7 Ways to Save Money on HR Expenses through Employer of Record (EOR) Services

In today’s fast-paced business world, managing a growing team can be a complex and costly affair. Many business owners find themselves weighed down by the administrative burden of hiring, onboarding, and managing a diverse workforce. This is where Employer of Record (EOR) services come into play.

Barbara Business-Owner’s company, a thriving law firm, has surpassed all expectations this year. However, as her team and success have grown, so have the complexities of managing a blend of employees and independent contractors. The costs of hiring, onboarding, and continuous management now form a substantial portion of her operating budget. From employee taxes and an envisioned enhanced benefits package to the never-ending paperwork and filings, Barbara realizes that the time investment and growing administrative load are becoming too much to handle.

This is a common predicament for many business owners. The tangible and intangible costs of managing a team can sometimes surprise even the most seasoned businessperson.

Enter the solution: Employer of Record (EOR) Services. By partnering with an EOR, businesses like Barbara’s can offload an assortment of administrative tasks associated with workforce management, from payroll to compliance. An EOR service can liberate time and potentially trim escalating costs. Let’s learn more about what an EOR is and how it can save your business money and time.

What is an Employer of Record?

An Employer of Record is a third-party organization that acts as the legal employer for your workforce. While your company reaps the rewards of the employee’s work, the EOR handles all administrative aspects of their employment, from compliance and payroll to benefits and taxes.

Employer of Record Services May Include:

• Processing and funding payroll
• Depositing and filing taxes and ensuring tax compliance
• Handling unemployment and workers’ compensation
• Issuing Forms W-2 and maintaining employment agreements and contracts
• Collecting and processing time sheets
• Employee onboarding and benefits administration
• Completing and storing Forms I-9 and complying with E-Verify
• Performing background checks and drug screenings
• Administering other employee benefits
• Ensuring compliance with local employment laws

7 Ways to Save Money with an Employer of Record

     1. Assuming the Cost of Onboarding: Employee onboarding is a structured process that can be costly and time-consuming. EORs handle all aspects of onboarding, from paperwork and training to legal requirements such as confidential agreements.

     2. Streamlined Administration: EORs manage all administrative processes, allowing your HR team to focus on strategic initiatives like recruiting, training, development, and employee engagement.

     3. Compliance Assurance: EORs have expert knowledge of labor laws and regulations, ensuring compliance and reducing the risk of costly fines and penalties.

     4. Rapid Scaling and Market Entry: EORs facilitate rapid growth and market entry by quickly onboarding new employees in different states.

     5. Risk Management: EORs assume the liability related to employment, including workers’ compensation, unemployment claims, and employee rights litigation, shielding your company from potential risks.

     6. Enhanced Employee Benefits: EORs often have access to better benefit packages and manage all aspects of benefits administration, from enrollment to claims handling.

     7. Focusing on Core Business Functions: With an EOR handling all employment-related matters, your business can channel its energy into its core competencies, stimulating innovation and driving growth.

A Streamlined, Efficient, and Cost Effective Result.

As Barbara contemplates her firm’s future, she understands that partnering with an EOR could be the game-changer she needs. The potential benefits are too significant to ignore. If your business is in a similar position, exploring the world of EORs could pave the path for a streamlined, efficient, and cost-effective future.

Contact us for a comprehensive guide on HR compliance, so you can focus on what you do best—running your business.

ClearPath is a leading Human Resources Outsourcing company focusing on assisting employers to leverage the independent contractor labor market. We’re committed to helping business owners stay compliant and minimize the risks associated with their contingent labor requirements.

No Legal Advice Intended. This article includes general information about legal issues and developments in the law. Such materials are for informational purposes only and may not reflect the most current legal developments. These informational materials are not intended, and must not be taken, as legal advice on any particular set of facts or circumstances. You need to contact a lawyer licensed in your jurisdiction for advice on specific legal issues.