By Globalization PartnersMarch 2021
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Building your international team isn’t as easy as hiring someone in your base country. There are several different ways to approach this challenge, but the two most common are staffing agencies and an Employer of Record (EOR).
What is the difference between an Employer of Record and staffing agencies, and what do companies seeking out globalization need to know about both tools?
What is an Employer of Record?
When dealing with international hiring practices, one of the first tools you’ll often encounter is the Employer of Record. An EOR is a solution that is legally responsible for paying international employees, as well as handling employee taxes, insurance, and benefits.
For employees who are moving between countries, an EOR is also responsible for managing visa and sponsorship applications.
What is a staffing agency?
The other most common tool for globalization and hiring practices is the use of a staffing agency. These agencies work by matching employees with employers registered with the agency.
These pairings can be for temporary or long-term contractors. Staffing agencies will manage things like resumes and application documents as well as contact between employer and employee. They will also collect feedback from job placements to improve their services.
Advantages of an Employer of Record
EORs are ideal for any company looking to easily expand into global markets while still providing a suitable work environment. All of the responsibilities belong to the Employer of Record, which leads to improved compliance.
For countries with complicated international employment laws, this can be invaluable. Utilizing an EOR also means companies don’t have to worry about additional payroll taxes or co-employment arrangements.
Advantages of staffing agencies
Staffing agencies reduce both business liability and time to hire by matching employers and employees from existing pools of each. They save employers money and offer flexibility by tapping into their established talent pipelines.
Disadvantages of an Employer of Record
There are some issues with utilizing an Employer of Record for international hiring. For one thing, employers have less control and influence over their international teams. While it does take some of the load off your in-house HR division, it can also result in significant changes to company culture and standards.
Disadvantages of staffing agencies
Staffing agencies have their downsides as well. They may have deep talent pools, but training contractors and employees can take time. The distance and hiring process can create problems with company culture and team bonding.
Employers also have less control over the hiring process, and it is possible to encounter staffing agencies with subpar recruitment processes.
Globalization is challenging, but it’s not impossible. Contact us today to find out if our global Employer of Record solution could be a good fit for your needs.