Mastering Global Expansion Roadmap with Global Employer of Record
March 2023 Edition of Acumen International Global Employment Tax and Compliance Newsletter! Let's dive in!
The Global Employer of Record is a cost-effective and risk-free talent engagement model in the world of human resources and payroll management. But what does it mean, why is it important, and what are the benefits? We'll look at all these questions in this week's newsletter.
A Global Employer of Record is an entity that acts as a legal employer for all local and international employees worldwide — even if they work remotely and/or in multiple countries. The company provides a single point of contact and responsibility for all payroll, benefits, tax administration, and HR functions across multiple jurisdictions.
Using a Global Employer of Record
Global Employer of Record (EOR) solutions provide a quick, simple, and cost-effective way to tap into global talent pools for companies hiring talent outside their target country.
These businesses have an existing local legal entity in your target countries. This simplifies the global expansion process immensely, as your organisation can rely on the Global EOR provider's employment expertise and infrastructure.
It allows them to streamline onboarding and manage payrolls, tax, and benefits for their clients' employees. The global EOR is not responsible for overseeing job duties or employee performance; these tasks are left to international employers.
Normally the Global Employer of Record arrangement is only needed for limited periods, generally no more than two years. However, some countries may see it used for extended time frames depending on individual circumstances.
Utilizing a Global EOR solution can be a great HR-team augmentation solution for organizations expanding into new countries – especially those risky or underserved ones.
By employing local and foreign talent through the Global EOR's legal entity, the organization is unburdened from managing payroll and benefits and navigating the maze of labor and tax law compliance. All of those responsibilities land on the global EOR provider, which would list itself as the legal employer, handling all compensation, benefits, or immigration matters that come along with it. Such services can not merely provide invaluable knowledge regarding worldwide hiring practices and guidance when making decisions around employee compensation structure.
Global Employer of Record: All Services Under One Roof in 190 Countries
In today's business world, a company can't reach its full potential if it doesn't expand into international markets. The biggest challenge is ensuring you have a local employer of record partner in each country you do business in. It's hard because there are so many things to consider—different tax laws, varying degrees of government involvement in payroll and tax administration, and more—and they can vary from country to country.
You need a partner who knows their way around all those quirks, which can be tricky to find. Even if you find someone, it's still a lot of work to handle the nuances of multiple countries and ensure that each of your in-country employees is treated fairly and compliantly.
What's more challenging than finding the right partner? Managing all those relationships with multiple partners across different HR functions, operating in different time zones, and having varying levels of expertise with organizational challenges.
When you think you've got it all figured out, there's some other complication that throws everything off-kilter, like a new tax law or labour regulation, or currency exchange rate.
Why Use Global Employer of Record Services?
It's a new cost-effective, compliant way of managing payroll, benefits administration, legal matters, and so much more—all from one place. You'll have access to the entire suite of services that your company needs to stay compliant with a single contract and payment structure. Best of all? It's all wrapped up in one neat package. That means no more paying for multiple vendors for each service you need. Just one monthly fee, and you're done!
As a result, companies with global operations can reduce their costs by eliminating multiple vendors, streamlining their reporting and compliance processes, reducing risk exposure by centralizing their HR functions into one entity that understands local regulations better than any other company could, and increasing efficiency by hiring staff who understand how to hire across borders. Acumen International can replace at least 10 local vendors as follows.
Global Expansion Risk Control
Your business expanding into new countries and continents can put you at higher risk for costly mistakes and problems.
Let's face it. Your company could be in trouble when it comes to taxes and adherence to ever-changing compliance requirements. With so many regulations, some are bound to trip you up. And who has the time to stay on top of it all? It's easy to fall into an under-taxation trap or get caught misclassifying employees as independent contractors (which can result in huge fines in many countries), and you might not even know there's a problem until it's too late.
A Global Employer of Record (EOR) helps with compliance issues that could arise from entering new markets. By working with Global EOR, you can ensure your company follows each jurisdiction's in-country rules and regulations, helping avoid the following risks.
Global Employer of Record Support upon Business Transitioning
As a company, how you will succeed in the global economy is a direct result of your ability to attract and retain top talent. Global expansion via mergers, acquisitions, new ventures, and joint ventures has become the preferred growth strategy for many organizations, but business success does not always translate into business continuity.
While you may be planning for your business to grow and expand into new markets, it doesn't always happen according to plan. Sometimes the business changes in a way that makes it necessary to close locations or sell off assets, while other times it makes sense to acquire another company. In all of these cases, you'll have to transfer your employees between companies—a complicated and sometimes intimidating process that can take many months and cause significant challenges for both the employees affected and the business as a whole.
As with most change initiatives, the Global Employer of Record partner's expertise and engagement are key factors in the success of any business transition. Acumen Global EOR's employee transition management services support the entire process and help minimize these potential risks in 190 countries.
Our comprehensive business transitioning solutions include:
Our clients include Fortune 500 companies and small and medium-sized businesses across all industries, including IT, finance, technology-enabled services, manufacturing, retail, distribution, and logistics. The service offerings are designed to help organizations navigate through these transitions without disrupting business operations or negatively impacting employees.
Why Wait? Get Express Quote Today!
Global Employer of Record (EOR) is a flexible, scalable, and adaptable talent engagement model that can support you throughout your global expansion journey. It doesn't matter if you're starting from scratch or are looking to expand your business in an already established market. Our Global EOR services can help you at any stage of your international growth.
You'll find that Acumen International's approach is uniquely suited to meet the needs of companies entering new markets and those seeking to enter new customer channels, as well as for companies experiencing rapid growth or needing workforce flexibility.