close
close

7 Common Myths About Registered Employers Explained

Posted on by darion

Employer of Record is a valuable service that can benefit companies looking to hire international workers or avoid the complications of complex international hiring. The myths surrounding EOR can cause companies to avoid engaging in EOR when in reality it can be helpful to their business and help them with any compliance issues they may face. Below are 7 important misconceptions about Registering Employer service we’ll cover in this post to explain what EOR can and can’t do for your business.

Myth 1: A registering employer takes away your control over your employees

The most common myth is that EOR takes away your control over your employees and your organizational culture, or lack thereof. That’s not true.

Reality: The EOR is also responsible for HR administration, such as payments, taxation, and compliance with local labor laws. However, your company is solely responsible for managing your employees, including their positions, responsibilities, performance, and integration into your company’s organizational environment.

Myth 2: Employer registration is only useful for large companies

Small and medium-sized businesses assume that EOR services were created with larger organizations with a broad international reach in mind.

Reality: EOR services can be useful in a variety of situations. You may be a small company looking to hire your first employee abroad or multiple companies that need to set up operations in different countries. For small and medium-sized businesses, EOR can streamline the way you enter new markets, handle complex payment operations and comply with foreign legislation.

Myth 3: Employer registrar services are too expensive

Some companies cannot use EOR services because they believe that such a solution involves very high costs that are not worth incurring.

Reality: EOR services are significantly cheaper than opening a business in a new country, hiring professionals to work locally, or incurring non-compliance penalties. Furthermore, if you can afford the time it takes to process payroll, prepare legal documents, and recruit employees, EOR is more valuable in these areas.

Myth 4: Using EOR means more legal and compliance risk

Some companies believe that using EOR exposes them to legal and compliance risks, particularly in the context of overseas labor laws and regulations.

Reality: In fact, it’s the opposite. One of the main benefits of EOR is that it helps you reduce your legal risk by ensuring that your business complies with local labor laws in the countries where you employ. EOR has a deep understanding of labor laws, tax laws, and benefits requirements, ensuring that your business is fully compliant.

Myth 5: EOR is the same as an employment agency

There is a misconception that EOR is just another name for an employment agency.

Reality: While EOR and staffing agencies help companies find and manage employees, they operate differently. An employment agency typically recruits and supplies temporary workers or contractors to your business. On the other hand, an EOR acts as the legal employer for your current employees. An EOR handles employment contracts, payroll, taxes, and compliance, but the employees still report directly to you and perform tasks for your business.

Why is it important to understand the truth about EOR services?

Here’s a quick summary of why understanding the truth about EOR services matters:

  • Maintain control over your employees: You continue to manage your team’s work, while EOR takes care of administrative tasks.
  • Economical solution: EORs are often more cost-effective than establishing a legal entity abroad or managing complex compliance procedures in-house.
  • Improved compatibility: EORs reduce legal risk by ensuring compliance with local labor and tax laws, and employment standards.
  • Faster recruitment process: EORs streamline the hiring and onboarding process, helping employees get up and running quickly.

Application

The confusion about EOR services stems from the need to know about the EOR function and how such a company can help businesses of all sizes. If you are thinking about new opportunities to hire employees abroad or need to optimize your HR department, working with an experienced company such as Solvecube can be the right decision for your company. Start using their platform and mark a revolution in your talent acquisition process.

Read more from Techbullion