Key points
- Remote work and a globalized economy has opened up opportunities for small and growing businesses to hire competitive and qualified talent all around the globe.
- Global EORs help businesses hire internationally by taking care of local regulatory compliance, liabilities, and payments in local currencies.
- Global EORs offer a range of consulting services, onboarding assistance, and other add-ons to better serve employers with different needs.
- Most Global EORs provide software services that simplify or automate international payroll, benefits administration, and employee documentation.
A Global Employer of Record (Global EOR) is a global hiring specialist — a professional partner supporting companies that seek to hire and pay employees based overseas.
Global EORs (also known as ‘International EORs’) can bring the benefits of the globalized economy, and international expansion, to new industries. In the past, free trade agreements mainly benefited large manufacturers taking advantage of cheap and often unskilled labor in other countries. This dramatically changed the global economic landscape, however, the ability to hire knowledge workers internationally has the potential to drive even greater change.
Unlike relocating a factory, hiring an international team of programmers, designers, and content producers does not require rebuilding or moving heavy infrastructure. The technology needed for remote work already exists, making it possible for workers practically anywhere to work for employers based in any other country, so long as both employer and employee are able to comply with national laws and labor regulations. This is where Global EORs come in.
In this article we will dive into what exactly a Global EOR does, how working with one can provide benefits to employers, and what potential downsides there may be to the EOR model. We will then look at some of the top Global EORs for 2023 and what makes them unique among the competition.
What is a Global EOR?
To understand the Global EOR model, we must first look at the definition of an Employer Of Record (EOR). When a company or individual hires an EOR they are hiring a company to process paychecks, administer benefits packages, deduct tax payments, onboard new employees, maintain regulatory compliance, and assume work-related liabilities. The EOR is able to provide these services because, in a legal sense (on tax documentation, for instance), the EOR is the official employer, hence the name “Employer Of Record”.
A Global EOR simply does this on an international scale, allowing companies to hire employees and contractors around the globe through the EOR service, rather than attempting to do so directly. When an EOR only operates in one country it is sometimes known as a ‘National EOR’ or ‘Local EOR’; when it operates only in one region it is known as a ‘Regional EOR’.
Since a Global EOR works in a variety of different national jurisdictions, they need to have a legal mechanism which allows them to operate in each location. For this reason, there are two main EOR models:
- The Aggregator model. On this model, the Global EOR enables hiring all over the world through its partnerships with local EORs operating in each individual country.
- The Direct EOR model, also known as the ‘wholly-owned infrastructure’ model. On this model, the Global EOR owns local legal entities in each country it operates in (subsidiaries of the Global EOR).
- The Hybrid model. In this arrangement, the Global EOR uses a mix of its own entities, and local partners, to hire all over the world.
Whichever model is being applied, Global EORs generally employ legal advisors to consult with clients on national and local labor regulations. In order to assist their clients in managing an international workforce, Global EORs usually have a powerful software platform as a part of their service. Through it, they are able to provide advice on regulatory compliance, global onboarding assistance, and monthly costs per employee in local currencies and dollars.
Employees in some countries are covered by national insurance programs, which the Global EOR will pay into on behalf of the employer. In other cases, private insurance may be needed. Global EORs offer insurance packages, usually through large international insurers, that cover all operating areas.
Global EORs often have to offer a greater and more flexible range of options than regional or national EORs. Since many small companies hire international freelancers and contractors, for instance, many Global EORs provide stripped-down services for hiring contractors only. This service is usually available at a minimal cost per contractor per month. Some providers offer their software service as a standalone, others offer insurance and administration-only packages.
What are the pros and cons of Global EOR solutions?
Why choose a Global EOR? As with most outsourcing services, there are pros and cons to going with a Global EOR solution. We consider these below.
What are the benefits of a Global EOR?
1. Time savings
International hiring can be extremely time-consuming. In many cases, local laws require that all employers have a legal entity based in the country, and this process can often take weeks or even months. By contrast, the set-up time for a Global EOR arrangement may be as little as 24 hours in some cases.
Hiring in new jurisdictions can be very time-consuming on its own; national certifications for trained workers may be different from those used at the home office, making it difficult to tell which candidates are most qualified and meet all regulations and standards. Though some positions require communication with the home office in English, others may not, and a Global EOR with local language-speaking representatives may be able to hire better-qualified and more competitive candidates.
A Global EOR will already have data on competitive salaries and other information unique to the local labor market. They can make this data immediately accessible and provide their expertise immediately, without the need for an executive to relocate to an international location and spend time learning the details of the local labor market.
These time savings allow for international expansion without taking valuable time from existing management and administration, allowing for faster market entry and project completion.
2. Financial savings
Traditionally, international expansion would incur high legal and consulting fees even before a single employee was hired, office was opened, or product was sold. When using a Global EOR, all of this work has already been done. It is their job to hire competitive international employees and contractors in compliance with local regulations.
Furthermore, many countries set high minimums for foreign investment. By using a Global EOR with established legal entities, this need is eliminated and companies can devote those resources directly towards their projects. International companies wishing to market their products in new countries or establish new manufacturing sites may still need (or prefer) to establish a wholly owned subsidiary. However, employers looking for competitive software developers or designers, for instance, will most likely be better served by a Global EOR. A Global EOR still charges fees, of course, but in most cases these will be lower than the cost of obtaining local licenses, setting up a legal entity, and hiring local accounting and administration departments.
3. Ensuring compliance with foreign labor and tax laws
International hiring opens up tremendous opportunities for sourcing highly competitive and skilled employees, however those employees will often work within regulatory environments that are very different to those that management and HR are used to working with at the home office.
Since it is the job (and legal responsibility) of a Global EOR to deal with international labor and tax laws, the client is not required to become an expert on these regulations. Generally, a Global EOR will also have extensive documentation and consultants available as well, so the international employer does not have to operate completely in the dark.
In addition, a Global EOR shoulders the legal liabilities associated with the international workforce. For international employers hiring in new jurisdictions, the risk of error leading to fines and legal fees is great, and a Global EOR can mitigate most of these risks.
4. Hiring the most talented staff
Videoconferencing, team collaboration software, and other technological solutions allow remote teams to collaborate around the globe. While the trend began years ago, the covid-19 pandemic forced remote work technology to develop by leaps and bounds in the space of months, and today those innovations and changes are here to stay.
There are highly qualified professionals around the globe looking for opportunities that are not available in their local area. Similarly, there are growing companies that have difficulty finding qualified staff in their jurisdictions. Global EORs help to bridge this gap.
Employers can now compete in a global marketplace for highly competitive staff in desirable fields such as engineering, programming, content creation, public relations, marketing, design, and more.
What are the potential downsides of a Global EOR?
With the benefits of Global EOR solutions come some potential downsides or disadvantages.
1. EOR means some business restrictions compared to a legal entity
Global EOR is a global employment solution. To carry out some other overseas business tasks (such as entering into local contracts and directly accessing some subsidies) a local subsidiary may be required.
2. Not always the most cost-effective option
In some cases, especially when hiring freelancers or contractors, it may not be necessary for an international employer to pursue an EOR solution. In many jurisdictions, freelancers can legally be paid on a per-project basis directly by a foreign company. In these situations, the payroll and HR administration services provided can be outsourced to a less costly international payroll provider. For this reason, many Global EORs provide à la carte payroll outsourcing and administration services as well as full EOR options.
Who are the leading Global EOR providers in 2023?
Horizons
Horizons is a leading international Employer of Record (EOR) — their solutions allow ambitious companies to hire and pay employees in 185+ countries. With no need to set up a local legal subsidiary, Horizons estimates that it saves companies 85 percent of the cost of international hire.
To find out all more about the Horizons global hiring platform, read our 2023 review covering key features, pros and cons, pricing, and what makes Horizons unique in the global EOR marketplace.
Remote
While most Global EORs work with contract with local partners to achieve global coverage, Remote stands out for directly owning all of its own legal entities. Remote also offers a tremendous amount of customization and integration through its software platform. The Remote API allows clients and partners to integrate Remote’s payroll, onboarding, compliance, and analytics services seamlessly into other software solutions.
Read more in our comprehensive review of Remote’s global EOR solution.
Deel
Deel makes international onboarding simple by keeping important information at hand in their attractive software interface. It provides insights on average costs per employee around the globe for various positions, to help make hiring choices easier. Additionally, employers may review standard contracts from all countries covered, directly through the dashboard. As new employees are signed up, Deel tracks which documentation has already been completed, and what outstanding information must still be supplied by the employee. The company also boasts of having over 200 legal experts available in all 150 countries of operation, and of maintaining GDPR and ISO 27001 compliant data security.
Read more about Deel in our 2023 Deel review.
Multiplier
Multiplier provides a Global EOR solution without the steep learning curve. Home office staff can quickly learn to navigate the Multiplier software and pay remote employees and freelancers with a single click, review all contracts, and approve requests for leave. It also allows for cryptocurrency payments, which is a definite bonus for some employers and staff.
Read more in our in-depth 2023 Multiplier review.
Lano
Perhaps unique among Global EOR services, Lano is used by both businesses and freelancers themselves. Freelancers and contractors with international clients can use Lano to invoice clients and keep track of payments. What’s more, these services are free for freelancers. For businesses, Lano provides onboarding services, global payroll in multiple currencies, contractor management, and a API for customizable integration. Being a relatively new company, Lano offers more flexibility than many EOR services; if an employer wishes to hire outside of their supported jurisdictions, Lano will work to set up a legal entity and offer services in the country.
Remofirst
Remofirst is a Global EOR that offers an intuitive, simple, and comprehensive workflow for managers and employers. Once the country of residence, job description, contract dates, and other relevant information is added for new employees, Remofirst will automatically generate the monthly cost per employee including salary, employer contributions, and taxes. Insurance and benefits can be added from the same window, as well as equipment such as computers, which will automatically be shipped to the employee. Once setup is complete, recurring payments can be automated. The service also provides simple support for employee visas; the local legal entity is used as a sponsor and Remofirst will submit all documentation and follow up on the application process.
Remofirst stands apart from other Global EORs in its affordable pricing (starts at $199 per month, per employee, where many or their competitors are $599 per month plus), and its dedication to customer service.
Atlas
Atlas (Atlas HXM) is another global EOR that operates through a Direct EOR model — they own entities or subsidiaries in every country that they operate. Not only that, they operate in 160+ countries. No other global EOR operates directly in as many countries.
Atlas also stands out with its HXM (that’s ‘Human Experience Management’) platform which is an end-to-end HR and payroll solution, providing employees and employers with one secure location for all employee and payroll data.
Read more about the Atlas EOR solution in our Atlas 2023 review.
Global Employer of Record — an international workforce solution
Global EORs are an effective HR and payroll solution for any company seeking to hire talent overseas. Global EOR solutions save companies money, time, and ensure that hiring and payroll is managed compliantly.
When choosing a Global EOR for your company, it is important to consider the specific offerings of that EOR, and whether it is equipped to support your kind of business.
To find our more about the best international EOR solutions check out our 2023 Top Ranking of Employer of Record companies.
FAQ
A Global EOR either sets up or contracts with legal entities around the world for the purpose of hiring employees, paying contractors, reporting taxes, and administering benefits in multiple jurisdictions. They then work with client businesses that wish to hire in those jurisdictions, eliminating the need for clients to set up their own legal entities. Global EORs usually provide their clients with software services to simplify onboarding, payroll, and HR administration as well.
A Global Professional Employer Organization (PEO) (also known as an International PEO) and a Global EOR are descriptions often applied to the same service providers. A company specifically promoting itself as a Global PEO may offer a wider range of services, such as administration outsourcing, outsourced recruitment, or multiple insurance options.
