Your client runs a remote-first workplace. Now, they’ve asked you to start looking for talent beyond borders. Why? Chances are they want access to the world’s top performers — no matter where they’re located.
Is your agency able to meet this challenge? Success will require an infrastructure that allows you to legally onboard top international talent when they're needed, where they're needed. But how do you make that happen?
One option: You could build an extensive (and expensive) network by opening a local entity in every country where your clients need to hire.
However, establishing entities takes time, and chances are you won't be able to scale quickly enough to meet your clients' needs.
A better solution: partner with an Employer of Record (EOR).
Key takeaways:
- Being able to quickly and compliantly hire talent in multiple countries without setting up legal entities can give staffing agencies a competitive advantage.
- The HR functions and legal complexities of global employment — such as payroll processing, taxes, and compliance — can be tricky for a staffing agency to administer without a presence in each country.
- Staffing agencies that work with EORs can enable clients to convert international contractors to full-time employees while mitigating legal risks for both clients and their employees.
What's an EOR, and How Can it Help Staffing Firms?
An EOR enables staffing agencies to compliantly hire global talent to work for their clients, regardless of where the client or the worker is based.
How? By handling all the administration and legal details of employing global talent, from payroll and tax compliance to employment contracts and employee benefits management.
Ultimately, this means that instead of turning down clients with international hiring needs, you can partner with an EOR to:
- Expand your talent pool and place workers in new markets without the time and expense of setting up a foreign entity.
- Mitigate the compliance risks associated with navigating local regulations and tax requirements.
- Offer flexibility and scalability to adjust your available workforce to meet client needs.
- Simplify the hiring process by streamlining it from end to end.
- Easily convert independent contractors and freelance talent if and when your clients want to bring them on as full-time employees.
You Place the Talent. The EOR Becomes the Legal Employer.
When you partner with an EOR, you still source, vet, and place the best candidates for your clients.
Once you've identified a perfect fit, the EOR becomes the individual's formal employer. In this role, they assume all the legal and tax responsibilities, including compliance with local labor laws.
Still, the day-to-day management of the employee — including their tasks, projects, and performance — remains under your and your client's direction.
You get the best of both worlds: you source and place the right talent, and the EOR handles all country-specific legalities on the backend.
This model allows your agency to expand its reach globally by avoiding the need to set up individual subsidiaries and offloading the burden of navigating complex legal and tax systems in each country.
Why This Matters for Staffing Agencies Today
As global staffing continues to grow in popularity, the ability to hire someone no matter where they live is increasingly essential. If you're not equipped to help clients source talent internationally, your clients may go to an agency that is.
Think of it like this: Your client wants to hire a software engineer in Colombia and a marketing manager in Poland. But managing contractors on two different sides of the world may sound like a stretch, right? An EOR makes it easy.
EORs can:
- Mitigate legal risks: Hiring international freelancers opens businesses up to the complexities of navigating local laws. EORs ensure adherence to all local labor laws, protecting your agency and client from significant legal and financial penalties.
- Speed up the hiring process: Setting up a legal entity to hire in a new country is time-consuming and can take months. With an EOR, you can onboard a new hire in days, sometimes sooner, giving your clients faster access to the talent they need.
- Simplify compliance: Navigating dozens of countries' specific labor laws, statutory benefits, and termination rules is nearly impossible without expert help. An EOR handles all of this for you, ensuring compliance is maintained every step of the way.
- Increase your efficiency: Partnering with an EOR removes the administrative and legal burden of international hiring, enabling you to deliver talent more quickly and efficiently and exactly where and when your clients need them.
- Offer benefits: It's no secret that companies must offer competitive compensation and benefits to attract top talent. An EOR can provide attractive benefits packages that meet local standards, helping your agency attract and retain the best candidates in the global market.
Real-World Use Cases
Say, for example, that a startup in San Francisco asks you to find a specialized Machine Learning Engineer with expertise in natural language processing. The best candidate you locate happens to be based in Brazil.
The problem? Brazil is a country where neither your agency nor the startup has an established legal presence.
Ordinarily, this would be a dead end. The client couldn't legally hire the engineer without an established legal entity in Brazil, a process that takes months.
If your agency already partners with an EOR, however, a prospective employee's location isn't an issue at all. Though the client won't be able to hire that employee directly, you can staff them as a contractor.
Sounds good, right? Now, let's look at a use case where your client wants to convert a contractor they already work with to a full-time employee.
Let’s say the client has been working with a marketing consultant in Germany. It's been six months, and the contract is up for renewal. Since the consultant has been a top performer, the client wants to make them a permanent, full-time employee.
Converting an international contractor to an employee is a legally complex process. The client can't just change an employee's title; they need to ensure that the new employment relationship complies with German labor laws, which are very specific about employee rights, benefits, and contracts.
Since you work with the EOR that serves as the contractor payment platform, you can help make the transition easy. It's as simple as the client informing you of their decision to convert the contractor. The EOR then handles the rest by:
- Reviewing the contractor's existing role to ensure they can legally be classified as an employee under German law.
- Drafting a new, compliant employment contract that includes all legally required clauses, such as notice periods, working hours, and benefits.
- Transitioning the worker from a contractor payment system to a compliant employee payroll, ensuring they receive health insurance, pension contributions, and paid leave as mandated by German law.
Ultimately, your agency partnering with an EOR ensures your client can hire and manage the talent they need, correctly classify them, and avoid the significant legal risks involved in this complex process.
What to Look for in EOR Services
Ideally, working with an EOR extends your team's capacity and expertise. It ensures that neither your agency nor your clients has to worry about worker misclassification or running afoul of local employment laws.
Ready to start your search? Here are the most important things to consider when evaluating potential EOR partners:
- Geographic reach and local expertise: The EOR should have a well-rooted presence and in-depth knowledge of local labor laws, tax regulations, and cultural norms in the countries where your clients have staffing needs (and where you think they will in the future).
- Transparent and competitive pricing: Look for a partner that promotes a straightforward pricing model without any hidden fees for services like setup, onboarding, or offboarding. Costs should be clear and predictable, allowing you to budget for global placements easily.
- Fast and compliant onboarding: The EOR's process for generating employment contracts and onboarding new hires should be quick and efficient. This speed can be a major selling point for your clients since it allows you to place talent fast.
- Support for full-time and freelance employment: A top-tier EOR can manage both contractors and full-time employees. This flexibility is essential for all clients, especially those who want talent to start on a short-term contract and later convert the worker to a permanent employee.
- Solid tech and support systems: The EOR should have a user-friendly platform that simplifies administrative tasks for both your agency and the employees. This includes features for payroll management, time-off requests, and accessing payslips.
Last but not least, research the EOR's reputation. (Need a place to start? Take a look at reviews of some of the major players on G2.)
Hire and Place Talent With RemoFirst
RemoFirst empowers your staffing agency to seamlessly hire, onboard, and pay employees in over 185 countries and contractors in more than 150 countries. All while ensuring full compliance with local labor laws.
Our intelligent contract agreement generator customizes employment and contractor agreements in line with regional regulations, including built-in IP protection clauses to safeguard your clients' interests.
Whether you're hiring AI talent in India, a marketer in Spain, or a design consultant in Japan, we help you stay compliant every step of the way.
RemoFirst takes the complexity out of global HR by managing:
- Employment contracts and classification
- Payroll and tax compliance
- Benefits administration
- Local labor law compliance
- Contractor invoicing and payments
- IP and confidentiality protections
- Offboarding processes
And if one of your clients wants to convert a contractor into a full-time employee, we'll help with that transition — including guidance on classification, benefits, and compliance.
Ready to learn more? Schedule a demo.
