Employer of Record Services
Globalization Partners is a leading global Employer of Record (EOR) offering one of the industry’s most renowned service suites. Those services have one goal in mind — let your organization grow without the burden of borders by identifying and then retaining international talent that’ll help you flourish.
What is a Global Employer of Record?
A global EOR is an outsourced back-office administrator for companies with international employees. In short, Employers of Record place their clients’ international staff on their own global EOR payroll. In doing so, the business no longer needs to undertake the long, complex, and financially onerous task of setting up a subsidiary within their international employees’ countries, instead using the infrastructure and established payroll resources of their Employer of Record partner.
The expanding company is still the functioning employer and the one all international staff report to. The EOR executes back-office payroll, benefits, and regulatory technicalities associated with international staffing. They can also provide other auxiliary HR duties the original organization doesn’t have the resources, bandwidth, or technical expertise to tackle themselves.
Employer of Record Company Types
There are two types of Employer of Record companies: companies using a consolidator, or aggregator model, and companies using a wholly owned infrastructure model.
- Aggregator model: One company serves as the umbrella organization and sub-contracts employment to providers in each country. These (usually small) providers are not built to scale, and there is a high risk of them not having the legal, tax, and HR know-how required for a public multinational company that is outsourcing its global legal infrastructure to a third party.
- Wholly owned infrastructure model: One company owns the entire infrastructure in each country and employs professionals on their own entities for their customers.
Partnering with the right Employer of Record will help unlock the full international potential of your company.
But do not fall into the trap of believing any of the following myths about how an EOR works. Otherwise, you may miss out on harnessing all of its potential benefits.
3 myths about how an Employer of Record works
Myth #1: Partnering with an EOR is the same as outsourcing.
Fact: Hiring through an Employer of Record is not outsourcing. While the EOR serves as the legal employer, your company makes all hiring and termination decisions and maintains full day-to-day control over the employee’s activities.
Outsourcing involves the farming of job functions through a third party. The outsourcing model has developed a bad name because it can sometimes be hard for professionals to know who is employing them, and essential instructions could be lost in translation.
Also, outsourcing is commonly associated with the reduction of quality control and security risks, as delicate intellectual property or consumer data could be mishandled by freelancers or contractors.
Due to the sometimes-murky employment terms and the lack of security and comprehensive benefits that come with full-time employment, highly skilled professionals may try to stay away from outsourcing employment models.
In comparison to outsourcing, an EOR offers several benefits:
- Control: With an EOR, you find the candidates, hire them, and then the EOR adds them to a legally compliant payroll. You maintain management, and you are the only one that can choose when to onboard them and, if necessary, terminate them.
- Transparency: When you partner with a reputable EOR, you and your employees will have a clear understanding of the terms of employment, as well as of the overall relationship between employer, employee, and EOR, all laid out in a compliant employment contract.
- Access to Talent: Highly skilled professionals are looking for competitive offers that include benefits. Through an EOR, you can offer employees competitive benefits packages that will help you attract top-tier talent.
- Intellectual Property: Can you trust your company’s intellectual property to an outsourcing agency? The answer is no. When you hire through an EOR, you can make sure that the intellectual property of your company is fully protected by compliant employment contracts.
Myth #2: An Employer of Record is just like a staffing or temp agency.
Fact: An Employer of Record is best utilized for hiring long-term employees.
A staffing agency provides companies with candidates to fill mostly temporary positions. Temp agencies in particular focus on specific industries that have a high demand for seasonal workers.
The Employer of Record model focuses on allowing companies to hire permanent full-time positions globally and across all industries.
Myth #3: You cannot use an Employer of Record for hiring executive roles.
Fact: You can use an Employer of Record to hire for all roles and positions in your company.
Many businesses are validating that working remotely permanently not only works and can increase productivity, but it can also open the opportunity of capturing talent without regard to country borders or immigration policies.
An Employer of Record allows you to offer your employees an attractive benefits package, which gives you access to top international talent. Being able to provide a competitive offer lets professionals know your company is serious about long-term engagement.
What does an Employer of Record do?
Employer of Record companies execute the following for their clients:
- Payroll: Setting up and managing international employees’ direct deposits, taxes, tax contributions, payment schedules, and any other payroll-related matters, alongside the accounting and bookkeeping services necessary for each.
- Benefits: Administering medical, dental, vision, and other cultural or location-specific benefits. Global EORs also manage benefits like 401(k)s and 401(k) equivalents, commute reimbursement, flex spending accounts, paid time off, paid sick leave, and more.
- HR/legal: Managing compliant hiring and onboarding practices, plus appropriate employee classifications, statuses, tax filings, registration, and more as mandated by local laws.
- Miscellaneous services: Employer of Record services can also include administering family or medical leave, short- and long-term disability, workers’ compensation, staff performance evaluations and management, and even termination negotiations.
Globalization Partners' Employer of Record Services
Globalization Partners is proud to be the global EOR of choice for small businesses to Fortune 500 companies seizing the opportunity for international expansion.
Our EOR service model works as follows:
- Adoption: Globalization Partners maintains a network of established business entities in over 185 countries around the world. We offer one of the most robust and comprehensive global EOR infrastructures in the industry. You find and vet your organization’s ideal international candidate(s). We then get to work placing that new hire onto our payroll system, setting up benefits, classifying their official employee category, and tying up any other country-compliant hiring norms.
- Onboarding: Our entities are ready to execute locally compliant employee contracts and classifications. Once done, we move on to onboarding your employee(s) within our established entity system, which typically takes between one and three weeks.
- Integration: New international employees are formally integrated onto our payroll and into our proprietary software. Payroll launches upon the finalization and receipt of a service deposit, which ensures upfront that your employees’ payments and benefits administration are on time and consistent from their first day on the job.
- Administration: We provide ongoing oversight and maintenance into front- and back-office HR, accounting, and legal needs of your international employees. You and your staff can access our software platform at any time, checking payroll schedules, employee documents, servicing information, and more. We built our platform to be transparent and user-friendly, reducing headaches and ensuring you stay empowered and in the loop regarding all pay and benefits activities.
- Ongoing support: Globalization Partners offers complete, end-to-end EOR services. Our unique ability to offer such a robust partnership is due to maintaining some of international labor law’s and business law’s top talent, including attorneys, consultants, and contractors with country-specific career expertise.
Hiring and managing employees abroad can be a challenge — one Globalization Partners exists to solve. Clients receive payroll, benefits administration, tax, data compliance, legal consultation, and a variety of other human resource functions from an industry pioneer whose leadership network has decades of experience under its belt.
The benefits of Employer of Record services
There are myriad benefits that come with working with a company that provides Employer of Record services, including:
1. Time
Using an established Employer of Record platform is the quickest way to scale your workforce globally.
Consider the traditional route — in order to find the perfect candidate to fill an essential role in a new market, your company would then need to:
- Build or buy a branch office in that country.
- Register as a subsidiary of your U.S. headquarters.
- Contract a local payroll service, local accountant, local lawyers, and local HR personnel.
- File and receive a tax ID.
- File and receive a local bank account.
- Research labor laws and collective bargaining rights.
- Implement labor laws and collective bargaining rights into your contract offerings.
- Procure a final contract for new employees.
- Onboard new employees.
- Set up a compliant payroll schedule, benefits administration, and more — all before their first day on the job.
This process will take months if you’re lucky and well over a year if you’re not. If you already have candidates in mind, those candidates could accept other offers in the amount of time it would take to establish a branch or subsidiary in their country. Simply put, an Employer of Record takes care of all this — and more — in a fraction of the time using pre-established business entities and an on-call network of local experts.
2. Cost
Without the regulatory need to set up a local subsidiary, organizations save thousands.
Yet this only scratches the surface of the cost advantages of using an Employer of Record platform. These services offer unparalleled flexibility and cost-effectiveness, particularly for smaller businesses with only a handful of employees testing out new markets.
What’s more, organizations do not need to support additional HR, finance, or legal functions internally. This saves more time and money. The Employer of Record model provides a template ready for adoption and initiation, reducing lead times and trimming implementation and upkeep costs across domains.
3. Compliance
Employer of Record service companies exist to provide a safe, compliant solution. You no longer have to handle the burden of international employment regulations, which means you don’t bear the responsibility of fines, penalties, lost licenses, and business sanctions for non-compliance. Global EORs are the answer to alleviating regulatory worries, giving you the expert support you need across international labor laws and practices.
4. Risk mitigation
As mentioned earlier, the vast majority of compliance risks fall on your Employer of Record — not your organization. They’re the one with employees’ names on the payroll, and they’re the ones who’ve drawn up, implemented, and then administered day-to-day payroll and employee benefits. Any risks associated with these functions — from misclassified workers and paid holiday negotiations to family leave policy disputes and tax audits — will be directed toward the global EOR. Luckily, these risks are few and far between with global experts like ours. Our team familiarizes themselves with the particularities of global onboarding and employee management, helping us avoid risk. With a reputable Employer of Record like ours, you’ll receive only culturally informed hiring, contract drafting, onboarding, and retention systems in addition to appropriate local benefits, incentives, and labor law-following practices.
5. Convenience
Employer of Record services lend businesses peace of mind. This is an ultimate benefit, one as priceless and beneficial to your bottom line as anything else on this list.
The full-service partnership also means organizations that use a global EOR can do what they do best — focus on core business functions and providing market-superior products and services.
Imagine what goals could be realized when you have a partner providing relief into the technical and administrative burdens of managing a global workforce. Any organization with international employees — from a few to a few hundred — knows how delicate this balancing act can be. When international expansion is the end game, and new markets are in sight, there are few better solutions than a pre-established Employer of Record service.
Additional Employer of Record benefits
International employees benefit from a company providing these services because they have the assurance that they’ll be paid on time, that their taxes are being withheld appropriately, and that their employer is operating within compliance of all local laws and standards.
Is an Employer of Record right for you?
Answer the following questions to determine if an EOR is a good fit for your company’s current position.
How many professionals do you wish to hire?
If you’re looking to hire many individuals in a single market, setting up a legal entity might be your best option, given that the effort would make sense from a benefit-cost ratio standpoint. On the other hand, if you’re looking to hire a small number of employees in different markets, setting up entities in various markets could be an expensive and risky bet. An EOR will allow you to hire professionals across the world, without the costs and logistics needed to set up an entity.
Which positions are you hiring for?
Depending on the operational needs of your business, you may be looking to hire several positions, such as salespeople or other revenue-generating positions. Some international hiring options such as Payroll Only Registration (POR) can help you make individual registration with local authorities in places like Europe with the primary goal of allowing your company to issue payroll.
However, POR will not allow you to employ revenue-generating roles or to scale beyond a small number of employees. These limitations would become an obstacle to long-term expansion plans.
Are you willing to commit fully to a new market?
Dipping your toes in new markets could result in a rather costly venture if you don’t have a perfect understanding of the local laws, regulations, and overall culture. Contractors could be beneficial for short-term projects; however, if you want to access all the potential of a full-time employee, then an EOR could allow you to reap all the benefits without the risk exposure of setting up your own entity.
Do you have a plan for creating an exceptional international employee experience?
By looking outside your home country, you access a much larger talent pool of skilled workers. Regardless of your hiring method, building an inclusive, seamless onboarding employee experience is vital to retaining top talent. If you’re only hiring one or two workers in many different countries, the time and resources investment may tax your internal team. Using an EOR with a proven history acting as an extension of your team can help support the employee experience and ensure all new team members are supported.
Do you value speed when getting started?
You’ve done your part: You have identified a great candidate somewhere in the world. But you don’t know any experts that can help you navigate local laws and provide a locally compliant contract for your candidate.
If you work with an aggregator Employer of Record company, putting together an employment contract and fully onboarding your candidate may be a lengthy and cumbersome process involving your company, your candidate, the local provider, and the aggregator EOR in the middle.
If you work with an EOR that owns the infrastructure, communication is streamlined and quick. The EOR is not a middleman slowing the process down.
What about support for your international team?
You always want to ensure your global team members have the best experience possible. That means whenever they have a question related to payroll or benefits, they’re met with a prompt, timely answer.
With an aggregator EOR, your employee may have to face multiple points of contact (the in-country provider, the consolidator EOR, and you) before getting a reply for a day-to-day issue.
With an Employer of Record company that has their own in-country experts that have the most up-to-date information for your employee, there are no inconsistencies in messaging. Your EOR is an extension of your team, and you can trust your EOR to relay accurate information, in the correct time zone, right away.
What about your company’s intellectual property?
You know that intellectual property is one of the most valued assets to any business. It flows from the employee to the company through the employment contract. It’s vital to make sure your global IP is protected.
With an aggregator EOR, employment contracts go through three parties before they get to your company: from your employees to the third party, to your EOR, then to your company. However, any legal breakdowns in these contracts put your IP at risk.
With an EOR that owns the entire infrastructure, IP flows either directly to your company, or via your EOR to your company, whichever is most enforceable by law. With Globalization Partners, you can rest assured that our employment contract templates and intellectual property assignment documents have been structured to meet world-class standards.
Frequently asked questions
Curious to learn more? Consult this guide for additional information on Globalization Partners and the Employer of Record service industry.
1. Who uses a global Employer of Record?
Organizations of all types and sizes use an outsourced Employer of Record.
For small and medium-sized businesses, an Employer of Record provides financial, legal, and HR expertise many companies at this scale simply can’t manage themselves. This frees the company to focus on core business domains and growth objectives and prevents them from spreading in-house resources too thinly.
Similarly, Fortune 500 companies favor Employers of Record for their expediency as well as their expertise. Larger organizations — and smaller ones, too — have the assurance they’re getting the best of the best, with global EORs staffed with dedicated, certified professionals who hold years of experience in their respective domains.
2. Isn’t it just easier to hire international contractors?
You always have the choice to hire international contractors. While this may initially appear a more convenient and, in some situations, cost-effective situation, it exposes you to a new set of legal regulations and compliance risks. If regulatory agencies in your contractors’ countries learn you’ve hired contractors without registering a formal legal business entity, you may be subjected to fines, business penalties, and even criminal litigation.
3. How long does it take to onboard an employee?
We average new employee onboarding process of two to three weeks within our entity network of 187 countries. With local legal experts and labor infrastructure already established, our onboarding rates are truly turnkey ready and one of the best in the business.
4. Does this mean you manage and have oversight of my employees now?
No. In fact, the whole point is that we would take care of your employees’ payroll, global benefits, taxes, and other back-office human resources issues, thus freeing you to manage the work of your employees. Your organization is still the primary employer of all international staff. Employees still report to you, perform the work you assign, contribute to your organization’s goals, and represent your business’ status globally. While on paper, your international employees, team, and department are employed by your global EOR, they work full-time, exclusively for you. Therefore, Employer of Record service companies, like Globalization Partners, are executing back-office tasks so you don’t have to.
5. Once established, how do we ensure our employees are being paid on time and receiving their benefits? How do we track their PTO and bonuses?
Through our technology. Globalization Partner’s proprietary software is designed to fully comply with U.S. Federal and state labor laws, and its dashboards are user-friendly. The platform significantly cuts down on emails (to us, from us, to your employees, etc.), and will keep everyone (you, us, your employees) in the loop.
From our user-friendly platform, you can review payroll transactions, benefits administration, employee requests, account statements, and more. You can also send and receive communications on all relevant payroll and HR activities, decluttering your inbox and consolidating these communications into one place.
Our industry-leading platform is also fully approved for use in all 185+ countries we operate entities in. Plus, it contains role-based security features so only certain team members can access certain information.
6. What if I hired someone in a country you’re not in?
Don’t worry. Even if you’ve located an ideal candidate outside of our current country network, Globalization Partners has the resources in place to connect you with a reliable set of local payroll experts, accountants, HR staff, and lawyers. We’ll act as a liaison to identify the best regional, compliant third party to secure any of your back-office HR needs, so you don’t have to.
7. Are international hires still considered “at will” if my company is headquartered in the U.S.?
No. The U.S. is the only country that legally recognizes at-will employment. At-will employment is a concept stating employees can be terminated at any time, for any given reason, and without any prior warning so long as the termination rationale isn’t illegal.
The clause works both ways, as well. At-will employment also protects an employee’s ability to quit at any time and for any reason, in most cases allowing them to do so without stating any formal reason at all.
Because at-will regulations are a U.S.-only legal concept, it can be tricky for companies to understand their full regulatory duties regarding hiring terms, contract terms, and termination clauses in other countries. Employer of Record companies understand local labor laws as well as Collective Bargaining Agreements across workers’ union, which are imperative to employ your international workers fully and compliantly.
8. How do you manage this across multiple countries around the globe?
We are experts in the local laws, regulations, culture, and customs in over 185 countries around the world. In addition, we have legal business entities in a very high percentage of those countries. So, placing your global employees on our payroll is easy. Where we don’t have an entity set up, we have long-established relationships with reliable local partners who are equipped to handle your back-office HR needs.
What our customers say about our EOR services
You want to hire in other countries and using an Employer of Record is the fastest way to do it. But pay attention: “Anyone that is trying to understand where to go, if they are looking to get into new countries, must do their homework,” says Martha Angle, Vice President of Global Human Resources at OneStream Software. “Finding a provider that can speak at your level is one thing, and [finding one] that’s going to be able to follow through on what they promise you is another.”
During the evaluation process, vendors say they will give you the stars and the moon. But after the contract is signed, does your partner follow through on what they promised?
Be aware: helping you soft-land in a new territory is only the beginning. The real work comes afterwards when you or your professionals have questions. Will they be there to help you overcome hurdles and find accurate answers?
Some EORs rely on independent, in-country partners in every territory they serve, and this can often mean longer processes and inconsistent messaging to the professional. But Globalization Partners recognizes the importance of clear, accurate communication and makes it a top priority.
According to OneStream Software, “The person I see on my side that is the owner of the account, it’s also the same person that is turning around, talking to the employee. So the messaging is consistent, the turnaround time is consistent.” Globalization Partners has a centralized account management team as well as an HR professional on the ground in each country, working hand in hand with both you and the employee as an extension of your team.
Besides consistent messaging, OneStream Software also values the dedication of their team at Globalization Partners. “Anytime you work with any vendor, there’s an expectation on delivery and following through,” says Martha Angle. “It’s amazing to me how many people can’t do that. But with Globalization Partners, I’ve gotten that consistently.”
Do your employees receive an exceptional employee experience?
As your international hiring partner, your EOR should be an extension of your team. Your employees should have a seamless experience that gives them certainty about the next stage in their career. At Globalization Partners, customer’s employees are surveyed each month and never have reported less than 96 percent employee satisfaction with their onboarding experience.
“As the HR contact, it’s not just about what you guys do for me. It’s about what you guys do for employees and how you support them as well,” says Elizabeth Palmisano, Manager, Talent Acquisition and Human Resources at ClickDimensions.
First impressions matter. And you do not want your new employees complaining about an onboarding that did not make them feel welcome or part of your team.
“We had two new team members in Australia about two weeks ago. And they both said that everyone that they talked to was super helpful. From the moment they received their contracts all the way through their onboarding, there was always someone available to them in the region, which was important.”
Ms. Palmisano trusts Globalization Partners to support building a relationship with global employees. “And I know you can’t really put a price tag on your employees’ happiness. In these types of situations where you’re not right in front of them, and you don’t have that one-on-one rapport with them, having a company that’s able to create that rapport is crucial. And you guys do that.”
Does your Employer of Record help you be more efficient and effective?
A good EOR knows they aren’t just in the business of helping you hire internationally. They take legal responsibility for ensuring compliance with local law as well as best practices, because they understand that they are your outsourced legal, tax, and HR infrastructure.
Be aware of EOR providers that act as an umbrella company or a “middle-man” between you and a third-party provider in-country. It’s easy for this type of EOR, commonly called an aggregator, to offload responsibility onto those third parties.
Maybe the third parties the aggregator chooses to work with are well-intentioned, but are they built to meet the highest standard of legal and HR compliance? Are they really following GDPR best practices? Do they understand the importance of protecting your business’ best interests, including your intellectual property through watertight employment contracts?
Globalization Partners understands what is at stake, even while many aggregator competitors do not.
When Ms. Angle realized an employee’s bank information was requested via email by OneStream Software’s alternate EOR provider, a clear violation of normal data privacy and basic cybersecurity, she was instantly concerned. “It was what finally did us in. You just don’t do that.” What’s worse, their other EOR blamed their third-party provider for the misstep – completely denying responsibility for what should have been international business 101.
It was at this point that OneStream Software elected to transfer all personnel to Globalization Partners entities, ending their engagement with the alternate EOR provider. Ms. Angle continued, “We 100 percent have confidence in how [Globalization Partners] is transmitting information. Our employees are being sent a secure portal. That protection is critical to a company like ours.”
Trudy Schapansky, Global Human Resources Director at Centric Software, agrees on how important it is to have quick and efficient communication with your EOR.
“Any HR department is very busy. If we send an email or make a call, we get an answer [from Globalization Partners] within the day. There’s no need ever to follow up. It just makes our job easier. We’re very grateful for the efficiency Globalization Partners has put in place.”
Request a Proposal
Contact Globalization Partners to learn more about partnering with a global Employer of Record service. We’re here to answer questions and outline activities so you can make an informed, empowered decision on the growth of your company — one unburdened by borders.
