Employer of Record Services: What You Need to Know

Employer of Record Services

“Businesses grow or die based on the quality of their people, so the human resource executive role is arguably the most strategic in the company.”  – Owen Mahoney, CEO, Nexon, as reported by Harvard Business Review

It’s a widely-accepted truth that how your employees feel is a good indicator of your customer experience. It’s why successful businesses make employee engagement a top priority. Connections are important, both internal and external. And, this has made human resources much more than an employee-centric role.

HR leads are getting involved in decision making at the highest levels. In fact, a survey reports 71% of HR heads “are spending more time on business issues not related to HR or talent.” They’re updating corporate governance rules, “managing relationships between board members” and more. The unfortunate effect is the focus on their most valuable asset – their people – has diminished. Plus, their reach has spread thin. This made the top 2017 resolution for HR professionals to increase efficiency and pare down processes. And, many organizations are finding a solution in employer of record services. 

What are Employer of Record Services?

Employer of record services (EOR) can fulfill these HR goals. They let organizations offload several administrative HR tasks. The EOR partner can assume many HR burdens after the client recruits new hires. These include on-boarding and off-boarding, payroll, insurance and benefits. In experiential marketing, a similar service is Experiential Employee Management Services (EEM), wherein a staffing company acts as a co-employer for it’s clients’ internally-recruited field teams. 

Yet, these relationships can bring many benefits beyond efficiency. One is lower costs when certain functions are no longer needed, such as payroll. Plus, in the event world, experiential employee management services come with a lower price tag than traditional staffing and management services. This is because the client retains control over recruiting, screening, and talent selection. Other benefits include the mitigation of legal risks and greater employee engagement.

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Does Your Organization Need Employer of Record or EEM Services?

An EOR or EEM can take on several HR admin functions. These four questions can identify areas in which your organization may enjoy such a partnership.

1. Do you often need temporary or contract staff?

The IRS is cracking down on employee misclassification. So, employers cannot afford mistakes in the handling of temporary or contract workers. Yet, hiring any staff for any amount of time comes with as much paperwork and attention as regular employees. This makes the hiring of temporary staff a good target for employer of record services or experiential employee management.

An EOR or EEM becomes the official employer of short-term workers. It handles their on-boarding, payroll, off-boarding and more. So, not only do you save time to focus on other tasks, you also cut your organization’s legal liability. This reduces risks of penalties and fines by federal and state governments.

2. Does your employment branding extend to temporary staff?

The parallels between employee satisfaction and customer experience are clear. And, a Forbes article sums them up well. “If your employees do not believe in the brand and what it stands for, then your customers down the line will quickly follow suit.” When it comes to working for an organization, clear communication and open dialogue is key to ensuring employee satisfaction. And in experiential marketing, these temporary staff are the ones directly interacting with your customers. They need to have the utmost confidence and satisfaction in your brand.

Thus, the way your teams are on-boarded is very important. From the start, you need to make sure that they are clear on all processes, procedures, and expectations. Even though these staff are not a part of your core in-house team, they need to be given the same resources as other team members. EOR and EEM services include thorough on-boarding and HR management that insures temporary staff get off, and stay, on the right foot. Your company also saves time on HR details to allow you to focus on cultivating your own relationship with your new temporary members. The result is an improved employment brand.

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3. Is your HR department over tasked as it is?

HR acts as a sounding board for employees and helps keep the peace. Yet, employee screening, benefits and more often leave little time, if any, to know the temperature within the organization. It’s even harder to keep up when you add on temporary staff, raising the risk that employee issues for both internal and temp staff go unresolved. An Entrepreneur article tells us that emotions are contagious. “Negative emotions will cost you big if left alone.” Again, the correlation between employee and customer satisfaction tells us this is true. But, organizations can mitigate all these issues with employer of record services or EEM.

Through the offloading of various responsibilities, the EOR or EEM completes critical tasks. And, there’s more time for HR and management to observe and talk with employees to ensure a positive environment. In addition, EOR and EEM partners also handle issues that can arise outside of typical administration, including corrective actions for performance issues and off-boarding.

4. Has payroll administration ever been a challenge?

Paying your temporary staff the right amount on-time is vital to employee satisfaction and HR compliance. Yet, issues can occur when an HR team administrates on a larger-than-normal scale or in unfamiliar situations. Government regulations are ever-changing, and come with serious penalties when not upheld. Whether related to state-by-state laws, taxes, health care, employee classification and more, it’s critical to follow the letter of the law. That means internal HR and payroll teams must be capable of managing these details for all types of temporary staff to protect your organization.

Instead of taking the risk, many organizations look to an EOR or EEM to take on the job. In doing so, they get the peace-of-mind that comes with knowing that your partner is well-versed in paying and managing temporary staff in hundreds of locations. And oftentimes, these partnerships can save your company money. The latter is possible when in-house resources, such as personnel, software and training, are no longer necessary, and the risk of litigation is dramatically decreased. And, this makes HR outsourcing a potentially positive strategic decision for your company’s well-being.

EPS has served the temporary staffing needs of countless organizations for almost 18 years. Through our experiential employee management services, we ease burdens of payroll, on-boarding, benefits and more. Contact us to learn how we can help you save time and money while lowering the risk of liability.
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About JESSICA STACKPOOLE

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