In a rapidly evolving world of corporations, the best way to access talented individuals for your firm is to hire from the global talent pool. India is one of the countries that provides highly skilled talent at lower costs.
However, hiring globally is a complex process due to the differing laws, which can be a very time-consuming process. This is where an Employer of Record (EOR) steps in.
An Employer of Record is a company that acts as the employment partner for companies looking to hire employees from different countries. This includes onboarding, payroll management, benefits administration, and compliance with local labour laws.
Who is EOR for?
An Employer of Record (EOR) is ideal for:
- Tech startups
- Remote-First organizations
Use of an Employer of Record (EOR)
- Entry Strategy to Specialised Markets: Apart from helping in remote hiring, an EOR also helps firms to expand on an international scale. For India, it helps foreign-based firms to set up a liaison office (LO), branch office (BO) or project office (PO). Moreover, a good EOR partner also offers support services after the business is set up to ensure the client's business operates smoothly. Their experts offer guidance on potential tax liabilities and benefits for each business structure.
- Global Mobility Services Support: An EOR provides hassle-free visa and work permits. This includes managing and ensuring the right paperwork, providing updates on visa applications, supporting employee relocation and maintaining transparency in tracking to keep the client informed at every stage.
- Payroll in India: It has been mentioned earlier that an EOR helps in payroll management. But this process also includes guidance on Indian HR policies, maintenance of employee records, processing payroll, which includes accurate disbursement, and timely deposits of tax liabilities.
- Recruitment: An EOR provider also handles recruiting and onboarding top talent that fits the company culture of the client firm. It conducts an in-depth consultation to understand the client firm's values and hiring requirements, uses effective recruitment methods and wide network to find most suitable talent, benchmark client's remuneration packages against those of the competitors in the same industry or location, conducts screening and evaluation, provides full candidate insight for right decision making, and finally selects the candidates and carry on the onboarding process to integrate the employee in the theam through EOR solutions.
Risks of hiring without an EOR
- Legal challenges and risk of penalties due to a lack of guidance regarding laws and taxes.
- Higher costs and delays in setting up a physical entity
- Administrative errors while managing payroll, benefits in multiple regions
- Limited market access and slower growth due to the complexities of managing hiring across multiple regions
- Reputational damage in the market due to legal and compliance errors.