It’s easy to confuse an employee of record (EOR) service with a staffing agency. These types of businesses are often lumped together. Too, some EORs also provide staffing solutions—and vise versa. But these really are two distinct types of business lines. Let’s look at the differences between a staffing firm and EOR.
What’s a Staffing Agency?
Head hunters. Recruiting firm. Contract search company. There are many names for staffing agencies who basically do one thing—find your talent. A staffing agency is usually made up of professional recruiters who look for employees to fill open job positions. Most staffing firms specialize in a few industries, such as healthcare, IT, or manufacturing. They can offer all kinds of employee work arrangements, providing their clients with temporary to permanent workers. Speaking of clients, businesses contract with a staffing agency to do the hard work of finding, vetting, and bringing on new hires. These business clients pay fees to the staffing agency for successfully finding them the right fit.
What’s an EOR?
Now compare that to an EOR, who serves as the employer of the talent, just as the name implies. An EOR is a legal term for tax purposes that shows the firm is handling personnel functions such as payroll processing and withholdings, tax deposits, tax filing, payments for insurance or other benefits, and more related to the employment contract. An EOR can handle all HR, from onboarding and background checks to managing benefits, employee termination, or any other worker issues such as workers’ compensation.
What are the Benefits of These Companies?
The benefits of a staffing agency and an EOR are that they both handle many of the tasks and risks associated with the hiring and employment process. This is particularly beneficial to smaller client companies because payroll and hiring laws are some of the most heavily regulated and closely monitored of any rules related to being an employer. This is especially true for an EOR due to the complexity of local, state, and federal labor and tax laws. Not only does the employer have to worry about the federal regulatory climate, but if you do business out of state or across geographic boundaries, it’s incredibly complex and ever-changing by state and by local municipalities. It’s easy to inadvertently mess things up, but an EOR can help even the smallest company expand its footprint with new employees safely and effectively.
Interestingly, it’s common for staffing agencies to leverage the services of an EOR. This is especially true if the staffing agency is making a contract to hire, where they are employing the worker and contracting them out to the client company. EORs are great for handling any back-office duties that other companies simply feel they aren’t equipped to handle.
You Need a Partner You Can Trust
FoxHire is an EOR that has a long track record of working with clients to help them stay legal while meeting their hiring goals. With our firm, bringing new talent into your company no longer is a hassle or a worry. We handle everything from onboarding to payroll to termination, so you don’t have to. If you’re thinking about expanding across state lines, don’t worry, we can help with that, too. Talk with our team about how we can help your business.