By Globalization PartnersSeptember 2020
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Companies may experience growing pains as their headcount increases – especially if they’re growing internationally. But there’s a startup growth hack you may not have tried yet: partnering with an Employer of Record (EOR).
If your startup has already conquered its market, you’ll soon find it scaling at an accelerated pace. Scaling means a lot more than just adding more users or shipping more of your product. It can mean hiring new people and conquering new markets, not only locally, but globally.
An EOR can significantly impact many parts of your business by helping you accelerate growth at a global scale. The EOR takes care of the compliance, legal, financial, and HR aspects of your international expansion, while you focus on your company.
Here are five key ways an EOR acts as a startup growth hack:
#1: Time to Focus on What You’re Selling, Not the Red Tape
Startup founders want to be involved in every decision. But that means that you will spend a lot of time learning —and sometimes, making mistakes. HR, payroll and tax compliance are essential, but you didn’t start your own company to deal with time-consuming, repetitive tasks that detract you from what truly matters: creating original and impactful products and services.
Your number one resource is your time – and giving yourself more of it is a true startup growth hack. Why not offload part of the burden of legal and HR matters to real specialists? That’s precisely what an Employer of Record can do for you.
With an EOR, you can stop dividing your time between your company and understanding labor laws in every country you wish to hire. And you can even reduce the costs of administering benefits, streamline payroll operations, and begin to build your company’s path towards international expansion as you hire the best talent around the world.
#2: Hire Faster, Succeed Faster
You’ve probably heard this startup mantra a thousand times: hire fast, fire faster. This of course is easier said than done. You can be good at spotting talent, but depending on where you are hiring, the process could be complex, especially if you are hiring overseas. Drafting a contract and making sure you are compliant with all local labor regulations can absorb a fair amount of your HR department’s time, and you may not have dedicated HR resources available in-house.
A global EOR can ease that burden, as it specializes in international employment law and has local teams ready to engage with your candidates to get them onboard immediately and painlessly. An EOR can ensure that the proper amount of tax is withheld in each paycheck, that employees receive compensation according to local regulations, and that employees are provided a compliant benefits package. You can hire faster – and therefore succeed faster, which is key to success in the startup growth stage.
#3: Use Knowledge and Experience as Your Secret Weapons Against the Competition
Unless you are a serial entrepreneur, your path towards success will be full of uncertainties. One of those is when to expand, and where.
Finding and learning about an international market is key to a successful expansion. When you start a new business or introduce a new product, you will begin with careful market research. Deciding whether to enter a new market depends on your capability to navigate local laws and regulations.Finding and learning about an international market is key to a successful expansion. Click To Tweet
The good news is that you don’t need to become an expert. You just have to partner with the experts. With an EOR, you can avoid the challenges of learning about the intricacies of administrative duties in other countries and focus on delivering fantastic products and services to a new market. Many who work with global EORs significantly reduce the cost of expanding and gain better forecasting abilities by working with experienced professionals.
And part of that knowledge comes at no cost. You can learn a lot about the most popular countries for global expansion in Globalpedia. Knowing when to bring in experts to help you overcome challenges is critical to gaining ground against your competitors.
#4: Test New Markets with No Risk
There are several reasons why testing a new market could be worthwhile for your startup. Your home market could start to become saturated. Or the other way around: maybe your product was not as successful as you thought locally but may have better luck elsewhere. Finally, being the first-to-market in a significant territory can give you a big lead against the competition.
How can you expand your total addressable market while eliminating risk? If you have received funding, you may have the capital to absorb a higher level of risk but imagine having to explain to your investors that your expansion failed or was delayed due to a miscalculation.
By eliminating the need to set up an entity and dealing with compliance, an EOR will allow you to navigate new market challenges with ease. You find the candidates that you wish to onboard, and the EOR will serve as the legal employer, adding them to a locally compliant entity. The EOR takes care of payroll, taxes, and HR related functions.
Also, if you decide to leave an international market after determining that it’s not the place for you, an EOR can help you terminate the employees without the need to deal with the process of closing an entity. On the other hand, if your success is such that setting up an entity is the next logical step, an EOR can assist you with the transition.
By eliminating the need to set up an entity and dealing with compliance, an EOR will allow you to navigate new market challenges with ease. Click To Tweet
#5: Get First Pick from the Global Talent Pool
The best data scientist in Europe. And extraordinary marketing expert in Africa. An experienced security advisor in Asia. Can you dream about having them in your team? Now you can.
As remote work becomes standard in many organizations, so does the possibility of hiring people no matter where they live. If you work with an EOR, the hunt for talent becomes an international quest. You can now get the best person for the role, no matter where they live.
With an EOR, your company can hire anywhere in the world while avoiding the hassle of understanding complex laws, taxes, benefits, currency exchange, or payroll issues. But even more importantly, an EOR can help you guarantee competitive compensation packages to your high-value international employees, based on their country standards.
Working with an EOR is an excellent way for startups to offer employees great benefits without setting up the legal infrastructure needed to put these packages in place.
As remote work becomes standard in many organizations, so does the possibility of hiring people no matter where they live. If you work with an EOR, the hunt for talent becomes an international quest. Click To Tweet
Globalization Partners: Your Startup Growth Hack
An Employer of Record can help you beat the competition, access international talent, and increase global diversity for your team in record time. Globalization Partners has the team, the technology, and the solid worldwide legal infrastructure to power your growth. Interested? Learn what matters most when choosing an Employer of Record.