In a global market where flexibility and agility are key, and particularly in sectors where there is a worldwide talent pool you can draw on, there are now more options for hiring remotely than ever before.
And while the idea of having workers located somewhere other than your ‘home’ country or in multiple jurisdictions around the world simultaneously might be daunting, there are, however, a range of options that now make it easier for enterprises of any size to hire staff remotely.
For most businesses, an Employer of Record (EOR) is likely to be the most efficient, cost-effective solution. This is because an EOR can help you to ensure that workers are being hired in line with local employment and taxation laws. But without the need to set up a local entity, which can be time-consuming and inhibits a company’s agility and responsiveness.
For start-ups and SMEs, an EOR makes expansion into new foreign markets possible, as it relieves many of the burdens associated with overseas hires.
Therefore, if you are considering taking on remote workers, and/or want to find out more about the benefits of using an EOR, here are five key tips for making the process as straightforward and helpful as possible.
Reference for an employer of record:
1. Use an EOR provider for hiring across borders.
There are generally two options when it comes to hiring abroad — one is to set up a local entity in that country, and the other is to make use of the services of an Employer of Record provider.
The former course can be difficult for several reasons. For instance, it can be a lengthy, time-consuming process (as well as potentially costly). This in many ways runs counter to the entire approach underlying remote hiring. For example, giving your business added flexibility and making it more agile.
It also means assuming full responsibility for compliance. This presents challenges if you lack previous experience operating in that jurisdiction. So, you don’t have a full and rounded picture of what is required.
However, the company largely avoids these issues by engaging an EOR provider. This arrangement means that you are effectively entering into a partnership with a local organization that will then hire employees on your behalf. In this way, the EOR assumes responsibility for payroll and compliance (in terms of benefits, tax, and other labor laws), while you remain in charge of operations, i.e., roles and responsibilities, etc.
This approach means that you are not required to over-commit at the initial stages of an expansion through setting up an entity, that requires a local office and an HR team — instead, you can hire workers at the outset through an EOR, giving you time to get established and enabling you to then transfer workers on to your staff and payroll at a later stage when circumstances permit.
2. Ensuring compliance with local labor laws.
One of the risks commonly faced when hiring employees or independent contractors is the question of classification. Not having a thorough and up-to-date understanding of labor laws in a region with which you are unfamiliar easily leads to costly errors as to how workers are classified.
Misclassification is a particular risk when it comes to hiring independent contractors. These generally include self-employed workers who are taken on short-term to perform a particular task or for the duration of a project. However, if you hire contractors to work for you long-term, or in such a way that they are effectively working exclusively for you, this could mean that you are misclassifying them. This can carry some heavy penalties.
You avoid this, however, when you use an EOR. They will instead hire the workers for you and add them to their payroll. They take care of all payments, HR requirements, and compliance. In this way, you can engage specialist skills when you need them without falling foul of labor laws. Working with an EOR provider will enable you to hire people for the length of time required while ensuring ongoing compliance.
A full handle on local labor laws through engaging an EOR also delivers clear and tangible benefits to the workforce. They can be reassured that they are receiving all the benefits to which they are entitled under local laws. This includes sick leave, PTO, etc. It also assures them that appropriate taxes and other deductions are being made on their behalf.
3. Creating legal working contracts.
If you are a start-up, SME, or even a well-established enterprise with its own HR division, you are unlikely to have on-tap the legal knowledge or acumen required to create legal, binding, and compliant contracts for workers in countries that you are not familiar with.
Labour law is a specialist field. So anyone looking to hire workers abroad needs to know the requirements. This is where the services of an EOR provider come in.
They provide the specialist knowledge of the local law you need, ensuring you hire workers legally. But without you having to set up either an entity or your own-house HR team just for that jurisdiction.
You can still enjoy the benefits of local experience and a smooth onboarding experience for workers and full compliance. You can do this without having to directly manage the hiring process in-house.
4. Successfully onboarding employees remotely.
You may be working with an EOR to oversee the hiring process for remote workers and responsibilities for managing HR and payroll. Yet, directing the roles and responsibilities of workers hired on your behalf still rests entirely with you.
Therefore, you need to develop robust procedures and processes when hiring remote staff. This ensures that they have appropriate access to all systems, platforms, shared workspaces, etc., that they will require.
It makes little sense to streamline the onboarding process if unnecessary initial delays exist. These prevent remote workers from delivering the output and results that the company hired them for.
5. Good communication is key to your remote team’s success.
Much of the above includes ensuring compliance when hiring remote workers, and therefore the benefits of working with an EOR. Yet, the ultimate success or otherwise in terms of results lies with the enterprise undertaking the hiring.
For instance, your company will be responsible for managing and overseeing the employee’s workload, time management, PTO, and so on. This means that establishing open and effective channels of communication is essential, particularly when it comes to roles, responsibilities, and expectations.
In addition, good communication practices also need to be in place with your EOR. So, it is always helpful to establish a single point of contact. This way they are available to operate in the same time zone as you. This way information, news, and instructions can be conveyed in real-time.