An Employer of Record (EOR) is a third-party organisation that serves as the legal employer for your staff in countries where your company does not have a registered legal entity.
While the EOR takes on the legal and administrative “heavy lifting” handling payroll, taxes, benefits, and local employment law and compliance, the client retains full control over the employee’s day-to-day work, tasks, and performance management. Essentially, it allows you to hire anyone, anywhere, without the logistical problems of setting up a foreign legal entity.
Why Do Businesses Use EOR Services?
In an increasingly globalised economy, companies use EOR services to gain a competitive edge in several key ways.
- Speed to Market: Setting up a local entity can take months of legal processes and bank setups. An EOR allows you to hire and onboard talent in a new country extremely quickly.
- Cost Efficiency: It eliminates the massive upfront costs of legal fees, office space, and specialised in-house HR teams for every territory.
- Risk Mitigation: Employment laws vary wildly by country. The EOR assumes the legal liability for compliance, ensuring that contracts, tax withholdings, and termination procedures follow local regulations strictly.
- Access to Global Talent: Businesses are no longer restricted by geography. They can hire the best engineers, sales reps, or creatives wherever they live, offering them a professional and compliant local employment experience.
- Testing New Markets: It provides a “low risk” way to trial operations in a new region. If the market proves successful, you can later transition to a local entity. If not, offboarding is simple and compliant.
While many providers offer these basic functions, the quality of the experience for both the company and the worker can vary significantly. Compounding this, is the fact that the limiting factor for global projects often isn’t only administration and compliance but also in landing the right talent to deliver the project in the first place.
A “hidden” cost of EOR services can be measured through the services they don’t offer, in potential hiring delays, attrition through the lack of support and extended skills gaps through bad personnel decisions. This is what led Penta Consulting to offer its Managed Resource service, addressing the shortcomings in typical EOR services whilst maintaining the great benefits.
Penta Consulting offers a more comprehensive, personalised, and cost-effective model compared to a typical Employer of Record (EOR) platform provider. The following comparison highlights how Penta Consulting moves beyond the “typical” automated EOR model to provide a more tailored, specialist-led service.
1. Superior Benefit and Support Packages
While basic EOR platforms provide generic payroll and support, Penta Consulting includes several high-value benefits that these services often lack.
For example, Penta Consulting can offer international health insurance and custom benefits packages including tailored medical, life insurance pension schemes and additional leave allowances.
Crucially, Penta can also offer complementary services to identify talent or backfill workers who have either resigned or been terminated, ensuring business continuity. Penta Consulting is a leading provider of professional services and managed solutions to many of the world’s largest technology organisations.
2. Transparent and Cost-Effective Pricing
Penta Consulting eliminates many of the hidden or additional fees associated with typical EOR providers.
There are no Expense or Commission Markups. Penta charges 0% on expenses, bonuses, and commissions, whereas typical EORs often add a percentage. There are also no additional costs to start or end a contract, whereas you’d normally expect to pay an onboarding / offboarding fee.
Typical EORs also often require significant upfront deposits, Penta Consulting does not have this requirement, improving client cash flow.
3. Highly Personalised Service
Penta Consulting solves the same problem from a people-first vs a software-first perspective as we believe this results in a superior service.
Clients receive designated internal Penta contacts, rather than a generic support ticket system. We also provide a personalised onboarding process for every worker.
Penta provides round-the-clock access to specialists who can advise on local legislation and labour laws globally as required.
4. Greater Flexibility and Client Alignment
Penta Consulting adheres to client’s specific payment terms, whereas typical EORs often enforce their own strict billing cycles. Penta Consulting also prides itself on offering workers an industry-leading level of support to ensure any issues are resolved quickly and regardless of time zone.
Penta Consulting Managed Resource differentiates itself by offering a white-glove service that combines the global reach of a typical EOR with the bespoke support, financial transparency, and expert consultancy of a specialised partner.
The ability to combine industry-leading talent ID with the services expected of a typical EOR provider offer both cost and efficiency benefits.
Penta finds the needle, whilst EOR services simply organise the haystack.
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