An Employer of Record (EOR) is something you may never have come across before.
But it can be enormously beneficial, especially for smaller businesses. The World Economic Forum praises EOR as a leveller to help smaller firms hire abroad, even when they don’t have the same resources as larger businesses. With talent moving overseas and certain skillsets growing in other global economies, you might want to source employees from, say, Italy or Brazil.
But how do you deal with international employment law, benefits and other legal miscellany on top of everything else you have to do in a day? Well, you could do with an Employer of Record.
What is an Employer of Record?
An Employer of Record is an organisation that is responsible for legal matters surrounding employment, plus the legal responsibilities that go hand-in-hand with employing them.
As the employer, you’ll deal with the work side of things, such as assigning tasks and managing the employee. Meanwhile, the Employer of Record handles:
Payroll
Benefits
Tax
Remaining compliant with local employment laws
Employee record-keeping
Onboarding/offboarding
Admin tasks that relate to the employee
Though Employer of Record is legal in most countries, you must take local labour laws into account when using one of these services.
When is an EOR a good idea?
Working with an Employer of Record is a good idea when you’re looking to explore new markets. It also works if you want to take on new talent that might not be based in the UK or you want employees on the ground ready to grow your business in another country.
To give you a fuller idea of what to expect, here are the pros and cons:
Pros
Access talent from round the world
Keeps you compliant with international laws
More flexibility in working with staff
Simplifies the hiring process
Quicker to scale and expand your business
Good for exploring new international markets
Cons
May be limits as to where you can hire from
Different countries impose legal limits
Loss of control over some business operations
Whichever provider you go for, it means an extra cost to consider. The typical cost is £240–£650 per employee per month.
Who are the big players in EOR?
These are the biggest names around in the Employer of Record space.
Pebl
Pebl (formerly Velocity Global) prides itself on its AI-powered platform, offering hiring, workforce management and compliance in one place, and promises no hidden fees. You can use its Employee Cost Calculator to find out how much you’d be spending per employee.
Features
Payroll assistance
Mobility services
Reporting and analytics
Employee data tools
Around-the-clock support
Operational in over 185 countries
Price: Pricing isn’t listed on the website, so you need to request a quote from Pebl.
Find out more
Rivermate
Rivermate boasts of unmatched support, with a dedicated account manager and 24/7 /365 day human support available to its users. With custom contracts, payroll and benefits tailored to your business’s needs, they are one of the most flexible options on the market.
Features
Local experts on demand for country-specific challenges
24/7 /365 day human support available through WhatsApp, Slack, email or phone
Dedicated account manager
Established global network in over 180 countries
Price: No set pricing – custom quote given upon enquiry
Find out more
Rippling
Rippling is more of a HCM (Human Capital Management) system. Your employee will be guided through every stage of their time with you, from onboarding to transitions and promotion, and ultimately to offboarding. Again, everything is in one place with smooth, seamless processes.
Features
You can automate global compliance
Integrations with 600+ apps
Build custom policies
Automate almost anything with workflow builder
Easy-to-use report builder
185+ countries served
Price: No set pricing – get a free quote from Rippling.
Find out more
Deel
Deel claims that it can save thousands in entity set-up costs per country. It’s a wholly owned entity, rather than relying on third parties, so your employees have a central contact point.
Features
Handling local payroll services, benefits administration, taxes, and compliance
Benefits packages tailored to each country
Support from local HR and legal experts
Multi-currency payouts
Over 15 flexible methods to pay your team
Operates in over 160 countries
Price: Starts at $599 (£474) per month
Find out more
EOR vs PEO
You could opt for a Professional Employer Organisation (PEO) instead. Rather than the full control that an EOR has, this is more of a ‘co-employer relationship’. Let’s look at the core characteristics of a PEO against an EOR.
Business presence
PEO: As the client, you must have a physical presence in place where you’re doing business
EOR: Find employees wherever your EOR operates
Insurance
PEO: Businesses must have coverage under the PEO’s insurance policy but if they fall short, you need to take out additional insurance
EOR: EOR carries out its own insurance policies
Minimum number of employees
PEO: PEO needs a minimum number of employees
EOR: EORs can work with organisations of any size
Read more
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