What should you look for in an EOR service?

Expanding your business globally is an exciting milestone but also introduces logistical and legal challenges, particularly when employing international employees. The Employer of Record (EOR) model is an essential option for businesses dealing with the challenges of global hiring. An EOR allows companies to legally employ workers in foreign countries without establishing a local entity, managing everything from payroll to compliance with labour laws.

With the Employer of Record (EOR) Services market projected to grow from USD 4.3 billion in 2023 to USD 8 billion by 2030, it’s evident businesses are increasingly relying on EOR providers to streamline global hiring. But how do you choose the right EOR for your company? Here’s everything to evaluate when selecting a global EOR service.

Key Features to Evaluate in an EOR Service

1. Legal and Compliance Expertise

Compliance is at the heart of EOR services. Local labour laws, tax regulations, and employee rights differ widely from country to country, and failing to meet these standards can have costly consequences. Studies reveal that the cost of non-compliance can be 2.7 times higher than adhering to regulations, with penalties averaging $15 million.

A reliable EOR will:

• Ensure adherence to local labour laws in every country you operate in.
• Manage employee contracts, tax filings, and benefits in line with local standards.

2. Global Coverage

If your goal is to expand into multiple regions, you’ll need an EOR with widespread coverage. According to a PwC survey, 51% of private U.S. companies plan to venture into international markets within the next two years. Companies aiming for rapid international expansion benefit from an EOR with expertise in multiple jurisdictions. Some providers specialize in specific countries, while others operate across 100+ markets, offering support in most countries where you choose to grow.

3. Cost Transparency

EOR pricing often depends on several factors, including employee headcount, country-specific costs, and additional administrative fees. What sets the best providers apart is clear, upfront pricing without hidden costs.

Look out for:

• Transparent cost breakdowns.
• Clear answers on potential setup fees, additional charges, or currency fluctuations.
• Hidden red flags in contracts that could lead to unexpected charges.

Quality of HR and Payroll Services

1. Payroll Accuracy and Timeliness

Payroll errors can negatively impact both employee satisfaction and your reputation. A reliable EOR should have automated systems to ensure accurate, timely payments—preventing delays, missed payments, or costly penalties. Alight’s global payroll complexity report revealed that over 53% of companies faced penalties for payroll non-compliance in the past five years. Choose an EOR offering automated payroll platforms for accuracy and updates on tax regulations. An automated payroll system helps to process monthly wages efficiently, even across countries with varying regulations, ensuring employee trust and loyalty.

2. Employee Benefits Administration

One major advantage of working with an EOR is streamlining benefits management. From health insurance in North America to pensions in Europe, benefits can vary widely across regions. The ideal EOR ensures your benefits package remains compliant and competitive in every market.

Customization is key:

• Look for providers that tailor benefits to meet local regulations and employee expectations. 
• Ensure options for additional perks like wellness programs or training budgets.

Technology and User Experience

1. Robust Digital Platform

The best EOR providers offer centralized technology platforms to track and manage employee data, payroll, and compliance in real time.

Key features to look for:

• Intuitive dashboards for managing employee records.
• Integrated reporting tools for analytics.
• Real-time updates about payroll and compliance.

2. Scalability and Flexibility

Whether you’re onboarding 10 employees or 100 across a range of countries, your EOR should be able to handle your growing needs. Scalability ensures your EOR can expand with you to new countries or accommodate short-term hiring demands.

Client Support and Communication

1. Availability and Responsiveness

Global hiring is unpredictable, which means around-the-clock support is essential. Does the EOR offer:

• Dedicated account managers?
• 24/7 support across time zones?
• Prompt responses to issues or changes?

2. Customization Options

One-size-fits-all solutions often fall short in addressing specific business needs. Look for providers that offer tailored solutions, such as:

• Project-based hiring.
• Able to offer supporting services, for example, supplemental benefits that may vary by employee tenure/role
• Managing workforce in transition, for instance from an M&A carveout

Proven Track Record

1. Reputation and Client Success Stories

A trusted EOR will showcase testimonials, case studies, or awards that highlight their ability to simplify global hiring. Look for providers with:

• Certifications (e.g., ISO compliance).
• Positive testimonials from clients in similar industries or regions.

2. Industry-Specific Expertise

Some industries may require specialized compliance expertise. Choose an EOR with familiarity in your industry’s unique regulations and standards.

Red Flags to Avoid

When selecting an EOR, watch for these red flags:

• Contracts with unclear terms or hidden fees.
• Outdated technology lacking scalability or reporting.
• Limited presence in your target regions, which may lead to hiring delays.

Align Your EOR Service with Your Business Goals

Choosing the right Employer of Record service is about more than just compliance—it’s about aligning the partnership with your long-term business strategy. From streamlining payroll to navigating complex labour laws, the best Employer of Record provider can help you hire globally, faster, and with confidence.

Remember, with the global EOR market growing 6.8% annually, businesses that adopt these solutions are achieving faster time-to-market and enhanced compliance in international hiring. It’s time to expand smarter—find the right EOR to lead the way.