Need to access critical skills in your business, but don’t have the time or headspace to learn where to start? Partnering with an Employer of Record (EOR) takes the stress out of global hiring.

While the initial business challenges experienced during the darkest days of the pandemic have started to wane, employers and HR professionals are still dealing with the ripple effects of years of business closures, lockdowns, sky-high absenteeism rates and critical talent/skills shortages.

Many of these challenges are unlikely to disappear in the near future. In fact, the 2022 Skills Priority List Key Finding Report, published by the National Skills Commission, showed 133 more occupations are dealing with skills shortages compared to 2021 levels. As we move into 2023, skills and talent shortages are likely to continue being a hot-button issue.

That’s why now is the perfect time to look to overseas employees as the antidote to your organisation’s talent challenges.

I know what you’re thinking: ‘That sounds great, but I’ve barely got time to get through my BAU tasks let alone spend hours trying to navigate the complexities of local labour laws in a foreign country.’ I hear you.

That’s where an employer of record (EOR) comes in.

What is an employer of record?

Put simply, an EOR is an entity that functions as the legal employer for businesses that want to set up shop in a different country. 

So if you’re an Australian headquartered business and you engage an employee in France to run the administrative side of your business, instead of worrying about things like France’s minimum wage or paid leave obligations (it’s EUR 1,602.12 per month and 25 days per year, in case you were wondering), you’d leave that stuff for an EOR to take care of.

Think of an EOR like the middleman – it looks after everything from employment contracts and payroll, to benefits and local taxes. And, perhaps most importantly, an EOR keeps you out of legal hot water by ensuring you’re operating compliantly and within the bounds of a country’s specific employment laws.

As an employer, you still maintain responsibility for managing the employee’s workload, schedule and performance expectations, while an EOR works in the background on the operational side of things. The new hire is essentially a normal employee of your organisation, but you shoulder far less risk as a business.

Snapshot of EOR services:

• Manages legal employment of your global and remote workers
• Creates locally compliant employment contracts
• Conducts background checks
• Processes international payroll
• Collects tax documentation and files it in accordance with local tax laws
• Provides employee benefits and perks
• Protects intellectual property and employee data
• Facilitates employee onboarding processes
• Terminates contracts.

The benefits of embracing borderless teams

So that’s the ‘what’ of EORs, now let’s dive into the ‘why’.

Organisations big and small partner with an EOR when they’re too busy to manage the bureaucratic headaches and complexities that often come with global hiring. In today’s fast-paced environment, this is a reality most HR professionals and leaders can resonate with.

You are busy helping to drive your business forward and partnering with the C-Suite to take your business to new heights. You don’t have time to get in the weeds of operational work. 

An EOR is a safe pair of hands that gives you breathing space to think more strategically, which, according to research from Asana, we’ve spent 36 per cent less time doing in 2022 compared to previous years. In order to grow a business, HR leaders need headspace to think in a no-limits fashion. That means cutting out as many bureaucratic tasks as possible and ensuring they have the right people on board, doing the right work.

As an agile platform, an EOR allows you to move with the ebb and flow of talent trends, such as responding to short-term needs by engaging contractors, or thinking more big-picture by setting your business up with permanent, full-time employees. Talent support can be dialed up or down, depending on your business needs.

But an EOR isn’t just there for filling gaps – it’s also your gateway to business expansion into new and exciting markets. 

Say you want to test your product or service in a new market without committing to opening an official presence in that country. An EOR is a great way to get local feet on the ground to trial your offering in a new market. Who knows what opportunities could arise from this?

If global expansion isn’t your main goal at the moment, an EOR also acts as a powerful retention tool to help you stand out as an employer of choice in a tight labour market.

Say you’ve got a valued international employee who has been working in your local HQ for a few years now, but their visa is about to expire. Or perhaps they’re homesick and want to return to their home country. Instead of cutting ties with them, you could continue the working relationship by re-hiring them through an EOR.

Snapshot of other EOR benefits:

When selecting an effective EOR, you can:

• Rest assured that data security is taken care of
• Gain access to 24-hour customer support (in your timezone) to assist with any pressing queries
• Integrate other platforms you rely on, such as your HR or accounting software
• Experience high data security standards and protocols to protect your data, no matter where you hire
• Access in-house legal and payroll support to help you work through any prickly challenges that emerge.

Freeing HR to work on tasks that matter most

Gone are the days of HR professionals getting bogged down in menial, repetitive back-office tasks. The pandemic has proven that HR professionals are invaluable assets to the C-suite, especially during uncertain times. You need to focus on being strategic business partners and steering your organisation forward with a people-centric future-of-work strategy.

That’s why an EOR is a win-win for HR departments and businesses more broadly: you get to solve your talent/skills shortages while still being freed up to work on expanding and enhancing your organisation’s people strategy.

The future of work is all about people – getting the right talent and then creating unique and engaging employee experiences to ensure your business thrives. So don’t limit your business to the people on your shores – think bigger; think global.

Shannon Karaka is the Country Leader, AUNZ of Deel, a global payroll and compliance provider and an employer of record.