractor, the worker will be responsible for tracking expenses, reporting revenue and filing taxes.
Countries around the world are also becoming increasingly strict in how they regulate the practice of engaging independent contractors. For example, the United Kingdom recently added new rules added to its IR35 code, which is designed to combat tax avoidance by workers.
The good news is that being hired through an EOR can reduce your global tax liabilities and reduce your administrative tasks. When you are employed by an EOR, as opposed to working for an MNC as an independent contractor, you can rest assured knowing your taxes are being managed efficiently and compliantly.
Providing you with localized support
In recent years, the ‘workforce experience’ has come under the magnifying glass, with workers prioritizing company culture, stability and personal wellbeing. The EOR hiring model puts these important features front and center in the worker experience.
For example, GoGlobal has local HR representatives in over 40 countries around the world. These are people that speak your language and are in your timezone.
You will always have a helpful expert available to answer questions or address concerns when it comes to payroll, benefits or taxation. Since regulatory compliance is a key part of the EOR industry, you can also gain ‘peace of mind’ in knowing your legal rights and interests are being tended to.
Expanding a company into new markets abroad is a strategic business move, unlocking more opportunities for growth and prosperity. The EOR hiring model can allow you to grow alongside a company and enjoy the many benefits global expansion offers.
You get to live where you want and enjoy employment opportunities around the globe. You can do your job effectively and live your life freely — without having to move or find a local employer. Your hiring company gets to have your talent and expertise. And the EOR staffs your local, on-the-ground HR team — ready to help you with anything you need.
It’s a win-win!
Learn more about how working for an EOR can help you grow your career.
Meet some of our local reps by visiting our YouTube channel.