Do you need an Employer of Record?


If you are aware of the tendencies in the HR sector, you probably know the EOR concept as well. You will also be familiar with it if you want to expand your business internationally and be able to hire people abroad. In this post, we explain when do you need and Employer of Record to help your company grow.

First of all, let’s briefly see what is an Employer of Record. It’s a company acting as a third entity in the relation between a business and that business’ employees abroad. In other words, an EOR is in charge of hiring and onboarding employees; of the payment of salaries; or of bureaucracy related with taxes.

An Employer of Record takes care of the legal and HR side of your employees. So you can focus on managing their tasks and objectives.

What are the functions of an Employer of Record?

You now know, more or less, what an Employer of Record does. But, which are the functions that an EOR company offers? And why might you need an Employer of Record in yours?

Think, for instance, that your company is located in England or the United States. You want to hire employees living in Madrid or Barcelona. Nonetheless, your company doesn’t have a legal entity in Spain. In this case, you probably need an EOR. A company that will legally and contractually become the employer of your workers; but that will not intervene in the work relationship that you and your company have with the employees.

The EOR becomes the legal representative of your workers. It also manages all the HR tasks related with them. Thus, you won’t have to worry about studying the Spanish work regulation; so you can save time and money. You can also save potential legal actions against your business due to the ignorance of our laws. An EOR is your best legal shield. A partner that lets you focus on your goals, while you can actually count on the best talent available in a foreign country.

What should you have in mind if you need an EOR?

If you wish to hire internationally and you have decided to count on an EOR as a partner, you want to ask yourself the following questions. Once you answer them, you will know which are the best Employer of Record companies for your business.

  • Does the EOR work with companies that share similarities with yours? If an Employer of Record has experience teaming up with companies from your sector; or if they are used to working with companies of the size and characteristics of yours, that EOR is a good bet for you.
  • Does the EOR have success references? Of course, you will want to know if your potential partner has helped other clients in their international hiring tasks. Inform yourself, ask other clients of that EOR and decide also with the help of the experience of others.
  • Does the EOR offer an attentive and close service? If you call and get an answer, if you send and email and get a reply in a decent amount of time, or if you need to explain in detail your objectives and they give you the time you need, you know you have found a serious, communicative partner for your company.
  • Is the EOR an expert working in the country where you wish to hire? The EOR’s experience will get you out of trouble. You need a partner that know how to properly respond to each of the little legal challenges that happen on a daily basis. In other words, a company with a wide knowledge of the country’s regulation. You want less things to worry about, not more.
Finding a good Employer of Record is a success guarantee when starting to expand your business internationally.

EOR and PEO: are they the same?

In the HR sector, it’s common to talk indistinctly about EOR and PEO. Nevertheless, they are not the same. Do you want to know the main differences between an Employer of Record and a Professional Employer Organization?

First of all, a PEO is a good option when you want to hire people that work in a country where your company is established. If that is not the case, you need an EOR. Why? Well, because a PEO will ask you to register your business where you want to hire.

With an EOR, you are not legally responsible of your employees. With a PEO, you have to know and fulfill all the local laws all by yourself.

That is why partnering with an EOR or a PEO doesn’t depend that much on the size of your business, as many believe. You might need an Employer of Record, or a Professional Employer Organization, if your company is a small business or a multinational. What you should bear in mind is if you are established or not where you want to hire your employees, when thinking of one option or the other one.

If you need an Employer of Record in Spain, get to know us

New Tandem has more than 20 years of experience in the Human Resources sector. We offer an integral service as Employers of Record and we are the international partner of several foreign companies.

Do you want to know more about us and how can we help you get the best talent available in Spain? Contact with us without any compromise. We will be thrilled to solve all of your doubts.

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