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With the rise of flexible work arrangements in modern business, companies have discovered the advantage of short-term hires. However, managing temporary human resources (HR) can be challenging.
Regulatory compliance, payroll accuracy, and administrative burdens present many hurdles. Hence, businesses leverage employer of record (EOR) services to bridge gaps.
Continue reading to learn how companies can leverage employer of record solutions for temporary employment management. This article also provides a quick guide to the potential challenges that arise in EOR partnerships and their respective solutions.
Five benefits of EOR services for temporary staff management
Adopting EOR services offers many advantages in HR management and market entry, especially for small- to medium-sized businesses (SMBs) focused on growing their teams and expanding operations.
To better grasp the extent of EOR’s benefits, let’s first understand the strategy’s nature and role. Similar to business process outsourcing (BPO), this practice involves delegating tasks to an external service vendor.
If information technology (IT) support outsourcing covers technical processes, EOR services focus on HR-related tasks such as:
- Talent acquisition and recruitment
- Onboarding and onboarding
- Payroll and benefits administration
- Tax reporting and administration
- Regulatory compliance
- Workforce support and management
These features help reduce administrative burdens associated with workforce management. EOR services allow businesses to focus on core activities while boosting efficiency in relevant processes, making them widespread.
In fact, according to Valuates Reports, the global EOR market reached $4.3 billion in 2023. Meanwhile, Business Research Insights reports it will grow to around $8 billion by 2031.
How exactly do employer of record services help businesses with temporary employment? Let’s discuss the practice’s most known benefits below:
1. Ensured compliance and risk mitigation
The EOR firm acts as the legal employer for short-term staff and is primarily responsible for compliance. You won’t have to worry about understanding and keeping up with ever-changing labor laws, which become more complex with short-term employment.
EOR firms employ dedicated teams that stay updated with local and international regulations for temporary workforce management. These teams cover all aspects of compliance, from identifying relevant laws to providing reporting, auditing, and data entry services.
Reliable providers have established processes that adhere to relevant codes across various jurisdictions, including those that involve:
- Worker classification
- Tax withholding
- Benefits administration
- Wage and hour laws
- Paid time off (PTO)
- Unemployment insurance
- Government-mandated contributions
With specialists handling compliance processes, you can have peace of mind knowing your business adheres to relevant laws. Partnering with an EOR helps you minimize the risk of errors and noncompliance, which can lead to legal, financial, operational, and reputational damage.
2. Better access to a global talent pool
Finding talent with adequate skills and experience for a temporary position can be challenging, especially given the growing global talent shortage. According to Korn Ferry, around 85 million positions might go unfilled by 2030.
These circumstances lead to increased competition for talent, a mismatch between workers’ skills and business needs, and staff who prefer full-time jobs. Employers might face longer hiring times, higher labor costs, and increased project delays when finding temporary workers.
EOR providers have extensive international networks that allow them to source qualified short-term workers globally. They build connections with workers within the industries they specialize in, offering access to a targeted talent pool with the skill sets you require.
In addition, EOR firms maintain an extensive database of pre-vetted temporary workers with diverse experiences. They can quickly identify suitable candidates based on your specific requirements. Overall, access to a broader pool of qualified short-term staff empowers you to select the best fit for the job, leading to better project outcomes and increased success.
3. Streamlined short-term staff hiring and onboarding
Onboarding temporary workers often involves tedious paperwork, from tax forms to benefits enrollment. EOR services have established efficient recruitment processes, ensuring all steps are completed quickly and accurately.
Providers can conduct necessary background checks or send pertinent employment documents before a temporary worker’s official start date. EOR companies also employ comprehensive onboarding programs complete with:
- Welcome and introduction
- Contract and policy review
- Benefits and policies orientation
- Provision of equipment and access
- Collection of tax information
- Benefit enrollment
- Role-specific training
Many employers of record use online portals or onboarding platforms to speed up the process and allow temporary employees to access and complete necessary documents electronically, reducing paperwork. Reliable vendors can seamlessly integrate these applications into your existing training and HR systems, minimizing delays.
With temporary workers receiving the necessary information and basic training they need quickly, they can become productive sooner.
4. Boosted scalability and cost efficiency
The primary advantage of hiring temporary workers is their flexibility. EOR services empower you to optimize this capability, helping you quickly scale your operations up or down as needed. An EOR can help with the following staffing adjustment situations:
- Surge needs
- Skill gaps
- Project-based staffing
- Seasonal fluctuations
- Team rightsizing
Fast workforce scaling allows you to efficiently assemble the right team for a project, leading to a shorter time to market. It also enables you to quickly adapt to changing market demands and seize new opportunities without worry.
More importantly, unlike hiring employees with fixed salaries and benefits, EOR providers offer flexible pricing models. You typically pay based on the number of temporary workers you need and the duration of their assignment. This approach allows you to optimize costs and pay only for the temporary workforce you hire.
5. Improved worker experience
The employer of record can help you foster a positive work environment for temporary employees by ensuring compliance and streamlining workforce management processes. They uphold workplace safety standards to guarantee fair treatment for short-term hires and protect their rights.
EOR services handle payroll processing for temporary workers, including managing currency exchange rates. They integrate with timekeeping systems to streamline data transfer, as fluctuating schedules can make tracking billed hours challenging.
These measures ensure temporary workers receive their wages promptly and correctly. In fact, according to William Russel, most EOR providers boast 100% accuracy in administering payroll.
Additionally, an EOR acts as a bridge between your company and its hired temporary workers. They facilitate clear communication about the following:
- Expectations
- Project goals
- Pay structure
- Overtime policies
- Pay stubs
- Tax information
- Benefits (if applicable)
- Project updates
EOR firms also offer support services or resources, such as training materials, and assist in resolving work-related issues for short-term employees.
This enhanced experience makes temporary workers feel valued, treated fairly, and supported, boosting morale and productivity. It leads to better outcomes for them and an improved reputation for your company. An employer known for treating short-term hires well attracts and retains a broader talent pool.
Overcoming the challenges in utilizing EOR services for temporary employment
As with any business practice, partnering with an EOR for temporary workforce management comes with hurdles. Fortunately, adequate preparation and integration can easily prevent or resolve potential issues.
Here’s a quick guide to help you overcome the different challenges of leveraging EOR services for short-term employment:
1. Maintaining control with EOR oversight
With an EOR acting as the legal employer for your temporary staff, you delegate a portion of control over workforce management and hiring processes. You might have less visibility and direct oversight when choosing and monitoring workers.
Clear communication is critical. Establish expectations with your EOR regarding the new hire’s performance standards, training requirements, and cultural fit. Monitor your service provider’s progress to find potential issues before they arise.
2. Bridging the cultural divide
Temporary workers, especially international ones, might need help integrating with the existing company culture and permanent employees. This can lead to significant communication issues, reduced collaboration, and a less-than-ideal work experience.
Collaboration is vital to addressing this issue. As mentioned, you should work with your EOR partner to select talent that fits your company’s culture. Plan or encourage team-building activities, mentorship programs, and social events to promote interaction and inclusivity.
3. Addressing knowledge gaps
Leveraging employer of record services for temporary employment can introduce issues in training due to the limited time frame short-term employees have. Knowledge transfer and skill development are challenging, especially since an external party manages these tasks.
Quickly address this hurdle by developing targeted onboarding programs with your EOR, including the following:
- Company culture training
- Introductions to key team members
- Overview of relevant processes and tools
You can also provide access to knowledge-sharing materials, such as user guides, tutorials, or quick references.
4. Fostering a connection with temporary workers
The temporary nature of the work can lead to feelings of disconnection among short-term workers. This can manifest as a lack of motivation and engagement and feelings of isolation from the team.
To avoid this, acknowledge and appreciate the contributions of short-term employees. Even a simple “thank you” can make them feel valued. Consider including them in relevant project meetings and discussions to keep them informed and included.
The bottom line
EOR services can be a strategic tool to maximize a temporary workforce’s operational flexibility.
They can help you access a broader pool of specialized expertise and streamline onboarding processes without compromising regulatory compliance. Additionally, they allow you to scale your short-term workforce quickly, enhance cost efficiency, and improve overall worker experiences.
Do you want to learn more about EOR services? Let’s connect and find a solution that meets your short-term staffing needs.
