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Your business has been incredible at home, and you wish you had the resources to expand worldwide. But you lack the resources and time to do so and instead decide to opt for employer of record services in India. This is a great idea because your business will also benefit from the cost-effectiveness and the lesser turnaround time and employer of record promises.
What Is an Employer of Record (EOR)?
An entity that legally employs people on their payroll on behalf of another organization is called an employer of record (EOR). An employer of record may have a presence in many countries worldwide, in which case they would become a Global Employer of Record (GEO). The Employer of record services too would be on a global scale.
What Is Employer of Record Services?
Employer of record services is the set of services provided by a third party as it legally employs people in another country on behalf of a business. The employer of record service provided by a company generally consists of all or a few of the following – end-to-end recruitment, contract staffing, management of the entire payroll cycle, and statutory compliance management.
What Are the Benefits of Using an Employer of Record?
The benefits of using an employer of record are:
1. Availability of Great Talent
Capable of recruiting experts from another country to get the work done
2. No Need for a Permanent Office in Another Location
No need to set up an office in the location where the employee is working from
3. A Remote Setup that Welcomes Better Talent
Capable of setting up remote workers all around the globe and benefitting from it
4. No Worry About Legal Compliance
Assurance of legal compliance without working too hard to get things done
5. Big Cost Savings
Cost savings from not needing to establish an office in the country of the employee
6. Lesser Time to Hire
Turnaround time in hiring is reduced as the EOR is more familiar with the market
How Does Hiring Through an Employer of Record Work?
Hiring through an employer of record consists of the following steps.
1. Internal Needs Assessment
Assess your internal needs – think about how many people you want to hire, what roles you need fulfilment for, and how long the process can take.
2. Select the Country of Recruitment
Select the country where you want to hire from. Consider things like the standard of living, what benefits you can provide, whether the country supports EOR, and how long you would want the employee to stay.
3. Conduct a Thorough Review both Within Your Network and on the Internet
Review the top EOR providers in the country of employment. Also, consider if you need a global employer of record to plan for the future.
4. Sign a Contract with the EOR
Once you know which EOR to proceed with, talk to them and sign the contract. Ask them if they are okay with recruiting the candidates too. If the EOR says no, then provide the candidates for onboarding.
5. EOR Takes Over as Employer
The EOR then takes care of the onboarding and further formalities. They will manage payroll and compliance too on your behalf and you would just need to work on building a relationship with the people working for you.
Why Should Your Organization Consider an Employer of Record?
An organization must consider an employer of record when it is trying to recruit candidates from another geography and wants to reduce the time and stress that is required to accomplish this. An employer of record also has experience of managing employees in the selected geography, which becomes a great benefit for the business concerned.
Apart from all these benefits, perhaps the greatest reason why is that it becomes an all-in-one solution for all your HR needs post onboarding, such as payroll and compliance. Employer of record services may also take care of recruitment and staffing needs too.
Employer of Record vs. PEO vs. AOR: What’s the difference?
An employer of record serves as the direct employer for a business in a particular geography and there is no need for the business to set up a branch in the given country. The EOR also takes care of payroll and compliance for the recruit, in keeping with its role as an employer. A GEO is an employer of record with a global reach and presence.
On the other hand, the Professional Employer Organization (PEO) requires that the business has a branch in the country of employment. The PEO shares the co-employer status with the business and helps the business manage the tasks associated with HR.
When it comes to Agent of Record (AOR), the parties involved are independent contractors and not employees. An AOR helps you manage the independent contractors on your behalf, paying them on time and managing compliance effectively. They take over the ownership of the independent contractors on your behalf.
How to Choose the Right Employer of Record Solution for Your Company?
To choose the right employer of record service for your company, read the reviews of EORs in the country you want to hire from, look at which of them closely meets your requirements, and then shortlist the EORs that fall within your budget. Also, consider the support options they offer and what the terms of the contract are before you finally sign off.
Are you looking for an employer of record services for your company? Alp Consulting, an HR consulting company with more than 25 years of experience, can help you manage not just payroll and compliance by acting as an EOR, but handle recruitment too. Talk to us today!
Frequently Asked Questions (FAQs)
1. How much does an EOR typically cost?
The cost of working with an EOR depends on the services that you opt for in addition to letting them manage the employer status. Generally, an EOR handles only payroll and compliance but Alp Consulting handles recruitment too.
2. What is an employer of record?
An entity that legally employs people on their payroll on behalf of another organization is called an employer of record. An employer of record may have a presence in many countries worldwide, in which case they would become a global employer of record.
3. What is an employer of record for India?
An employer of record for India is a third party located in India that acts as an employer on behalf of another business. Alp Consulting is an employer of record located in India, and hence an EOR or employer of record for India.
4. Is EOR legal in India?
EOR is legal in India. The Indian government allows third parties to engage with people in India hiring them on their payroll on behalf of other international companies. However, the EOR must be a registered entity in India operating with a valid employment license.
5. Why should businesses consider using an EOR in India?
Businesses should consider using an EOR in India as India is a great source of very high-quality talent with diverse skills. Using an EOR in India also turns out to be a very cost-effective solution for many businesses.
6. What is an example of an employer of record?
Alp Consulting is a great example of an employer of record. In its more than 25 years of HR consulting, Alp Consulting has worked with several top Fortune 500 companies, acting as an EOR on several instances.
Contact Us For Business Enquiry
Rajkumar Shanmugam
Rajkumar Shanmugam is the Head of HR at ALP Consulting, bringing over 19 years of comprehensive HR leadership experience across India and international markets. His expertise spans talent acquisition, employee relations, performance management, compliance, and HR transformation. Rajkumar has a proven track record of driving people-centric initiatives, enhancing workplace culture, and aligning HR strategy with business goals. With extensive experience in US staffing operations and global mobility, he continues to lead organizational excellence through innovation and employee engagement.
