One of the reasons why outsourcing tasks to an Employer of Record is ideal is because they can take care of responsibilities such as payroll, human resources, compensation of workers, and taking care of taxes that can be challenging for new business owners. There are some things to be taken into consideration in such a partnership to make it an ideal one: by making sure that the benefits are better than what it would cost the client. Let us explore the advantages and the underlying costs in an Employer of Record partnership on a more general scale.
Employer of Record Benefits
The biggest advantage of working with an Employer of Record is that it takes over the administrative roles such as payroll processing, recruitment, and human resources for its client, providing them with extra time and resources that can be used in more important functions.
Beyond the surface, there are many other advantages that an Employer of Record can help a business with. At a reasonable cost, it enables clients to provide compensation and benefits to their employees. They also make sure that the business operation is compliant with mandates and standards so clients would not have to deal with that. Employers of Record also take care of recording and managing expenses to offset the client’s billable income.
Things to take into Consideration
In order for Employers of Record gain profit, a percentage of billings are taken from the client, reducing a portion of their income. This is something that potential clients should keep in mind, although Employer of Record partnerships are designed to help clients generate better income.
For partnerships with Employers of Record to be effective, a few other things should be taken into consideration. For example, working with Employers of Record usually requires strict adherence to processing rules and expense management, as well as appropriate and prompt tax payments against all earned income. Ideally, there should also be a steady flow of work and income coming in to offset benefits purchased such as health and dental that can be provided to the client’s employees.
Flexible Delivery Models
There are other things to note on working with Employers of Record. Depending on the outsourcing model, an Employer of Record can only be limited to provide a business corporate structure that is not entirely independent. A client can also choose not to hand over certain responsibilities to the Employer of Record if they so choose.
Eastvantage offers its clients bespoke outsourcing services that best fit their needs to make an ideal partnership. Contact us today and let’s figure out the best solution for your outsourcing requirements. Visit our solutions page for our delivery models and our portfolio pages for our success stories.