Why Would My Organization Need an EOR?

These days companies are trying to do more with less cost and greater efficiency. One way to accomplish these goals is through outsourcing to an employee of record (EOR). Outsourcing allows a qualified external expert to handle essential organizational functions more efficiently than handling the job in-house. Outsourcing your HR-related activities to an EOR makes sense; this job function is complex, time-consuming, and high risk. Here are some of the most common signs that your business would benefit from outsourcing to an EOR. 

Signs you May Need an EOR 

An EOR is a third-party that serves as the legal hiring entity for your workforce. An EOR handles hiring, payroll compensation, benefits, taxes—and everything else associated with the hiring functions. Because this is all they do, the efficiencies of the HR function are multiplied, and risks are lessened. You can use your EOR to handle a contractor workforce or other non-regular labor pool. You can also outsource part or all of your HR function to free you your internal teams to focus on other initiatives. 

EORs are a great fit for companies that have a fluctuating pool of contract workers, project-based teams, or employees that are spread across state lines. Labor, payroll, and tax laws are increasingly complicated. This is a big challenge to HR teams tasked with handling so many things: training and education, workers’ compensation, annual reviews, benefits, and more. Now imagine the struggle for a small business with seasonal contract workers and not enough HR help. 

EORs can typically handle: 

  • Providing a registered state entity for running a compliant, legal payroll, and hiring process 
  • Meeting all regional and state labor laws to ensure you’re not penalized for running afoul of taxes, overtime rules, worker’s compensation, or anything else for that matter
  • Advising you of any changes to laws pertaining to termination rules, taxes, or other regulatory issues affecting the employer/employee relationship. 
  • Arranging work permits and visas, if needed. 

An EOR can also be particularly helpful if you have expansion plans into other states. You can use the EOR to register your business in other states, and they can handle all the legalities of hiring. EORs hire and pay the employee on your behalf while taking in all the responsibility associated with this process. If you’re expanding but don’t have a legal local entity in place, use an EOR to overcome this hurdle and eliminate the risk that you might inadvertently violate employment laws in the region or state. 

While an EOR is the registered employer, they do not have any management or supervisory roles in your company. You make the hiring decisions, compensation, job descriptions, projects, and of course, termination. Also, depending on the EOR, they can help if you plan to pursue business overseas. 

Work With an Expert!

As the leading EOR in the United States, FoxHire works closely with businesses just like yours to cut costs and improve overall efficiencies. Talk to our team about how we can help.