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Choosing the Right Employer of Record: Things you Need to Consider

Choosing the right Employer of Record (EOR) is crucial for global businesses. Industry expert Scott Winter emphasizes the importance of specialist knowledge, transparent pricing, ownership structures, hands-on experience, and the blend of technology with human touch in the selection process. You EOR partner should align with a company’s needs, prioritising exceptional client service and trust.

Choosing the Right Employer of Record: Things you Need to Consider
Imagine standing at a crossroads, one path leads you to a thriving business with a satisfied, well-managed international workforce, and the other is riddled with hidden costs, administrative nightmares, and unhappy employees. That pivotal moment? Choosing the right Employer of Record (EOR). This choice can smooth out the complexities of global growth or create hurdles down the road. Guided by insights from industry expert Scott Winter, Co-founder and Chief HR Officer of Agility EOR, let’s unravel the key elements of choosing your EOR provider.

Specialist Knowledge

It’s a common saying that being a jack of all trades often results in mastery of none. Some firms try to spread themselves thin, offering a wide range of services in the hope of capturing a wider customer base.

When seeking an EOR, it’s essential that you identify those that have made EOR their sole focus. Why? Because a company dedicated exclusively to EOR services will have accumulated a wealth of knowledge that’s specific to the EOR field. They will possess the insights that allow them to anticipate obstacles, refine processes, and craft solutions precisely attuned to your needs. It’s not difficult to see that if you need to use an EOR, you’re more likely to have better experience using a company that dedicates 100% of their time to providing EOR services.

Transparent Pricing Structure
Many businesses are initially drawn to seemingly low service fees only to later find themselves feeling duped by all the hidden charges. These unexpected costs not only strain budgets but also breed mistrust and leave you feeling conned.

Scott Winter sheds light on this issue, stating, “It’s astounding how intricate and opaque pricing structures can be in our industry. Off the top of my head, I can think of over 20 different hidden charges I’ve seen other EOR providers implement.” Such complexities highlight the importance of understanding the full scope of costs associated with an EOR.

When searching for an EOR provider, it’s imperative that you interrogate costs thoroughly and request breakdowns. If you only get told a hidden cost when you ask the right probing question, what others costs are there you haven’t been told about? Opting for an EOR that provides a clear and comprehensive pricing structure not only safeguards your financial interests but also means you will have a more trustworthy and productive partnership.

Ownership Structure
Although not a factor that immediately comes to mind, this seemingly behind-the-scenes detail can profoundly influence the ethos, motivations, and operational strategies of an EOR, ultimately affecting the quality of service you will receive.

Privately-owned EORs often operate differently from their publicly-traded counterparts. Without the constant pressure of satisfying a broad base of shareholders and meeting quarterly financial targets, these companies can channel their focus inwards, emphasising service quality, innovation, and long-term client relationships. “Private ownership allows an EOR the flexibility and autonomy to truly put clients at the heart of every decision. They are not juggling the expectations of external shareholders with the needs of their clients,” notes Scott Winter, “This undistracted commitment often translates into policies that are tailored to client needs, quicker decision-making processes, and a general willingness to go the extra mile for client satisfaction.”

Industry Experience
EOR’s who have management teams with a long tenure in the EOR industry, offer them unique strategic insights and practical guidance that newer entrants simply can’t replicate.

Dealing with complex labour laws, intricate tax regulations, and navigating through cultural nuances demands more than just a theoretical understanding; it requires hands-on experience. EORs with an experienced operational team can draw from real-world scenarios, past challenges, and successes to offer you a better service than those without that experience.

The EOR sector, being relatively nascent, has attracted a plethora of players. While the size of the EOR might suggest capability, clients often find themselves liaising with HR or Account Managers who, despite their titles, have limited hands-on experience with the intricacies of EOR. Those with the depth of experience you require may be several layers removed from you as the client. It’s a huge challenge when your HR contact and Account Manager lacks the seasoned expertise you’re counting on.

Balanced Approach to Technology and Human Expertise

Technology is indisputably a game-changer, streamlining processes and offering new avenues for interaction. Yet, in the complex realm of HR, the human touch remains irreplaceable.

Consider a scenario where things don’t go as planned – perhaps a payroll discrepancy or a delicate employee relations issue. In such instances, a sleek dashboard or an automated response system is not what you want to rely on. You want to know that the problem is going to be solved. Someone with expertise who can understand your problem, empathise and action a response. As Scott Winter, aptly puts it, “When challenges arise, it’s the human expertise in HR that counts. A sophisticated platform is great, but it won’t empathise with your concerns or offer experienced guidance.”

Entities vs Partner Model
Should you choose an EOR partner who only operates in countries with their own entities, remain agile with an EOR provider who only utilises partners, or perhaps embrace the best of both worlds through a hybrid approach? Each choice presents its own symphony of benefits and challenges.

An entity-based EOR has legal entities in countries they operate. This offers them tighter control over operations and deep familiarity with local regulations. As Scott Winter states, “Having an entity is like having home turf advantage. Direct operations mean direct solutions.” EOR providers who solely take this approach often only offer services in a handful of countries. Maybe you only need to expand to the UK, or even a region like Europe for example, in which case an EOR provider taking this approach will be the right one for you.

Contrastingly, the partner model sees the EOR teaming up with local partners in various countries. This provides a wider global reach and local insights without the overheads of establishing own entities. Winter points out the model’s agility: “It allows and EOR to tap into local expertise and adapt swiftly to client needs.”

Enter the hybrid model – a blend of both worlds. EORs with a hybrid approach own entities in key markets but partner in other regions to enable them to continue offering local knowledge and expertise. This strikes a balance between control and flexibility. “The hybrid model ensures your EOR provider is grounded where you need it to be, yet nimble enough to cover expansive territories,” notes Winter.

In making your choice, consider your business’s priorities and scale. Each model has its strengths, but as Winter emphasizes, “The real metric is exceptional client service, regardless of the model.” Ensure your EOR aligns with your goals and values.

In a rapidly evolving business landscape, the significance of choosing the right EOR partner cannot be understated. It’s not merely about tapping into specialised services or avoiding hidden costs; it’s about securing a future where you and your employees are able to trust your EOR provider. Trust means everything, and allows you to concentrate on adding value to you and your business.

As Scott Winter reminds us, “The heart of a business lies not in its technology or even its processes, but in its people.” Your EOR choice should reflect this ethos. It’s about finding a partner that understands this balance, appreciates the intricacies of human relationships, and offers the expertise to navigate the complexities of your global workforce.

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