Five areas to weigh and five questions to ask before you choose a partner
Seventy-two percent of multinational companies rely on employers of records (EORs) for help managing their global employment needs, according to Worldmetrics research. That figure reflects how important EORs have become in powering global workforce strategies.
The growing reliance on EOR makes sense. Among a host of benefits, the right EOR makes it relatively quick and easy to hire contingent labor virtually anywhere in the world. This gives enterprises access to an ocean of talent, where they were previously restricted to smaller, local talent pools.
But not all EORs are created equal. For an enterprise managing workers across countries or business units, a poor provider can introduce fragmented processes and uneven service. In this article, we’ll share important considerations to help guide your choice, starting with the most important factor — what you need from an EOR in the first place.
Start with Your Workforce Requirements
Before comparing EOR providers, define the workforce you need them to support, both now and in the future. After all, you may be hiring in one country today and entering another market six months from now. An ideal EOR should be able to support both.
Project demands and business priorities also change, so your partner should also provide the flexibility required to scale your workforce up or down.
You also need to know which types of workers you need help engaging. An EOR legally employs contingent workers on your behalf, while independent contractors usually require AOR support. If your workforce includes both, choose a provider with both capabilities.
Look for Global Reach Backed by Local Expertise
An enterprise may need to engage workers across several markets through the same workforce program. The EOR should cover the countries you need today and be able to add new markets as your requirements evolve.
That reach should come with consistent service and reporting across the program. It must also be backed by on-the-ground experts who understand local law. Those experts should monitor legislative change and assess how new requirements affect your workforce, enabling the provider to update employment practices before changes take effect.
Understanding local requirements and cultural nuance also means the EOR is better able to offer a mix of benefits preferred by talent in each market.
They Must Be Compliance Experts
Global compliance is enormously complex, especially because regulations differ between countries and can also vary between states or provinces. As organizations expand their workforce across borders, their exposure to employment-related risk grows. An EOR’s status as the legal employer does not automatically make it effective at managing that complexity. The protection it offers depends on the depth of its compliance expertise.
The right EOR is led by compliance experts who understand how labor laws are enforced in each jurisdiction. When sensitive issues arise, those experts guide the response and stand behind the decisions made. This protection is critical because even unintentional noncompliance can lead to million-dollar fines and reputational damage.
Compliance expertise should be visible in the contracts used to employ your workers. Each agreement should reflect local law and be reviewed as requirements change. Generic templates applied across markets can omit mandatory terms, creating avoidable exposure. A capable provider will also assess the risk of each engagement and revisit terms if the worker’s location or responsibilities change, which is key to limiting permanent establishment exposure.
At enterprise scale, compliance decisions must also be documented and easy to retrieve. The EOR should maintain a clear record of the advice given and actions taken, with an escalation route for complex cases. Those records should be available if the enterprise faces an audit or dispute.
Human-led vs. technology-led partners
Technology has a useful role in compliance. It can monitor regulatory changes and flag potential issues for review. But it cannot interpret ambiguous law or weigh the circumstances surrounding a sensitive decision.
An automation-first provider may identify a risk and leave the enterprise to decide how to respond. A human-led service brings local regulatory experts into that decision, with technology supporting their judgment.
Human support is especially valuable during sensitive employment actions. After all, a dismissal that appears straightforward in one country may require formal consultation in another. Local experts can advise the enterprise before action is taken and guide it through the relevant requirements.
Their Experience Must Match Their Expertise
Look for evidence that the EOR has implemented workforce programs comparable to yours in size and geographic reach. Its payroll performance and service levels should be measurable. Case studies should also show how it maintains delivery when the program is operating at volume.
At People2.0, for instance, our case studies show how we have supported organizations with complex workforce requirements.
Their Infrastructure Should Drive Transparency and Efficiency
An EOR’s infrastructure should make a distributed workforce easier to run. Look for established systems that support accurate payroll and smooth benefits administration across markets. Employment contracts should be managed through the same reliable framework.
The provider’s platform should give the enterprise a consolidated view of its EOR workforce across countries and business units. It should show the status of each engagement from onboarding through offboarding, helping program owners understand workforce activity and spend across the program. Increasing your visibility is a big deal, as it helps eliminate hidden costs and compliance risk.
The platform should integrate with your VMS, HRIS, or ERP to reduce duplicate data entry and improve reporting. Because an EOR handles sensitive worker information, its privacy safeguards and cybersecurity controls should also form part of the evaluation. Ask how it stores information and manages data transferred across borders.
Questions to Ask a Potential EOR
There are many questions worth asking before choosing an EOR. As a starting point, the following five distil enterprise requirements into core questions to ask every provider:
- Which countries can you support, and can you maintain consistent service and reporting as our requirements expand into new markets?
- How do you ensure each employment contract reflects local law and is updated when requirements change? Do you proactively monitor risks like permanent establishment exposure?
- What would implementation involve, and how quickly can workers be onboarded in each market?
- Have you worked with other enterprises? Do you have evidence you can provide reliable delivery for a workforce of our size?
- How will your platform provide visibility across countries and business units? Can it integrate with our existing systems while protecting worker data?
Partnering with People2.0, a Proven EOR Partner
At People2.0, we’ve supported global workforce programs for more than 25 years. Our enterprise EOR and AOR services are relied on by Fortune 500 enterprises and backed by the capabilities you should expect from a trusted partner:
- Expert-led compliance: Local HR and compliance professionals interpret employment requirements and guide sensitive decisions, with integrated technology supporting their work.
- Established global infrastructure: Enter over 130 markets with support from our fully owned network of legal entities, payroll systems, and local HR and compliance professionals.
- Proven experience at scale: We support more than 150,000 workers annually.
Whether you’re expanding into new markets or strengthening an existing global workforce program, People2.0 has the expertise and infrastructure to support you.
Contact us to discuss your EOR needs.
Frequently Asked Questions
What selection criteria should an enterprise use to choose between EOR providers?
Enterprises should choose an EOR that can support their target markets and manage local employment reliably at the required scale. Its compliance expertise should be backed by experienced people and infrastructure that works with the enterprise’s existing systems.
What does an EOR provider do for an enterprise?
An EOR provider legally employs contingent workers on an enterprise’s behalf. It handles employment contracts and payroll, while administering benefits and maintaining local compliance.
What responsibilities remain with the enterprise when using an EOR?
The enterprise remains responsible for directing the worker’s day-to-day activities and making business decisions related to the role. Sensitive employment actions, such as dismissal, should be coordinated with the EOR so local requirements are followed.
Can one EOR provider support workers across multiple countries?
Yes, one EOR can support workers across multiple countries if it has the infrastructure and local expertise required in each market. Coverage varies, so enterprises should confirm that the provider can support their current markets and future requirements.
How long does it take to onboard a worker through an EOR?
The time needed to onboard a worker varies by country, the capabilities of the EOR, and the requirements of the engagement. The provider should give you a realistic timeline for each market before onboarding begins.
