Employer of Record: Frequently Asked Questions
This article is written and produced by Auxilium, one of the GCC’s leading Employer of Record and outsource staffing solutions providers.
Partnering with a professional Employer of Record (EOR) is an increasingly popular strategy for organizations who are looking to expand globally or to employ remote international workforces. An EOR acts as the legal employer of a company’s workforce and takes on all essential employer-related and HR management functions, allowing the company to hire and engage employees in new countries without having to set up local entities.
However, as a relatively new business model, organizations can be unclear on what exactly partnering with an EOR involves, and there are often grey areas surrounding costs and other factors. So, here we address some of the most frequently asked questions about EOR solutions.
Is it really cheaper to use an EOR than to set up a company?
This is one of the most often asked questions, and in most cases, the EOR route will be the most cost-effective, as well as being the easiest, quickest and safest route. Importantly, companies pay an EOR partner a consolidated monthly fee, dependent only on the number of employees, which helps them to tightly control and accurately forecast costs, which is particularly important in the early stages.
Will I be hit with extra fees and hidden costs?
Your professional EOR partner will sit down with you and explain in detail all the costs and fees associated with their services. In most cases this will include a one-time initial set up fee, with an agreed fixed monthly fee thereafter, based on the number of employees and the total payroll amount. Your services agreement and contract will set out the schedule of fees, and will include details on any potential variations caused by factors such as regulatory or legislative changes.
Is there a minimum size of business that EORs will work with?
No. Most EORS will work with companies with as few as five employees, and EOR solutions are particularly well-suited to SMEs and business start-ups.
Can I use an EOR for short-term employment solutions?
Yes. EORs are not only ideal for organizations needing fulltime permanent staff, they are also a good option for companies deploying employees on short or fixed-term contracts, or for one-off projects.
Will I retain management control over my employees?
Yes. Your EOR will be responsible for the HR and administrative management of your employees and they will ensure that all employee-related processes are carried out compliantly. However, you will be managing your business and workforce, strategically and operationally, just as you would with a traditional company.
EOR works for me, but what about the employees?
Staff employed under an EOR agreement enjoy the full protection and security of being legally and compliantly employed workers in the country of employment, as well as being entitled to all statutory employee benefits. Your EOR partner will also understand the importance of employee engagement and will work with you to ensure that your teams are properly inducted into the business and that they have support and guidance throughout their employment.
Talk to Auxilium
If you are considering expanding your business globally, or if you are looking to recruit international talent, then you should talk to Auxilium, one of the leading EOR and outsource staffing solutions providers in the GCC Region. We help organizations to expand and recruit staff in the UAE, Qatar, Bahrain, Saudi Arabia, Kuwait and Oman.
For more information on employer of record and outsource staffing services, please contact the Auxilium Employer of Record Team.
