Employers of record (EORs) for startups

Learn how an EOR can help scale your startup.

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Companies of all sizes use employers of record (EORs) to help manage the legal and administrative responsibilities of employing remote workers across borders. These EORs are third-party organizations that legally employ workers on behalf of other companies. They handle compliance, onboarding, employer tax filing, payroll processing, and other HR functions. 

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It’s not just large, enterprise-level businesses that can benefit from using EORs, but also startups as they grow and scale. EORs can help these young companies expand and enter new markets by making it easier to hire internationally. In this article, we'll go into more detail about the value EORs offer to startups.  

Why employing abroad is a good idea for your startup

Hiring internationally may sound daunting to many startup decision-makers, but it provides many benefits. Some of the reasons why hiring abroad might be a good idea for your startup include the following. 

Cost savings

The cost of employing international workers is often less than hiring comparable employees locally, especially if you’re based in a high cost-of-living country like the U.S. You may be able to attract and retain top talent at your startup without paying New York or San Francisco salaries. 

In addition, the required employee benefits vary significantly from one country to the next, affecting employers' total hiring costs. Even while offering competitive and equitable compensation to all employees, employers can still find cost savings by hiring internationally. 

Access to a wider talent pool

Startups that limit themselves to hiring exclusively within their own borders may encounter shortages of highly-skilled employees in various fields.  For instance, software engineers, web developers, IT professionals, and other technical roles are in such high demand that they’re sometimes hard to fill locally. Hiring international employees allows startups to widen their talent pool and increase their chances of hiring successfully for these and other difficult-to-fill roles. 

Even if you're not trying to hire for roles with skills shortages, tapping into a wider talent pool can hugely benefit your startup. A broader talent pool means you increase your odds of finding the best person for the role. If you stick to local candidates, you could miss out on incredibly talented employees from other countries who could really help your startup succeed. 

Ability to scale quickly

If your startup is expanding rapidly and needs to fill a lot of roles fast, hiring internationally makes that easier. International job listings receive many more applications, giving you plenty of potential employees to choose from. You won't have to worry about waiting for applications to trickle in one by one. 

How an EOR can help

Employers of record are set up to help businesses hire internationally. They save companies the legal headaches of employing international workers by handling HR tasks like payroll, compliance, and onboarding. Startups that use EORs can expand globally without worrying about setting up an entity in each country where their international recruits live. Since establishing an entity is time-consuming and costly, working with an EOR is often a better alternative. 

Different types of EORs approach the process of providing these services in slightly different ways. Fundamentally, though, they all help companies hire compliantly in other countries. If you use an EOR, the EOR will act as the formal employer of your new international hire. You won't have to manage the legal and tax requirements placed on employers in that country—the EOR will do that for you. 

An alternative to an EOR is a professional employer organization (PEO). With a PEO, you co-employee your international hires. You still need to be established in every jurisdiction where you use the PEO, which is a drawback compared to working with EORs.  

How Oyster might be a better option

One challenge associated with using EORs to hire internationally is needing an EOR in each location. If you're planning on hiring workers in multiple countries, you'll have to find EORs already set up in each country. This process can be tedious and time-consuming, and take your attention away from growing your startup. 

Working with Oyster may be a better option for startups hiring employees worldwide. Oyster's global employment platform makes hiring international employees from multiple countries easy—from a convenient, easy-to-use platform. Try Oyster today to start scaling your team and your company fast. Bring in the best global talent without all the headaches.

About Oyster

Oyster is a global employment platform designed to enable visionary HR leaders to find, hire, pay, manage, develop, and take care of a thriving distributed workforce. Oyster lets growing companies give valued international team members the experience they deserve, without the usual headaches and expense.

Oyster enables hiring anywhere in the world—with reliable, compliant payroll, and great local benefits and perks.

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