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Working with an employer of record (EoR) simplifies the process of hiring employees in new regions by bypassing the need to establish a local legal entity. It also frees businesses from HR obligations like running payroll and administering benefits, which are usually handled by the EoR.
But, with many different EoR providers available, choosing the right one requires careful consideration. If you’re looking to expand your operations within the EMEA region by using an EoR, it’s crucial to do your homework before committing to a provider. Read on for 30+ questions you can ask to help choose an employer of record.
The importance of choosing the right employer of record
Hiring internationally comes with a number of different risks and challenges. First, you need to ensure each worker you engage is classified correctly according to the rules in the country they’re working from. You need to ensure all of your employment contracts are compliant with local legislation, and that you follow the rules governing things like working hours, time off, overtime and termination.
Of course, working with an EoR can help you solve a lot of these problems. However, it’s important to remember that all EoRs are not created equal. If you’re considering working with a provider, you need to be sure that they’ll be able to meet their obligations in each country you want to hire in, or your business could be exposed to legal risks.
You should also think about the potential impact of a substandard EoR on your workers. After all, EoRs act as a bridge between you and your employees and are usually responsible for the HR experience those workers receive. An EoR that doesn’t do its job properly could reflect badly on your business and cause lasting damage to your reputation as an employer.
Essential factors to consider when choosing an EoR provider
So, what should you consider when you’re browsing EoR providers in EMEA? In short, it depends on your situation, as the most important thing is to ensure the EoR you choose will be able to meet your specific needs. However, there are several key areas that you should discuss with an EoR before working with them — we’ll go into some of the most important ones below.
Coverage and model
First things first: you need to know that the EoR you choose can provide coverage in the countries you want to hire in. It’s also important to understand exactly how the EoR engages workers in each country.
For example, some EoRs have their own legal entities in every country they operate in. Some partner with local entities to provide coverage, and others use a combined approach. Understanding these differences is key to making an informed decision.
Questions to ask:
- Which countries does the EoR operate in?
- Will the EoR legally employ your workers?
- Is the EoR the direct employer or do they work through partners?
- How are those partners vetted and assessed?
Legal and compliance expertise
Choosing an employer of record with strong legal and compliance expertise is vital to protecting your business and avoiding legal pitfalls. Every country has its own labour laws and tax legislation, which are subject to frequent changes. You need to be sure that the EoR not only understands these complexities, but has robust systems in place for keeping up with the latest legislative updates.
Questions to ask:
- How does the EoR provider keep track of regulatory changes?
- Can the EoR provide written resources on local laws and regulations?
Employment contracts
Every country has its own rules and standards when it comes to employment contracts. Ensuring that an EoR will be able to provide compliant contracts is an important step in choosing the right provider.
It’s also important to find out how easily you’ll be able to customise parts of the contract that aren’t related to local labour laws, such as performance management, compensation reviews, and other company policies. Asking to see contract templates for different countries can give you a clearer idea of what to expect.
Questions to ask:
- How does the EoR ensure contracts are legally compliant in each country?
- Does the EoR create employment contracts internally, or work with external partners?
- To what extent does the EoR allow for customisation of contracts?
Division of responsibilities
When you work with an employer of record, they take on many of the responsibilities associated with hiring a worker. However, you’ll still retain control of day-to-day operations and work-related activities such as performance reviews, learning and development and goal setting. Clearly defining what each party will be responsible for is key to establishing a productive relationship with the EoR.
Questions to ask:
- How will employer obligations be divided between you and the EoR?
- Is this different in the different countries where the EoR operates?
- Does the EoR have extensive knowledge of payroll and HR processes?
- Who will be responsible for termination costs?
- Who will be financially liable for failure to comply with employment rules?
- Who would have to appear before an employment tribunal if an employee made a claim?
- Who will be responsible for ensuring local rules on time tracking and working hours are adhered to?
Customer onboarding and support
When you’re evaluating EoR providers, the support they offer during and after implementation should be a key consideration. You should investigate the level of assistance the EoR will provide during the onboarding process, as well as how you’ll be able to contact them if you have problems later on.
Questions to ask:
- What onboarding or training materials will the EoR provide?
- Does the EoR have a multilingual support team?
- What support channels does the EoR have in place? (e.g. email, phone, live chat)
- What is the EoR’s average response time for customer issues?
- Will you have a dedicated account manager?
Employee payroll and benefits
Running payroll and administering benefits are two of the most important services an EoR provides to its clients. Understanding exactly what this will look like is key to choosing the right EoR.
You need to ensure the EoR has the necessary knowledge and resources to provide accurate, timely payroll in all relevant currencies. Asking questions about the statutory and additional benefits that the EoR provides in each country can also help you to understand the employee experience your workers will receive.
Questions to ask:
- How will the EoR ensure any changes to payroll data from your end are accounted for?
- What is the EoR’s track record for payroll accuracy?
- How does the EoR handle payroll in different currencies and jurisdictions?
- Does the EoR provide a robust benefits package to workers?
- Will the EoR manage time off for holidays, sickness and other reasons on your behalf?
Data management and protection
Employers typically handle a significant amount of employee data — and the same is true of EoR providers. Before working with an EoR, you need to ensure they have the appropriate systems and processes in place to keep that data safe, in accordance with local data protection regulations.
Questions to ask:
- How does the EoR handle payroll data?
- Who will have access to data on your employees?
- Where are the physical servers on which payroll and other employee data will be stored?
- What is the EoR’s disaster management and data recovery plan?
Tools and technologies
Most companies rely on various tools and software programs to manage their workforce, including HRIS, performance management software, corporate communication tools and company intranets. Before partnering with an EoR, you should establish how their software ecosystem will integrate with your existing systems and workflows, and what additional tools you’ll need to use to access their services.
Questions to ask:
- What technologies will the EoR provide access to?
- Will the EoR provide training on any software or tools you’ll have to use?
- How will the EoR integrate into your existing tools and systems? (e.g. HRIS, corporate workspace, performance management tools)
Intellectual property and confidentiality
If you’re engaging workers on projects that involve creating significant intellectual property, it’s important to ensure you retain the rights to it — but this isn’t always a given when working with an EoR.
You should always check whether an EoR’s contracts include provisions for intellectual property and whether these comply with the laws of the country in question. The same goes for provisions referring to confidentiality, which may not be included as standard.
Questions to ask:
- Does the EoR account for intellectual property in its employment contracts?
- How about confidentiality?
- How does the EoR ensure these clauses are in line with local legislation?
- How will these provisions be enforced?
Choosing the right EoR for
The truth is, there are many reputable, knowledgeable and skilled EoR providers out there. But not all of them would be the right choice for your organisation’s specific situation. Above all, you should think about the problems you’re trying to solve by working with an EoR, and ask questions to help you determine whether they’ll be able to achieve that goal.
It’s also important to remember that working with an EoR is usually a long-term partnership. That means you need to consider not only your current needs but how those might change in the future. You should look for providers with scalability and flexibility built into their services, ensuring you’ll be able to work happily together for years to come.
Making an informed decision for your EMEA expansion
Taking the time to thoroughly assess your chosen EoR provider will pay off in the long run. By getting the answers to key questions like what engagement model the EoR uses, how they handle compliance and the ongoing support they’ll be able to offer, you can ensure that the provider you choose is right for your business.
