Scaling your business across borders opens up endless possibilities, but successfully navigating complex foreign labor laws while staying compliant can be overwhelming. Whether you’re entering a new market, hiring international talent, or expanding your remote workforce, a streamlined global HR process is critical to your success.
An Employer of Record can be a game-changer for businesses expanding into new regions or countries. It helps reduce risk, streamline global HR processes, and lets you focus on what really matters—growing your business while staying compliant with local laws. But choosing the best EOR isn’t always straightforward. Your ideal partner can help you grow faster while minimizing compliance risks, while the wrong one can lead to fines, payroll errors, and hidden costs that slow growth. This guide will help you find the perfect fit for your business.
What is an employer of record?
An employer of record (EOR) is a global employment organization that legally hires, pays, and manages a company’s international employees on its behalf, allowing the company to enter into new markets with peace of mind. Operating in multiple markets means navigating various tax requirements and HR tasks. An EOR handles all risk mitigation and ensures ongoing compliance with local labor laws and regulations on your behalf.
12 critical questions to consider when choosing the best employer of record for your business
1. Do they have expertise in the markets where you want to expand or hire talent?
An EOR with in-country teams offers significant advantages over inexperienced providers. Local teams know the ins and outs of worker classification rules, local labor laws, payroll requirements, tax codes, and other mandatory compliance standards. This on-the-ground expertise lets them deftly navigate constantly changing laws and regulations with ease, helping ensure compliance and reducing the risk of costly mistakes or penalties. Their in-depth cultural and job market-specific knowledge means you can tailor your recruitment, compensation, and employee retention strategies to resonate with local talent.
By understanding the local landscape, an experienced EOR can ensure smooth operations while adapting strategies to meet the specific needs of each region. This helps your business grow and scale without unnecessary complications, which is critical for companies that want to scale quickly and smoothly with the best talent.
But an inexperienced EOR partner? They may seem like a cost-saving option at first, but their lack of expertise can lead to additional costs and hiring delays. They often struggle with the complexities of local labor laws and regulations, requiring extra research and adjustments that can slow down your hiring timeline. Missing out on top talent becomes a real risk when delays happen, and the time and money spent on fixing mistakes adds up quickly.
Non-compliance is another big concern. Without in-depth knowledge of local laws, taxes, and benefits, an inexperienced EOR could expose you to fines, legal fees, and reputational damage. These risks grow even larger when they don’t understand the job market well enough to build effective retention strategies. Ultimately, the savings you thought you’d get might not be worth the trouble, putting your business in a risky situation you can’t afford.
When taking the plunge into global hiring, you need a partner you can trust. Look for an EOR with proven expertise and experience in the markets where you want to grow your operations or recruit talent—one that can help you easily navigate in-country rules and regulations and stay compliant.
2. Are they upfront and transparent about pricing?
When choosing a global EOR provider, pick one that’s clear about pricing from the start. Be wary of setup fees, taxes, or termination fees on top of their initial quote. Hidden fees and markups could pop up later, throwing off your budget and impacting departments within your business. To avoid surprises, ask your prospective EOR to present every element of their pricing upfront. A trustworthy EOR will be transparent and disclose all potential expenses before moving forward.
3. How committed are they to supporting your success?
You need an EOR partner fully committed to your business’s success regardless of the size of your international workforce. Choose one that provides you with a dedicated account manager, not one that pushes you to a chatbox or guidebook. A responsive EOR with in-country teams will be there when you need them, providing timely support, answering questions, and assisting your teams in local languages and time zones. This level of personalized support ensures your workforce stays engaged and your business stays on track.
A trustworthy EOR partner will invest in your success and proactively work to optimize your global expansion. They’ll focus on ensuring compliance, mitigating risks, and fostering a positive employee experience that drives productivity and retention. With them handling the details, you can confidently scale your business and focus on your core objectives, knowing your international workforce is in good hands.
4. Can they demonstrate a proven track record of customer success?
When you find an EOR that promises an unmatched compliance track record, in-country expertise, clear pricing, comprehensive benefits, and stellar customer service — make sure they can deliver.
Read testimonials and case studies on unbiased sites. Look for stories where they helped clients overcome significant challenges and contributed to their growth. Ask for references from current or past clients, especially those with goals and qualities similar to your business, such as budget, industry, and the types of talent they work with. An experienced EOR will happily share these examples to showcase their success in managing global workforces.
5. Do they have entities in countries where you need to hire talent?
Review the countries where the EOR has established entities and compare them to the countries where you plan to hire talent or may expand operations in the future. Missing this critical step could leave you scrambling for a workaround, like waiting for your EOR to establish a new entity or onboard a third-party partner to provide the necessary services.
You might be required to hire another EOR to bridge the gap. This will add complexity and delay your ability to hire, onboard, and manage talent swiftly and easily. It also opens you up to compliance risks such as incorrect tax filings, violations of labor laws, or delays in payroll processing.
You need an EOR partner that covers all the countries you’ll need today and tomorrow. Look for one with a broad reach and the local compliance knowledge you need to stay on the right side of the law.
6. How do they handle foreign exchange rates?
Fluctuations in foreign exchange markets can lead to unexpected costs for your growing business. Selecting a global EOR partner with a clear, transparent, and fixed-rate structure for foreign exchange transactions can reduce this risk. This way, you can manage costs with confidence and avoid unexpected fees.
7. Do they provide accurate employer burden calculations and quotes?
Labor requirements in foreign markets can vary greatly, especially when it comes to employer responsibilities, social contributions, and value-added tax (VAT) requirements. Your global EOR is responsible for providing accurate quotes on additional employer costs for each of your markets. If these calculations are incorrect, your business will face legal and financial risks.
Don’t settle for just any EOR—go with one that’s been pre-vetted by third-party auditors. Look for an EOR with a proven track record of accurately calculating employer burden costs. This ensures they follow best practices, comply with local requirements, and reduces the risk of costly fines or legal issues from miscalculated employer obligations. For example, a Big Four accounting firm verified our employer burden and value-added tax (VAT) quotes as 99.63% accurate. You deserve to know exactly what you'll pay so you can plan with confidence.
8. Can their solutions and services scale with your business?
Your business is dynamic, and your needs will evolve over time. You may need to manage and pay international contractors, convert contractors to employees, or relocate talent from one country to another. Instead of searching for and managing multiple HR providers, use a global EOR partner built to scale with you. Look for a partner that offers an AI-powered platform backed by in-country experts who are ready to meet all your global workforce needs. Check for services beyond EOR and global payroll. Can they handle global benefits, immigration, international pensions, and equity management? Asking these questions will help you hit the ground running today and future-proof your business for tomorrow.
9. Are they ranked as an industry leader by third-party sources?
When selecting a global EOR partner, it’s important to extensively vet your options to ensure they can support your business as it grows. A great way to expedite this process is by reviewing third-party validation reports. They can help you quickly identify and verify EOR leaders in the industry.
Third-party analysts rank EOR partners based on their ability to deliver immediate client benefits and meet future needs over time. According to the latest industry reports by EOR analysts such as the Everest Group and NelsonHall, leading EOR providers offer comprehensive global workforce platforms and services that can support your business at every stage of its global expansion. An EOR leader’s local expertise and global scale will help you grow your workforce anywhere with speed, compliance, and confidence.
To make your search easier, download the latest Everest Group PEAK Matrix and NelsonHall NEAT reports to compare top global EOR leaders and find the right fit for your business.
10. How do they protect your global workforce data?
Data security is critical when managing a global workforce. Ask the EOR provider to share their compliance policies, including how they adhere to major data privacy regulations such as the General Data Protection Regulation (GDPR) in Europe, the California Consumer Privacy Act (CCPA) in the U.S., and other regional or international privacy laws. If doing business in any Asia-Pacific Economic Cooperation (APEC) countries, ask if they have the necessary requirements for cross-border data transfers within APEC economies. They should be able to provide you with documentation proving their adherence to these systems.
Ensure your EOR is certified to the highest global standards. Ask for a copy of their data processing agreement (DPA), which should outline how they handle personal data on behalf of clients. This legal document should specify both their responsibilities and your rights regarding data protection, and it should align with industry standards and legal requirements.
Inquire about any security certifications and accreditations they hold. Look for ISO 27001, SOC 2 Type 2, and SOC 3. Certifications and security criteria like these show how committed an EOR provider is to protecting your workforce data and privacy. Lastly, look for the gold standard in data encryption: AES-256 encryption.
11. Does the EOR offer immigration support in a wide range of countries?
When it’s time to relocate an employee, an EOR with global immigration support across a large number of countries is a must. Immigration laws and processes vary greatly from one country to another. An experienced EOR ensures that the relocation happens smoothly and complies with each country’s specific requirements, minimizing the risk of delays, fines, or legal issues.
With global support, the EOR can manage all the necessary work permits, visas, and documentation, making the transition easier for the employee and your business.
12. What is their track record on paying global talent on time?
Late payment can cause a wide range of headaches, from employee frustration to hurt morale and even legal trouble.
Finding an EOR with reliable global payroll capabilities is a must. They’ll ensure your employees are paid on time, every time, so you maintain a positive work environment and avoid any disruptions in your operations. This also helps keep your business compliant with local labor laws, which often have strict regulations regarding payment deadlines.
To vet an EOR’s global payroll capabilities, ask for references and case studies that show they consistently meet payroll deadlines. Review their service level agreements (SLAs) to ensure they have clear commitments around payment timelines. It’s also worth looking into any certifications or third-party audits they have, which can give you confidence in their processes. Ask about the technology they use to handle global payroll. Also, make sure they have solid systems in place for accuracy and efficiency. Lastly, and most importantly, research their history with local authorities to confirm they have a reliable compliance record in the countries you want to hire.
By taking these steps, you can ensure that your EOR will handle payroll without delays, helping you avoid any potential disruptions or issues down the line.
Partner with an EOR industry leader you can trust
Velocity Global gives you the power to build and manage your international workforce with confidence. As a leading Global Workforce Platform& Services provider, we combine AI-powered technology and local, in-country expertise to simplify every aspect of workforce management. From hiring and payroll to compliance and retention, we make it easy to grow your business across 185+ countries. With Velocity Global, a world of opportunity is yours.
Contact us to learn how we can help scale your workforce globally.
