Why Employer of record and staffing firms are different
When you’re considering delegating some of your business functions perhaps you consider between an Employer of record and staffing firms. It’s important to know the difference between them so you can know which one to choose.
In this article, you’re going to learn everything you need to know about these two types of companies that offer this service. In addition, you’re going to learn the benefits of working with each one of them. Let’s observe:
- Why Employer of record and staffing firms are different
- What is an Employer of Record?
- What are staffing firms?
- Which differences are in terms of roles and purpose?
- What are the differences regarding benefits?
- How does employer of record vs. staffing firms handle liabilities?
- Why Connect Resources can be your best option for your workforce?
1. Why Employer of record and staffing firms are different
Considering an Employer of record and staffing firms as a solution for your business needs it’s a great solution. However, you don’t have to confuse them because they offer different services.
As a business owner, you know that your workforce is your most valuable asset. For this reason, you should look for high-level candidates when you’re hiring.
If you have thought about delegating this responsibility you may be wondering which service provider could be the best one for your organization. A staffing firm could be a great solution but if you would like to obtain more benefits you should consider an EOR.
1.1 Why do you need to know the differences?
Before deciding to enter any business relationship, you should evaluate all of your options. Additionally you should consider the difference between each service provider so you can choose the proper one.
Some of the reasons why you should know how an EOR and a staffing firm are different are the following:
- It allows you to understand how each entity works
- You can select the provider that offers you the best service that matches your needs
- It’s great to learn about roles and responsibilities of each provider
- You can make a smart decision to get the best service
If you want to know the Employer of record responsibilities, it’s important to learn more about it. An EOR offer a comprehensive service that will allow your business to boost its operations.
2. What is an Employer of Record?
To have a better understanding of the differences between Employer of record and staffing firms it’s essential to know how they operate.
An Employer of Record, also known as an EOR, it’s a service provider that becomes the legal employer of your international workforce once you enter into the business relationship. It means that it will take care of everything related with your employees and you won’t have to worry about it anymore.
However, an EOR don’t take control of your business. You still have operational control and make the business decision while the agency takes care of everything related with your human resources.
2.1 What are the responsibilities of an EOR?
To have a better understanding of this service provider, it’s essential to know the business functions they handle.
Some of the Employer of record responsibilities is the following:
- Arrangement and processing of visas and work permits
- Management and administration of company’s payroll
- Ensure compliance with employment laws and offer compliant employment contracts
- Management of employees including any issue that may arise
- Advice to the client regarding notice periods
- Handling and filing of taxes
As you can see, an EOR not only offers help with hiring and recruitment but also handles many other tasks. Therefore, it’s a perfect solution if you’re looking for a partner that helps you have an outstanding HR management.
2.2 Why do businesses work with an EOR?
Some businesses may prefer to work with a third-party like an EOR because it works as an intermediary in the relationship between the employer and the employees. This way, the organization doesn’t have to worry about several aspects.
In addition, the EOR acts as a local entity in the target country where the business wants to make the expansion. Therefore, if you want to open a branch in the UAE you don’t have to set up an entity since the EOR will be your local entity.
There are several reasons why a business decides to partner with an EOR. These are the following:
- Overcome regulatory obstacles
- Save costs in a variety of expenses
- Save time and effort when employer international workers
- Have compliance with local employment and payroll requirements
- Have an ally in the business expansion internationally
3. What are staffing firms?
Staffing firms are another option for businesses that are looking for a partner to help them with their expansion.
Also known as staffing agencies, they act as a middleman between the employer and candidates. Hence, their main objective is to find qualified workers for their client. Businesses that are looking for additional labor usually contact these service providers.
Once you know how these businesses operate you can start understanding the main differences between Employer of record and staffing firms.
3.1 What are the responsibilities of staffing firms?
Staffing firms are a third-party that recruits employees for companies that want to fill their open positions. So, essentially they find new staff for organizations that want to work with them.
Some of the responsibilities of these service providers are the following:
- Write and advertise the job description
- Reach to passive candidates
- Review and interview the candidates that apply for the open positions
- Shortlist the most qualified candidates
- Take care of the recruitment and hiring paperwork
3.2 Why do businesses work with staffing firms?
Once you know the work carried out by this provider, you may be wondering why an organization decides to partner with one of them.
Some of the reasons why businesses opt for staffing firms are the following:
- Have a fast hiring process
- Save time and costs with the new hires
- Reduce risk in terms of hiring
4. Which differences are in terms of roles and purpose?
If you want to know the differences between Employer of record and staffing firms it’s important to learn about their roles as businesses.
When considering the Employer of record pros and cons you should know how they can help you. Therefore it’s important to understand how they differ with staffing firms regarding roles and purpose.
- EOR: an EOR handles all of your HR-related functions. This includes taxes, payroll, benefits, contracts and paperwork. In addition it carries out the screening when you want to hire staff. An EOR also handles termination and worker issues. A business may contact an EOR when they want a comprehensive solution particularly for international expansion.
- Staffing firms: a staffing firm is in charge of recruiting and assigning employees to your business. However, its main purpose is to provide personnel for specific situations like worker absences, seasonal work, special projects and more. A business may contact a staffing firm when it needs temporary staff, long-term workers, temp-to-hire or permanent workers.
As you can see, the main focus of staffing firms is to supply personnel to companies when they’re in need, whether for short or long-term periods. On the other hand, EORs not only focus on supplying staff but also they handle several other business tasks.
5. What are the differences regarding benefits?
When considering the benefits for your business, you should know how Employer of record and staffing firms can help you in this matter.
Depending on which provider you select you may receive excellent benefits by working with them. Since each one offers a different service it’s useful to know how they can help you.
5.1 What are the benefits of working with an EOR?
- Save time: the main benefit of partnering with an EOR is the fact that you will have free time. You won’t have to worry about the exhausting HR functions because the EOR will take care of it.
- Cost-effectiveness: an EOR offers savings to your business in terms of employee benefits, compensation and hiring. With this provider you can offer better benefits to your employees at a better cost.
- Outsource several business functions: You may delegate your payroll, legal, taxes and more business functions to the same provider.
- Onboarding: the EOR ensures your employees start to work quickly and it prepares them for their job.
- Reduced risk: compliance is a major aspect when it comes to hiring internationally. With an EOR you won’t have to worry about rules and regulations because the service provider will keep it up to date.
As you can see, EOR are an excellent solution when you want to receive a comprehensive service that ensures an outstanding HR management. You may get top talent and in addition the third-party will handle everything related with your workforce. Thus, you may focus on your core business activities while your business partner manages your human resources.
5.2 What are the benefits of working with staffing firms?
- Top quality workers: with a staffing firm you can get the top talent that you need as fast as you need it.
- Temporary employees: contacting a staffing firm may be a great solution when you need temporary workers. It can provide you with the worker you need quickly. It’s great for peak season and temporary skill shortages.
- Flexibility: since staffing firms have access to a talent pool you may scale up or down your workforce as you please because you’re sure they’re going to provide you with top workers whenever you request it.
Although staffing agencies may be a great solution for your hiring needs, unfortunately they can’t handle your additional HR functions. This is because they lack the resources and expertise to manage the demand of being an employer. For this reason, even there are Employer of record pros and cons it’s better to work with an EOR.
6. How does employer of record vs. staffing firms handle liabilities?
Liabilities and duties are also part of the main difference between Employer of record and staffing firms. As a business owner, you know that if you fail meeting laws and regulations you may incur in liabilities. Therefore, you need to have a partner that ensures you can work legally and without issues.
- EOR: an EOR is the perfect solution in terms of duties and liabilities. It assumes the liabilities of your business related to employment issues. Hence, the EOR will handle taxes, payroll, administration, benefits and employee records assuming compliance.
- Staffing firms: staffing firms don’t assume HR liabilities since they only focus on providing top talent. They ensure you receive high-quality workers but since they don’t act as employer of your employees they don’t offer this.
7. Why Connect Resources can be your best option for your workforce?
If you’re looking for an EOR that helps you find the best talent for your business you should trust in Connect Resources. We have a team of specialists readily available to solve all your inquiries.
We have been providing our service for the past two decades to several companies in a variety of industries. Our experts can understand your needs and requirements and offer you a customized solution. Hence, your business will have the top talent it deserves to boost its productivity.
Would you like to contact Connect Resources for recruitment services? You can call at +971 433 166 88 or send an email to [email protected], and you’ll talk to one of their representatives that will gladly answer all of your questions.