Europe Employer of Record: HR Outsourcing for Global Expansion

    Last updated: 18 September 2023

     

    If you are thinking about international expansion into Europe, you have probably heard of an Employer of Record (EOR). An EOR is a popular HR outsourcing solution for companies that are expanding globally through hiring employees but do not have the time and resources to stay on top of complex local regulations regarding payroll, taxes and benefits. A European EOR is a way to employ people without having your own company or entity in that specific country.

    In this blog, insights are given on how an EOR in Europe can add value to your European expansion.

     

    What is an Employer of Record?

     

    The acronym EOR stands for Employer of Record. An Employer of Record (EOR) is a third-party organization. The EOR provider is the legal employer of record of the hired employees. As a result, the EOR takes all the responsibilities and liabilities concerning employment in the specific country. The EOR hires and pays an employee on behalf of another company and, if necessary, takes care of termination.

     

    What is a European Employer of Record?

     

    A European Employer of Record is an EOR provider with a local entity or multiple entities throughout Europe. EuroDev, as an example, employs employees throughout Europe on behalf of North American SMEs throughout Europe that do not have an office in a specific European country. 

    Employer of Record Europe

     

    What Does an Employer of Record Do?

     

    The employer of record takes care of the legal and regulatory requirements that come with employment in a foreign country. Legally, your staff is employed by the EOR, but you are still responsible for the management of the employees. Activities of an EOR include:

    • Payroll management
    • Employment contract setup
    • Tax advisory and management
    • Benefits management
    • Contact and agreements with local authorities
    • Set up and registration of local entities for a compliant payroll
    • Local insurances
    • Termination and dismissal
    • HR advisory (if necessary)

     

    Why Use an Employer of Record in Europe?

     

    There are several reasons for businesses to use an Employer of Record in Europe. Hiring an EOR gives the company the opportunity to manage its time more efficiently and effectively. An Employer of Record allows companies to legally and efficiently engage with overseas employees in a new country without having to set up a local entity or risk violating local employment laws.

    Every European country has different local employment and payroll regulations. The challenges of meeting the local rules and regulations can be a major obstacle to international business expansion.

     

    Benefits of using an employer of record

     

    • Expand without a local entity,
    • Flexible and cost-effective solution to outsource payroll and HR functions for
      international expansion,
    • In compliance with foreign local laws & regulations,
    • Access to an international talent pool,
    • Minimizes employment liabilities and risks,
    • Let's you focus on your core business,
    • You manage your employees,
    • EoR takes care of registration and contact with local authorities,
    • Reduced risk, as the risks of being an employer, fall almost completely on
      the employer of record.

     

    EuroDev brings additional benefits as an EOR as we have over 21 nationalities within our company. Our European HR and Financial consultants are well aware of European cultures, languages and rules & regulations.

     

    Who uses an EOR?

     

    An EOR is often used for global expansion when a company plans to conduct business activity in a new country without a physical entity. Any business can find value in an EOR relationship. Mostly, SMEs are using an EOR as they often do not have the necessary resources to do it themselves. EORs can add value for businesses in any industry, ranging from accounting firms to high-tech companies and small manufacturers. 

     

    Guidelines for Choosing an EOR in Europe

     

    Meet the people who will be serving you and make sure the EOR is capable of meeting your goals.

    • Check the reputation of the Employer of Record:
      How long have they been in the business? Have they worked with similar
      clients to you? Ask for client and professional references.

    • Check their servicing model:
      Can they provide the care and attention you need? Is their servicing model
      customizable?

     

    Learn More About Employer of Record Aspects per European Country

     

     

    FAQs 

     

    1. Do business owners lose control of their business when they work with an EOR?

      No, the business owner retains ownership of the company and control over its operations. EOR only has an administrative role and will not interfere with the daily work or management of staff. 

     

    1. What is a global EOR or European EOR?

      A global or European EOR is an outsourced back-office administrator for companies with international employees. In short, Employers of Record place their clients' international staff on their own EOR payroll.

     

    More information

     

    In case you would like to have more information about Employer of Record in Europe, do not hesitate to connect with Monique Ramondt-Sanders – VP of Human Resource Outsourcing at EuroDev.

    For more information concerning our HRO services, have a look at HR Outsourcing.

     


    Disclaimer: While we strive to provide accurate and timely information, please note that HR policies and regulations can change frequently. It is recommended that you seek guidance from our HR consultants to ensure that the data presented here is current and accurate.

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