How to Choose the Employer of Record for Your Business [Step-by-step Guide]

How to Choose the Employer of Record for Your Business [Step-by-step Guide]

Choosing the right Employer of Record requires precision to ensure compliance, streamline payroll, and optimise employee management across global markets.

This guide on finding an employer of record covers every step—from defining your expansion goals to evaluating EOR providers—helping you simplify the hiring process and reduce legal and administrative risks.

Let’s get started!

What is an employer of record (EOR)?

An Employer of Record (EOR) is a third-party service provider that legally employs workers on behalf of another company.

While you retain control over your employees' daily activities, the EOR takes on all legal responsibilities, such as ensuring compliance with local labour laws, managing payroll, processing taxes, and providing employee benefits.

In essence, the EOR becomes the official employer, handling all of the legal and administrative tasks related to employment.

Which businesses benefit from an EOR?

An EOR can benefit a wide variety of businesses, especially those expanding into new markets or hiring remote teams.

Whether you're a startup or a large corporation, using an EOR simplifies the hiring process and ensures compliance with local regulations without the need for setting up a local entity.

Here are some types of businesses that can particularly benefit from using an EOR:

1️⃣ Startups: Small businesses entering new international markets quickly without the need to establish a local presence.

2️⃣ Remote-first companies: Businesses looking to hire remote employees from different regions without dealing with country-specific laws and payroll.

3️⃣ Large corporations: Companies expanding into new markets where they don’t yet have a legal entity, enabling fast hiring and scaling.

4️⃣ SaaS businesses: Tech companies seeking to build global teams while focusing on product development rather than administrative tasks.

5️⃣ Consulting firms: Businesses providing services globally that need to hire local talent to manage clients and operations in various regions.

Key benefits of using an EOR for your business

The benefits of using an EOR extend beyond simply managing compliance.

Here are some key advantages that can help streamline your business’s expansion:

1️⃣ Simplified compliance: When you expand into new markets, local labour laws can be complex and hard to navigate. An EOR ensures that you stay compliant with all local regulations, from taxes and benefits to employment contracts and labour rights.

2️⃣ Global payroll management: The EOR will manage payroll for your international employees, ensuring that they are paid accurately and on time. The EOR takes care of the tax deductions, contributions, and everything related to employee compensation, ensuring compliance in each market.

3️⃣ Faster market entry: Expanding into new countries usually involves a lengthy process of setting up a legal entity, registering with local authorities, and understanding complex legal requirements. By using an EOR, you can bypass this process and start hiring employees almost immediately.

4️⃣ Risk reduction: One of the biggest risks of hiring employees abroad is the potential for non-compliance with local laws. An EOR provider assumes this risk, helping you avoid penalties, fines, and legal disputes.

5️⃣ Cost savings: Setting up a legal entity in each country can be expensive, not to mention the costs associated with hiring local experts to handle compliance and payroll. An EOR helps you save on these upfront costs, providing a more cost-effective way to expand internationally.

6️⃣ Employee benefits: The EOR ensures that your employees have access to competitive benefits packages that meet local standards, including health insurance, retirement plans, and other perks. This can help attract and retain top talent.

What to consider when choosing an EOR provider

When selecting an EOR, there are several factors to consider to ensure you’re making the right choice for your business. Here’s a list of key considerations to keep in mind:

• Experience and expertise: Look for an EOR with a proven track record in the countries where you plan to expand. The more experience they have in managing employment in those regions, the better equipped they will be to handle the complexities of local labour laws.
• Technology and platform usability: A user-friendly platform can save you time and hassle. Check if the EOR provides an intuitive and easy-to-navigate platform that offers transparent reporting and easy access to payroll, employee benefits, and other key information.
• Compliance guarantees: Make sure that the EOR offers guarantees regarding compliance with local laws and regulations. This can give you peace of mind knowing that they’ll take on the legal responsibility for your employees.
• Employee experience: The EOR should provide your employees with a positive experience, from clear communication to timely payroll and quality benefits.
• Customer service and support: When managing a global workforce, having access to reliable customer support is critical. Ensure the EOR provider offers excellent customer service and has a dedicated team to address any issues or questions that may arise.

A step-by-step guide to making your EOR decision

Choosing the right EOR provider for your business is a significant decision, and it requires careful consideration.

Here’s a step-by-step guide to help you make an informed choice:

1️⃣ Define your expansion goals

Before diving into the search for an EOR provider, the first step is to clearly define your goals.

Are you hiring a small remote team, or are you looking to open offices in multiple countries? Understanding your goals will help you narrow down your options and identify the features you need from an EOR.

Pro tip

Native Teams’ EOR services allow businesses to easily enter new global markets without needing to establish a local legal entity.

Whether you’re hiring in one country or expanding across several, Native Teams can help streamline your hiring process.

2️⃣ Assess the countries or regions you’re expanding to

When expanding into new markets, it’s essential to understand the local employment laws and tax regulations.

Some EOR providers specialise in specific countries or regions, while others may have a global presence. 

Make sure your EOR provider has expertise in the regions where you intend to hire.

📌 Why this matters: Understanding local laws is crucial for compliance.

A provider with experience in the regions you’re targeting can guide you through the complexities of local regulations, taxes, and benefits.

Pro tip

Native Teams offers EOR services in 85+ countries, ensuring your business can expand globally while staying compliant with local employment laws.

Our expertise across various regions allows for smooth onboarding and legal compliance, no matter where your team is based.

3️⃣ Plan your budget

Next, you’ll need to establish a budget for EOR services.

Costs can vary depending on the number of employees, the countries involved, and the complexity of the services required.

Understanding your financial limits will help you filter out EOR providers that don’t meet your needs.

4️⃣ Evaluate the EOR’s experience and reputation

Look for an EOR provider with a proven track record, particularly in the regions where you want to hire.

Read reviews, ask for references, and check their reputation in the market.

An experienced provider will have a deep understanding of local laws and be able to navigate any legal complexities that arise.

5️⃣ Review their technological platform

In today’s digital age, having a user-friendly platform is essential.

Make sure the EOR provider’s platform allows for easy tracking of employee data, payroll management, and benefits administration.

📌 Why this matters: The right technology ensures smooth payroll processing, compliance tracking, and access to important employment documents.

Pro tip

Native Teams can provide you with an intuitive platform for global payroll management, where you can process payments, track employee details, and ensure compliance—all from one system.

Our platform simplifies the process, allowing you to manage international payroll efficiently.

6️⃣ Check for compliance guarantees

Compliance with local laws is one of the primary reasons businesses turn to an EOR.

Ensure the provider offers solid guarantees about their ability to manage employee taxes, benefits, and other legal obligations in each region.

📌 Why this matters: Non-compliance with local regulations can lead to costly fines or legal issues.

By partnering with an EOR that guarantees compliance, you can mitigate these risks and ensure your business remains on the right side of the law.

7️⃣ Understand their employee experience approach

It’s important to ensure that the EOR provider offers a positive experience for your employees.

This includes timely and accurate payroll processing, benefits that meet local standards, and clear communication regarding employment status and contracts.

📌 Why this matters: A great employee experience leads to better retention and productivity.

Choose an EOR provider that treats your employees with respect and ensures they have access to the benefits and services they deserve.

8️⃣ Assess the provider’s flexibility and scalability

As your business grows, your needs may change.

Choose an EOR provider that offers the flexibility to scale up as you hire more employees or expand into new regions.

The provider should be able to adapt to your changing requirements and offer the services you need, whether you're hiring one employee or dozens.

📌 Why this matters: As your business expands, you’ll want an EOR provider that can grow with you, offering scalable solutions to meet your changing needs.

9️⃣ Request demos and consultations

Before you commit to an EOR provider, it’s a good idea to request a demo or consultation.

This will allow you to see how their platform works, ask questions about their services, and get a feel for their customer support.

Pro tip

Native Teams offers demos and consultations to help you understand how our platform works and how their EOR services can benefit your business.

You can see how easy it is to manage global payroll and compliance directly through their system.

Native Teams: The perfect employer of record for your business

Native Teams is an all-in-one global platform that simplifies the complexities of international hiring and remote work.

With services available in over 85 countries, Native Teams offers comprehensive solutions that cover everything from payroll and legal employment to tax optimisation and wealth management, empowering businesses to scale effortlessly across borders.

Here’s how Native Teams can support your global workforce:

1️⃣ Employer of Record (EOR): Legally manage your global workforce without the need for a local entity, ensuring compliance with payroll, taxes, and benefits across 85+ countries.

2️⃣ PEO Services: Simplify HR tasks by outsourcing payroll, taxes, benefits, and compliance management in locations where you already have a legal presence.

3️⃣ Global HR Support: Access expert HR support for employee relations, onboarding, and best practices, ensuring smooth and compliant workforce management globally.

4️⃣ Legal Entity Setup & Tax Reporting: Establish a legal entity in target countries and streamline tax reporting with expert support to ensure compliance with local regulations.

5️⃣ Employee Benefits & Compliance: Offer competitive benefits packages, including healthcare, pensions, and wellness programs, while ensuring compliance with local laws and regulations.

6️⃣Legal Entity Setup: Establish legal entities in multiple countries, ensuring compliance with local regulations.

Ready to streamline your global operations and take your business to the next level?

Start with Native Teams today, or book a demo!