Is your business planning a global expansion? That's an exciting time; it means your company is leveling up. But, while international hiring means more opportunities, it can also be a complex process to navigate.
From legal requirements to local hiring norms, cracking the code of new labor markets can sometimes feel a bit overwhelming.
Luckily, hiring your global team doesn't need to be a headache. You can confidently hire highly skilled international workers by working with an Employer of Record (EOR) or a staffing agency.
But how do you know which method is best for you? It depends on your goals, but essentially, it comes down to one question:
Do you need long-term international employees or temporary workforce solutions?
Key Takeaways:
- Employer of Record services enable businesses to hire full-time international employees without setting up a local entity or risking compliance issues.
- A staffing agency is ideal for hiring temporary or contract-based workers to fulfill short-term needs.
- Companies can use both EOR services and a staffing agency to meet specific needs and hiring goals, ensuring flexibility and compliance.
What is an Employer of Record (EOR)?
An EOR is a third-party organization that legally employs international workers on behalf of another company.
EORs enable businesses to expand into new markets and regions without first establishing a costly legal entity. The EOR manages compliance and adherence to local labor laws, reducing the company's legal risks.
Businesses delegate formal employment tasks and liabilities (like managing employment contracts, global payroll, benefits, compliance documents, and onboarding) to the EOR but continue to oversee their new employees' day-to-day workload.
What Are the Advantages of Using an Employer of Record?
EORs allow businesses to expand their talent search beyond borders, making hiring skilled workers for hard-to-fill roles easier — no matter where potential employees live.
The growing popularity of EORs is evident — the global EOR Market size was USD 4.9 billion in 2023 and is projected to reach USD 8.59 billion by 2032.
EORs can help businesses:
- Expand into new markets to test the waters with less risk and up-front capital.
- Optimize costs by gaining the ability to hire employees legally in lower-cost labor markets.
- Find specialized skills outside your local area to fill hard-to-staff technical roles.
- Hire legally without the need to establish a local legal entity.
- Improve productivity and expand coverage by hiring workers in different time zones.
- Reduce risks as it's on the EOR to handle complex local employment laws and evolving compliance regulations.
- Outsource payments and employee benefits to experts in that region's currency, tax laws, and benefit expectations.
When is an Employer of Record the Best Choice?
An Employer of Record is an ideal choice for businesses looking to expand globally, hire top talent, and ensure compliance without the complexities of establishing an entity first.
Opening an entity and/or navigating complex employment laws can delay hiring. Partnering with an EOR enables companies to hire and onboard employees quickly.
And because the EOR ensures compliance with local labor laws, tax regulations, and benefits administration, business owners can focus on growing their business — not spending valuable time mastering the employment laws of another or potentially multiple countries.
What is a Staffing Agency?
A staffing agency (frequently called a recruitment or employment agency) helps businesses employ temporary or contract employees.
Acting as a middleman, the staffing agency helps companies quickly fill roles by sourcing candidates from the agency's talent pool.
Potential candidates have already been carefully screened for skill set, experience, certifications, and cultural fit. This expedites the recruitment process, particularly for difficult-to-fill technical roles.
Staffing agencies are frequently used to fulfill short-term vacancies (like covering an employee's maternity leave) or for seasonal staffing needs in retail, customer service, or healthcare industries.
Unlike an EOR, the staffing agency does not take on full liability for workers, which can lead to potential issues like worker misclassification.
Agencies may also be unable to hire workers in every country, so vetting the staffing agency's operational reach before partnering is essential.
What Are the Advantages of Using a Staffing Agency?
Staffing agencies handle the bulk of the hiring lifecycle — sourcing, vetting, and placing workers in temporary, part-time, or full-time positions.
Many staffing agencies manage employment-related tasks, like contracts and payroll processing, reducing the administrative burden on your internal team.
However, unlike an EOR, staffing agencies rarely offer long-term employee management, benefits, or legal compliance.
The advantages of staffing services include:
- Faster hiring process: Find, interview, and place workers with minimal involvement required from your human resources team.
- Larger talent pool: Staffing agencies are expert recruiters with large databases of qualified candidates for popular positions.
- Reduced administrative tasks: Staffing agencies handle everything from contracts to payroll for their temporary workers.
- Flexible staffing: Businesses can employ part-time, contract, or temp-to-hire workers to fulfill short-term needs or give a worker a trial run out before committing to a full-time hire.
- Immediate placements: Staffing agencies offer quick turnaround times, with some able to fill roles within one day.
When is Using a Staffing Agency the Best Choice?
Staffing agencies are the best choice to fulfill short-term or immediate needs. For example:
- Hiring seasonal retail staff to support the busy holiday shopping season
- Finding a highly skilled software admin with specialized certifications
- Quickly filling an unexpected vacancy
- Expanding a team for a short-term contract
- Testing a candidate's suitability in a temp-to-perm position
The staffing agency has a large talent pool, expert recruiters, and internal processes in place to quickly hire and place workers on your team, particularly when you're not looking for a long-term hire.
Can I Use Both a Staffing Agency and an EOR to Hire Employees?
Absolutely. You can partner with both a staffing agency and an EOR to meet different hiring needs.
An EOR enables you to employ full-time international team members while safeguarding your business against potential risks.
A staffing agency can help with short-term, temporary hires, such as to cover for one of your team members who is out on short-term disability.
What Are the Key Differences Between an EOR and a Staffing Agency?
Competition for top talent is fierce. In fact, 37% of talent acquisition professionals say competition from other employers is their biggest recruiting challenge.
EORs and staffing agencies are each equipped to help you hire top talent, but they differ in the types of employees they can help you employ.
An EOR is ideal for long-term employment, allowing companies to hire full-time employees in foreign markets without setting up a legal entity.
In contrast, a staffing agency focuses on finding temporary, short-term, or contract workers and managing recruitment and placement without providing full employment benefits or long-term HR support.
Staffing Agencies Help with Temporary Staffing Requirements
A staffing agency recruits and fills open roles on your team, particularly for short-term contracts or specialized skill sets.
Staffing agencies may only operate in one or a handful of countries, limiting the scope of where they can recruit workers. Agencies also don't cover legal and regulatory compliance requirements as completely as an EOR.
Staffing agencies charge one-time fees based on worker placement — typically, a percentage of the candidate's salary or a fixed price per role.
EORs Support Hire Long-term International Employees
An EOR functions as an international employee's legal employer, overseeing HR tasks like payroll, taxes, and benefits.
Working with an EOR also offers considerable cost savings over establishing a local entity or hiring additional in-house HR/legal staff to oversee compliance issues for international team members.
For example, at RemoFirst, our pricing starts at $199 per person per month for employees, and independent contractor services cost $25 per person.
You get all of the legal protections and none of the administrative headaches for a reliable, low-cost fee.
Easily Employ International Employees with RemoFirst
We'll help you get the right team in place to advance your goals and international ambitions.
As an EOR, RemoFirst enables you to employ full-time workers to support and grow your business in 180+ countries.
We'll handle all the formal employment tasks, from payroll to benefits and compliance documentation to onboarding.
Schedule a demo today to learn more.
