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8 Key Steps to Successful Remote Hiring

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8 Key Steps to Successful Remote Hiring

8 Key Steps to Successful Remote Hiring

The shift from traditional office setups to remote work has revolutionised corporate work culture in recent years. Global technological advancements along with the challenges put forward by the pandemic, have accelerated this transition – making remote work not just an attractive alternative but increasingly, a preferred workforce model for many organisations.

 

The market has quickly realised the benefits of remote hiring, and many businesses have been accessing global talents to reduce operational costs whilst offering remote talents the flexibility they value.

 

Furthermore, Markets and Markets establishes in its report that the remote workplace services market is expected to grow from $20.1 billion in 2022 to $58.5 billion by 2027 at a CAGR of 23.8%.

 

However, recruiting and managing remote teams comes with its own set of challenges. This guide will aim to assist you with the essential steps to successful remote hiring.

Table Of Content

8 Key Steps to Successful Remote Hiring

1. Understand Your Hiring Needs

Before initiating remote hiring, it is important to clearly define your needs. Ask yourself the following questions in order to effectively plan your remote workforce strategy.

  • Does your business need full-time employees, contractors, or freelancers?

  • Will remote roles satisfy your business requirements?

  • What roles can be effectively performed remotely?

  • What would be your focal region to build a remote workforce?

2. Spotlight Employer Branding

  • A strong employer brand helps companies stand out by highlighting their values, culture and commitment to employee well-being.
  • Advertise the job postings through your website and social media channels, focusing on growth opportunities and a supportive virtual work environment.
  • Remote employees prioritise organisations that value inclusivity, work-life balance and career growth.

3. Define a clear and attractive job description

Unlike traditional hires, remote roles require specific traits such as self motivation, effective communication and ability to work independently.

 

Clearly defining roles and responsibilities is the key to getting the right talent for your business. The job description must be detailed, outlining the scope of work, responsibilities, skills and qualifications required in addition to the expected outcomes from the role. It should also include information about the work schedule, preferred time zones and any tools or platforms the candidates will be using daily on the job.

 

This will not only help candidates assess whether they are fit for the position but will also smoothen the hiring process by reducing misunderstandings.

4. Choose the Right Recruitment Channels

Choosing the right recruitment channel directly impacts the quality and diversity of candidates you attract. The APAC region is known to utilise various job boards and recruitment platforms tailored for hiring in diverse industries. Industry-specific platforms as well, will assist in finding niche talent. A few popular options include:

  • LinkedIn: Ideal for professional roles.

  • JobStreet and SEEK: Widely used in Southeast Asia and Australia.

  • Upwork and Toptal: Perfect for freelancers and project-based roles.

  • Local Platforms: Consider region-specific platforms such as Zhaopin in China and Naukri.com in India.

5. Smart Screening for Remote Roles

Effective screening and interviewing are important steps to ensure that you select candidates who are not only skilled but well suited for task of working remotely. Additionally, upgrading your hiring process with the latest technology and tools will efficiently strategise your remote hiring process.

 

You can follow the following steps for the same:

 

1. Start with a thorough review of resumes and portfolios to shortlist candidates who meet the technical qualifications and skills.  Application Tracking System (ATS) platforms like Bamboo HR and Workable will help you organise applications efficiently.

 

2. Utilise pre-screening tools like assessments or work samples to evaluate practical skills. Online assessment tools like HackerRank (for developers) or TestGorilla (for general skills) will enable you to evaluate technical and soft skills.

 

3.  Conduct video interviews to assess candidates’ comfort with virtual interactions and ensure they have necessary technical knowledge for required set-ups. You can use Zoom, Microsoft Teams or Google Meet to conduct interviews.  

 

4. Well Structured interview questions and roles – specific scenarios can help assess problem-solving and decision-making abilities.  

 

5.   What to look for in prospective Remote Employees:

  •  Job-specific competencies
  •  Communication skills
  •  Ability to effectively set up remotely
  •  Self-disciplined
  •  Cultural Adaptability

6. Onboarding and Employee Engagement Process

Hiring is successful only when employees are efficiently integrated into the company’s work culture, despite the physical distance. You can do the following tasks to make them feel welcomed and well-informed of Company’s goals and expectations:

  • Virtual Orientation to introduce the new hire to their team and provide an overview of the business.

  • Share digital copies of company policies, training materials, documents defining roles and responsibilities, and login credentials for tools like Slack, Trello, or Asana.

  • Schedule interactive training sessions.

  • Foster employee engagement by assigning buddies or mentors.

  • Set up routine one-on-one meetings during the first few weeks to set expectation and address any concerns.

  • Encourage Transparency by sharing company updates and goals regularly.

  • Celebrate Milestones by acknowledging achievements, celebrating birthdays, anniversaries, or project completions through digital shoutouts or gift cards to boost morale.

  • Cultivate a Remote-Friendly Culture by taking weekly or biweekly sessions to discuss challenges, provide feedback and establish priority goals.

7. Address Security and Data Protection

Distant work might sometimes involve the transfer and sharing of sensitive company data. Protect your business by:

  • Using secure communication platforms.

  • Implementing VPNs and cybersecurity protocols.

  • Signing non-disclosure agreements (NDAs) with remote employees.

  • Updating softwares regularly.

  • Conducting security audits.

8. Verify Compliance and Legal Requirements

Employers must keep themselves well informed of the employment standards, labour laws and tax regulations in the locations where remote employees are based; and prepare their hiring strategy accordingly.  

Taking care of visa requirements, drafting complaint contracts, managing china payroll services compliance with local tax laws, and understanding obligations related to benefits, data privacy, termination policies, intellectual property protection, and anti-discrimination laws are just some of the key compliance tasks you need to attend to, to protect yourself from penalties for non-compliance.

Partner with Galaxy Group - Asia’s leading Business Consulting and EOR Provider

Remote hiring offers unmatched access to global talent, but navigating legal, cultural, and logistical complexities can be daunting. As Asia’s leading business consultant and Employer of Record (EOR) provider, Galaxy helps businesses expand effortlessly.

From business registration and company incorporation services to payroll and EOR services, we ensure that all our customers benefit from our high service delivery standards and a seamless, efficient experience.

Curious about how an EOR can simplify global expansion? Explore our guides:

What is an EOR?

Should You Opt for EOR Services? 5 Key Factors.

Planning for a remote workforce?

Partner with Galaxy to efficiently get your remote team established.

Contact us

FAQ’S

What should be included in a remote job description?

It should clearly specify job roles and responsibilities, required qualifications and skills, working hours, preferred time zones, expectations and technical requirements.

Perform candidate evaluation by using pre-screening tools, online assessment tools to evaluate technical skills, and conduct virtual interviews to assess candidate’s comfort and competence with setting up remotely.

Employers may face challenges such as communication barriers, time zone differences, cultural adaptability and labour law compliance in a new country/region.  

Your Go-To Guide for Indian Employment Laws and Obligations in 2025

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Your Go-To Guide for Indian Employment Laws and Obligations in 2025

Your Go-To Guide for Indian Employment Laws and Obligations in 2025

Planning to start a business in India? Understanding and complying with complex employment and labour regulations can be challenging when it comes to hiring Indian talent.


Entrepreneurs must keep themselves informed of the complex framework of Indian employment and labour laws, in order to present a fair and safe work environment – protecting themselves from unnecessary penalties and fines under India’s Applicable Employment Act.


This blog will provide an idea of how the legal framework of India works, the rights of employees, employers’ obligations and the basic provisions and practices employers in India must follow.

Table Of Content

Legal Framework of Employment and Labour Laws in India

The Indian legal framework has expanded over the years with the enforcement of various Acts addressing social security, equal opportunity and workplace safety; ensuring at the same time a collaborative approach to labour and employment regulation addressing unique needs of states while maintaining national consistency.  

 

Labour and employment laws in India are a central-state subject where both central and state governments have the power to legislate and enforce. There are laws like the Industrial Disputes Act, 1947, Factories Act, 1948 and Minimum Wages Act, 1948 formed by the Central Government.  States have the power to modify them and often draft rules to implement them within their jurisdictions.

 

One can simply log on to https://labour.gov.in/, the official website of the Ministry of Labour and Employment to get an insight into any of the central or state laws.

 

Most recently in 2020, the Indian government consolidated 29 labour laws into 4 labour codes. This was meant to simplify and reform the country’s labour laws and reduce compliance burden – by the merging of  multiple registrations and licenses. However, the same is not yet enforced and awaits implementation.

For now, the existing laws remain in force.

An Overview of Current Employment and Labour Laws in India

Social Security

The Social Security laws ensure employee welfare during and after employment. Employees have the right of access to retirement benefits, health insurance, injury support, gratuity and maternity leave.

Therefore, employers must ensure the following:

  • Access to retirement benefits through the Employees’ Provident Fund (EPF) and pension schemes ensure financial security post-retirement.
  • Provide medical and insurance benefits under the Employees’ State Insurance Act, 1948.
  • Payment of gratuity upon retirement or resignation of employees with 5+ yrs of service under the Payment of Gratuity Act, 1972.
  • Provide maternity leave and benefits as per the Maternity Benefit Act, 1961.

Wages and Payment

Under the laws regulating payment of wages, employees are entitled to receive at least the minimum wage prescribed by state/central authorities under the Minimum Wages Act, 1948 – timely payment of wages without unauthorised deductions under the Payment of Wages Act, 1936 and equal pay for equal work under the Equal Remuneration Act, 1976.

 

Therefore employers must ensure fair and timely payment of wages, issue detailed payslips and maintain proper wage records.

Employment Rules

Employees have the right to an employment contract with clear terms, fair working hours and overtime pay.  

Employers obligations:

  • Contracts: Clearly define terms of employment, including wages, roles and termination conditions.
  • Work Hours: Regulate working hours (max 48 hours per week) or 9 hours per day and provide overtime pay as per the Shops and Establishments Act (state-specific).
  • Leaves: Ensure a minimum of 12 days paid leave annually for full-time employees. For employees who work for over 240 days, a weekly day off is expected, with provision of sick leave and casual leaves that align with state specific regulations.
  • Public Holidays: Provide work holidays on Public and State holidays.
  • Termination: Classify employees as workmen and non-workmen, with differing rules for termination. For “workmen,” employers must follow strict processes, including notice periods and severance pay. Termination of non-workmen should be governed by contract terms adhering to general principles of fairness and natural justice.
  • Apprenticeships: Employers hiring apprentices must comply with training obligations under the Apprentices Act, 1961.
  • Notification of Vacancies: Employers must notify vacancies to government employment exchanges under the Employment Exchanges Act, 1959.

Women and Child Labour

Female employees have the right to maternity leave and protection from workplace harassment under the Maternity Benefit Act, 1961, and Sexual Harassment of Women at Workplace (Prevention, Prohibition, and Redressal) Act, 2013.

 

Employers in this respect are required to implement anti-harassment policies and set up an Internal Complaints Committee for handling grievances.

 

Children under 14 years of age are not employable for hazardous jobs as enforced under the Child and Adolescent Labour (Prohibition and Regulation) Act, 1986

Workplace Safety and Health

The Factories Act, 1948 and other relevant laws entitles employees to have the right to work in safe and hazard-free conditions. Therefore, employers must maintain a safe and healthy working environment, conduct regular health checks and ensure workplace hygiene.

 

Businesses are also required to report accidents and comply with safety norms under the Occupational Safety, Health and Working Conditions Code, 2020.  

Industrial Relations

In India, workers have the right to form trade unions, collectively bargain, strike and seek protection against unfair dismissal.

 

Therefore employers must allow union formations under the Trade Unions Act, 1926, establish mechanisms for resolving disputes including arbitration and adjudication for layoffs, retrenchments or strikes as per the Industrial Disputes Act, 1947 and define clear terms of employment under Industrial Employment (Standing Orders) Act, 1946.

Labour Reforms and Codes

An insight to the four new Labour Codes, expected to be fully implemented in 2025:

  • The Code on Wages, 2019: wage payments, minimum wages and bonuses.
  • The Code on Social Security, 2020: social security benefits like provident funds, gratuity and insurance.
  • The Industrial Relations Code, 2020: dispute resolution, strikes and collective bargaining.
  • The Occupational Safety, Health and Working Conditions Code, 2020: workplace safety, health standards and working conditions.

Compliance Challenges for International Businesses

Indian employment regulations often vary between states, requiring local compliance strategies. Businesses must stay updated with frequent amendments and notifications. Understanding cultural expectations around job security, hierarchical structures and work-life balance is key to successful compliance and employee engagement.

How Can We Help?

Galaxy Payroll Group has 20 years of Payroll and EOR service experience and partnering with us will help reduce your burden of trying to understand and comply with India’s complex legal framework. We will hire and manage employees for you to also reduce your administrative load while you focus on more important tasks.

Ready to Expand to APAC with Ease?

 Partner with us to navigate APAC’s laws and build a compliant workforce.

Get Started

FAQ’S

1. What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party service provider that manages employment responsibilities for your company, including payroll, compliance and other HR functions. It ensures that businesses adhere to local labour laws without having to directly employ the workers.

Employers must comply with regulations related to employment contracts, work hours, overtime, workplace safety, anti-discrimination policies and employee benefits like paid leave and retirement schemes. It is also very important to stay updated with state-specific regulations as well.

In India, employment contracts can be permanent, fixed-term, or temporary (probationary). These contracts outline job responsibilities, benefits and terms of employment – ensuring clarity for both the employer and employee.

Maternity leave in India is 26 weeks for women who have worked for at least 80 days in the previous year, and 12 weeks of leave for adoptive mothers. This is considered paid leave and is a crucial part of employee welfare.

The EPF is a retirement savings scheme where employers contribute a portion of the employee’s salary (usually 12%) to a fund. The employee can access the accumulated amount at retirement or resignation.

The HR Playbook for 2025: Trends, Challenges, and a Checklist for Employers

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The HR Playbook for 2025 : Trends, Challenges, and a Checklist for Employers

the hr playbook for 2025

The HR landscape is changing profoundly the closer we get to 2025. The workplace is not only being shaped by economic forces, the introduction of AI, and the changing of employee expectations, but it is also changing how organisations operate. These changes prompt HR leaders to develop innovative strategies that foster an organisation’s resilience, adaptability and growth.

This article uncovers the main HR trends of 2025 together with forward-looking insights and practical ideas to help organisations keep the edge. Moreover, this employers’ checklist will help guide and align HR priorities for success in the upcoming year.

Let’s see how we can use an HR management system to drive the future of work and help organisations flourish!

Table Of Content

Trends to follow in HR

The Integration of AI in HR Practices

AI is currently the new leader in the HR domain, and we are experiencing game-changing developments that result in innovative and efficient operations in many respects. For one, AI-powered human resource management (HRM) systems make it feasible for HR leaders to perform multiple tasks, including but not limited to payroll processing, performance tracking and project management – leading to exponential growth in business efficiency. 

In hiring, AI is changing the face of acquisition by automating the process of resume screening, candidate assessments, and utilisation of natural language processing technology for interviews. Apart from this, AI is also improving functions for picture documentation and employee onboarding – which are also becoming digital and data-driven. Another development on the horizon is the people analytics of AI, which helps make the decision-making process more novel.

When it comes to analysing workforce data, these AI tools assist HR teams in figuring out what needs to be improved in performance, employee development, and retention by offering helpful tips about which choices are the best to make in international HR services. Within the framework of such technological innovation, AI will continue to be a major player in the HR domain. It will be through the journey of innovation for future workplaces where AI will play a vital role in energising areas such as productivity, scale operations, and employee management.

The Prioritisation of Employee Wellbeing

In 2025, Employee well-being is forecasted to shift more from a “nice-to-have” to a central business priority. With increasing stressors like job insecurity, burnout, and rapid technological changes, 70% of HR leaders recognise economic instability as a major threat to wellbeing, yet investment in financial wellness programs remains limited.

Companies are merging programs designed for the physical, mental, and financial health, to address these challenges. The need for mental health days, telemedicine and wellness apps is growing in importance – to combat burnout and to raise the morale of employees.

The first bullet of Heka’s 2025 wellbeing trends depict that employees are continuously ranking benefits that have a direct impact on their health – First; this expresses that enterprises that are implementing holistic well-being strategies can successfully increase the satisfaction and loyalty of their workforce. Consequently, employers can look to increase employees’ morale and well-being through the promotion of work-life balance and the provision of mental health resources.

The Rise of Skills-Based Hiring and Employee Development

To address talent shortages, many organisations are embracing a skills-based hiring approach, focusing on skills and potential rather than solely on experience or formal education. Research shows that 90% of companies adopting this method report fewer mis-hires, and 94% find it more predictive for on-the-job success. This trend is shifting the focus from credentials to practical experience and transferable skills.

 

Simultaneously,  upskilling and reskilling have become the important roads that lead to a successful future. Businesses have been engaging themselves in training, mentorship and development programs, not only to build stronger teams but also a means for talent retention. HR leaders are rephrasing job descriptions, eliminating the unnecessary degree requirements and adopting agile learning methods such as microlearning. By keeping employees on a continuous learning journey and providing opportunities for development, many businesses have reported positive outcomes amidst a volatile job market.

The Rise of Hybrid Work 2.0 and Geographically Dispersed Teams

As hybrid work continues to evolve in 2025, organisations will focus on creating equitable experiences for remote and in-office employees. Leveraging advanced collaboration tools, HR management systems, and virtual reality (VR) tools for discussions and team-building will help redefine work dynamics – ensuring employees feel equally engaged and valued.

The rise of remote work has expanded talent access beyond traditional geographic boundaries. From February 2020 to June 2023, the global remote workforce grew from 23% to 31%. This shift offers enhanced worker-job matching, improved work-life balance, and reduced staff turnover. Employers who embrace flexibility, remote work options, skills-based hiring, and offer pay transparency will likely be better-positioned to attract better talent as the human resource landscape evolves.

At Galaxy, we understand the importance of seamless integration between remote and in-office teams. Our PEO (Professional Employer Organisation) and EOR (Employer of Record) services help organisations navigate the many complexities of remote workforce management. By partnering with Galaxy, businesses can hire top global talent whilst ensuring compliance is met and payroll outsourcing and benefits are managed for various jurisdictions.

The Evolution of Diversity, Equity, and Inclusion (DEI)

In 2024, the focus on Diversity, Equity, and Inclusion (DEI) continues to be critical for organisations, but the approach is evolving. While companies still recognise the importance of diverse and inclusive workplaces, recent challenges, such as high DEI professional turnover and legal rulings, have prompted a reassessment of strategies. A 2022 study found that DEI roles had a 33% attrition rate compared to 21% for other positions, highlighting the need for more rock-solid approaches.

DEI initiatives will no longer be treated as standalone efforts but will be integrated into core business practices and leadership strategies. By focusing on long-term behavioural changes rather than one-off training sessions, companies will prioritise building inclusive cultures within the business.

Furthermore, measuring DEI effectiveness through data and outcomes will become more and more central, emphasising factors such as promotion rates, retention, and team dynamics. Organisations will also focus on eliminating biases in hiring and pay equity, using analytics to track and improve DEI progress.

Upcoming Common Challenges and Solutions for Employers

  • Building a Resilient Workforce

Solution: Focus on adaptability through cross-functional training, continuous learning, and empowering employees with ownership of their development.

 

  • Leveraging Technology for Productivity

Solution: Invest in integrated HR tools for seamless workflow management. Prioritise data privacy and ensure smooth adoption with proper employee training.

 

  • Fostering a Culture of Well-being

Solution: Go beyond basic wellness programs. Offer tailored benefits addressing physical, mental and financial health while promoting work-life balance.

 

  • Reinforcing Leadership Development

Solution: Focus on leadership training in emotional intelligence and resilience. Provide coaching and mentorship to develop strong leaders for all levels.

 

  • Strengthening Employer Branding

Solution: Build an authentic employer brand through transparency, showcasing values and employee success stories across platforms.

Checklist for employers in 2025

To help you stay ahead, here’s a quick checklist to guide your HR strategy:

  1. Employee Experience:
    • Conduct regular employee feedback surveys.
    • Personalise career development plans.
    • Offer flexible work arrangements.
  2. Hybrid Work:
    • Audit and improve collaboration tools.
    • Ensure parity between remote and in-office experiences.
    • Redesign office spaces to support hybrid teams.
  3. Upskilling and Learning:
    • Identify future needs for new skills through workforce analytics.
    • Partner with learning platforms to offer relevant courses.
    • Use a human resource management system to track training progress.
  4. AI and Automation:
    • Evaluate current HR tech stack for AI capabilities.
    • Train HR teams to use AI tools ethically.
    • Leverage AI for personalised employee engagement.
  5. DEIB:
    • Set measurable DEIB goals and track progress.
    • Conduct regular training on unconscious bias and inclusion.
    • Celebrate diversity through events and initiatives.
  6. Payroll Management:
    • Consider payroll outsourcing to reduce administrative burdens.
    • Ensure compliance with local and international payroll regulations.
    • Use an integrated HR payroll solution for seamless operations.
  7. Well-being and Sustainability:
    • Offer wellness stipends or reimbursements.
    • Embed sustainability into workplace policies.
    • Encourage employee participation in CSR activities.

Conclusion

As we move toward 2025, it is clear that the interplay of technology, employee well-being and inclusive workplace practices will define the HR landscape. Businesses must embrace these shifts to remain competitive and foster growth. At Galaxy Payroll Group, we understand the complexities of modern HR management systems and are dedicated to empowering organisations with innovative, practical HR solutions.

Our international hr services go beyond checklists – we partner with you to build resilient, future-ready teams and help navigate the challenges of a dynamic workforce. With our expert guidance in EOR, PEO, payroll outsourcing and business advisory services, you can confidently steer your organisation toward success. Let’s future-proof your workforce together!

Stay ahead of your competitors and trends

Our team of experts will deploy the best HR services to keep you ahead of the game

Contact now!

FAQ’S

1. What are the top HR trends for 2025?

Key trends include AI integration, skills-based hiring, hybrid work evolution, employee wellbeing prioritisation, and advancements in DEI practices.

Invest in collaboration tools, redesign office spaces, and ensure parity between remote and in-office experiences.

It addresses talent shortages, focuses on practical needful skills, and improves employee retention and on-the-job success rates.

PEO vs EOR: A Comparative Guide for Global HR Solutions

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PEO vs EOR : A Comparative Guide for Global HR Solutions

PEO vs EOR A Comparative Guide for Global HR Solutions

PEO vs EOR: A Comparative Guide for Global HR Solutions

The prompt and unified world economy today presents varied options for businesses to accelerate across continents and resort to different services to simplify their administrative processes.

 

Hiring and managing the international workforce is one of the biggest challenges businesses encounter during expansion. It involves compliance with state or country-specific laws and regulations, handling payroll, onboarding and managing the workforce, termination, paying taxes, etc. Therefore, to save time and cost, organisations resort to HR outsourcing solutions like Professional Employer Organization (PEO) and Employer of Record (EOR).

 

Both PEO and EOR have gained substantial traction across the global business landscape. As indicated by Straits Research – the global PEO market size was valued at USD 66.23 billion in 2024 and is expected to reach USD 152.14 billion by 2033. It is also expected to grow at a CAGR of 12.3% during the forecasted period (2022 to 2033) in the APAC region. (Read more….)

 

Countries like Thailand, Indonesia and China have seen increased adoption of EOR services due to their complex labour laws.

Although PEOs and EORs differ in terms of operations and both cater to different specific needs, they are nevertheless advantageous in simplifying business operations. However, employers might get confused about which one to opt for.

 

This article details the functional similarities, key differences, and various considerations when choosing a PEO or EOR which best aligns with your talent needs.

Table Of Content

Parallel Functions of a PEO and an EOR

PEOs and EORs generally perform parallel functions because both help businesses manage employment and HR-related tasks. Let’s have a look at the similar functions performed by them:

 

Ø  Payroll and Tax Filing: Manages payroll, salary calculations, tax deductions, and disbursements also ensures compliance with local tax regulations.

 

Ø  HR Administration: Facilitates hiring, visas & work permits, onboarding, performance management, termination, policy enforcement, etc.

 

Ø  HR Compliance: ensures compliance with local labour laws and tax regulations.

 

Ø  Employee Benefits Administration: offer and manage benefits like health insurance, retirement plans, and other perks.

 

Ø  Risk Mitigation: Minimises risks associated with employment, such as wrongful termination or workplace disputes.

Key Differences between a PEO and an EOR

Even though PEO and EOR service providers help employers, they also possess functional differences where their roles and legal responsibilities significantly differ. Let’s find out the key differences between them in these areas:

1. Definitions

PEO: A PEO is an outsourced partner of a business entity hired to co-employ and manage the workforce and provide other HR support services.

 

EOR: EOR is a third party service provider who takes charge with the legal responsibilities around employment related services, in a specified country. This arrangement allows businesses to hire workers in countries where they don’t have a legal entity.

 

2. Legal Employer and Employment Contracts

An EOR acts as an official legal employer of the employees. It hires employees on behalf of the parent employer (the client) and as the legal employer, the EOR signs the employment contracts directly with the employees. In this manner, the EOR assumes full legal responsibility and must be compliant of local labour laws and employment regulations.

PEOs on the other hand, operate as co-employers. The Client Company retains the legal employer status and signs the employment contracts with the employees. While the PEO manages the HR functions under a co-employment agreement. It shares the legal responsibility of the employees with the Client Company.

3. Accountability

It is the sole responsibility of the Employer of Record to ensure compliance with state-specific labour laws, tax regulations, and other statutory requirements. Therefore, it is fully accountable for employment risks like wrongful termination, misclassification, and non-compliance of local labour laws.

The PEO cannot be held fully liable for any risk or wrongful act of the Client Company as it only facilitates compliance and reduces administrative burdens; significant liability thus remains with the Client Company.

4.  Scope of Hiring

EORs are particularly useful for companies looking to hire international employees. The EOR enables their customers to expand easily to new countries without having to establish a legal entity, thus allowing them needful bandwidth for core operations.

PEOs generally operate within the same country or region and support businesses in hiring and managing the workforce.

5. Payments to Employees

Being an official legal employer, an EOR ensures direct payment to employees in the local currencies. Unlike EOR, a PEO might not be authorised to pay the employee directly and payments still have to be transferred through the Client Company’s account.  

Here is a quick snapshot of the differences between a PEO and an EOR:

Aspect PEO EOR
Definition Co-employer managing HR functions. Legal employer for workforce in a country.
Legal Employer Company retains legal employer status. EOR is the legal employer.
Accountability Shared compliance, liability on the Client Company. Full compliance and liability on the EOR.
Scope Domestic hiring support. International hiring, without need for an entity.
Payments Facilitates payments via the Client Company. Direct payments to the employee, in local currencies.

Why Would Businesses in APAC Need PEO and EOR Services?

Well known as a region of dynamic economies, grouping of diverse & complex labour laws, and compelling talent pools, the Asia Pacific region delivers unique opportunities (and challenges) for businesses. Countries like China, Japan, Thailand and Indonesia have distinct regulations and economic conditions that require customised HR solutions.

Choosing Between a PEO and an EOR

Businesses must analyse their need for international expansion, legal compliance and operational control to make an appropriate decision.

 

Co-employ a PEO if:

  • You have an established business or entity in the target country.
  • You need HR support while retaining control over your workforce.
  • Your aim to enhance operational efficiency, employee satisfaction and reduce administrative burden.

Partner with an EOR if:

  • You aim for international expansion and want to hire employees in a different country without setting up a legal entity there.
  • You aim to probe before making a long-term investment.
  • You wish to remain focused on the core operations of your business.

Conclusion

Small or big, every business faces challenges in workforce expansion and management. PEOs and EORs have distinct advantages for businesses finding employment solutions.

 

A PEO is ideal for domestic businesses looking to enhance their HR operations while maintaining control over their workers. On the other hand, an EOR is perfect for quick market entry, where businesses want to hire employees without going through the hassle of setting up a legal entity.

 

The scope of operations and the level of control a company wishes to retain over their workforce must align well with the service they decide to choose. By understanding the distinctive features of EOR and PEO, the customer can make a better informed decision.

 

Partner with Galaxy and experience our best-of-class customer service coupled with deep local knowledge around Human Resource and corporate services across the Asia Pacific region. 

 

Check out this post on How to Hire International Employees : A Comprehensive Guide

Need PEO or EOR Services?

Galaxy is your Ideal Partner for Both Services!

Reach Out To Us Today!

FAQ’S

1.Can a PEO help in hiring in multiple countries?

PEOs are ideal for businesses already operating in a country and want to outsource their HR management operations. Some PEOs might offer services across different countries and facilitate international hiring.

A PEO offers the Client Company more control over their employees in respects to hiring, termination and legalities. With an EOR, the client company has substantial control over their employees but the EOR has the ultimate responsibility to execute the legal aspects relating to hiring, termination and local law compliance.  

The EOR solution provides access to overseas talent and compliance security in a foreign country where the Client Company does not have practical reach. The EOR thus takes full legal responsibility for all related employment, taxes and payroll. This is a popular solution with businesses who want to gain quick entry into a foreign market and overseas workforce. The PEO on the other hand offers more of a HR outsourcing support service when managing a domestic in-country workforce.

Should You Opt for EOR Services? Here are 5 Key Factors to Consider

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Should You Opt for EOR Services? Here are 5 Key Factors to Consider

Should You Opt for EOR Services Here are 5 Key Factors to Consider

In an increasingly interconnected world, businesses are expanding across borders to take advantage of potential markets and explore new talents. However, managing an international workforce comes with regulatory and administrative challenges, especially for businesses with limited access to or knowledge about new territories. This is where an Employer of Record (EOR) services plays a pivotal role.

Engaging an EOR not only simplifies global hiring but also removes the operational burden of managing employment compliance, payroll, and legal formalities in foreign countries.

However, finding a perfect EOR can be challenging and has certain limitations.

So, let’s explore core reasons why you should be engaging an employer of record and the disadvantages they come with.

Table Of Content

5 Core Reasons Why You Should be Engaging an Employer of Record (EOR)?

Partnering with an EOR simplifies business processes, especially for international hiring. Let’s explore how engaging an EOR can advance business growth and efficiency.

1. Acceleration of Global Expansion Plans

An EOR allows businesses to expand into new markets without the need to establish a legal entity, shouldering the administrative and employment compliance burden.  This initiative helps boost business outreach plans, enabling companies to channel their energies in other required areas.

 

2. Ease of Handling Legal Markets

Handling labour laws can be challenging due to significant variations in regulatory frameworks between countries. For example, France has strict labour laws mandating minimum severance pay and employee benefits, while Singapore offers more flexibility in employment contracts. An EOR ensures compliance with such local regulations as well as tax regulations, payroll processing, benefits administration, etc. allowing businesses to operate legally without establishing a physical presence and minimising the risk of legal issues for the company.

3. Facilitates Hiring:

(a) In No Time

With expertise in global hiring, EOR makes international staffing quick and easy through its connectivity network and simplified processes, which otherwise would be stringent and lengthy for any foreign company. For instance, in countries like Brazil, where obtaining a work permit can be a lengthy process, an EOR can simplify and expedite the onboarding of employees through an expert network of local partners. This ensures businesses secure skilled professionals, giving them a competitive edge in fast-paced markets.

(b) In Budget

Employers of Record (EORs) open access to global talent pools, allowing businesses to recruit skilled workers at competitive salaries. This is particularly advantageous for startups and SMEs aiming to maximise their hiring budgets.

 

(c) Equitably

By standardising payroll, benefits, and HR processes across borders, an EOR ensures that employees in different countries, such as India and Japan, enjoy equitable treatment despite varying local laws. This consistency enhances satisfaction and loyalty among global teams.

 

(d) Synergy

EOR aims to ensure that employees have a smooth, consistent, and positive experience across all stages of their employment, creating a stronger connection between the employee and the organisation. EORs employ tested and proven technologies or processes to effectively bring these different touchpoints together.

 

(e) Mobility

Relocating employees can be challenging, especially in countries with stringent visa requirements like the United States. An EOR takes charge of work permits and immigration paperwork, simplifying the process for businesses and employees.

 

4. Cost Efficiency and Reduced Administrative Burden

Establishing a subsidiary in countries like Switzerland, known for its stringent regulatory frameworks, can be costly and time-intensive. An EOR provides a cost-effective alternative, allowing businesses to explore new markets without the heavy financial and operational commitments of setting up a local entity.

Moreover, EORs significantly reduce administrative burdens by managing essential tasks such as payroll processing, employment and regulatory compliance, benefits administration, and tax filings. 

5. Avoids Employee Misclassification

Misclassifying employees as independent contractors can lead to fines and penalties in countries like Australia, France and Japan. An EOR eliminates this risk by ensuring correct classification under local laws. The EOR structures agreements for contractors to align with independent contractor laws, avoiding practices that could reclassify them as employees, such as controlling their work schedules and providing benefits.

In an increasingly interconnected world, businesses are expanding across borders to exploit potential markets and explore a wider pool of skilled workers. However, the regulatory and administrative complexities of managing a workforce in foreign countries can be challenging for those needing more access to and knowledge about new territories. This is where an Employer of Record (EOR) plays a significant role.

The Cons of Hiring an EOR

Having an Employer of Record (EOR) with you has numerous benefits, but at the same time, one might face certain limitations. So, let’s dive into possible disadvantages associated with hiring an EOR: 

1. Lack of Control

Since the EOR becomes the legal employer, businesses might lack direct control over employment-related decisions. Heavy reliance on a third-party service provider also carries inherent risks if the EOR underperforms or fails to meet its obligations.

 

2. Complexity in Large-Scale Operations

Managing a workforce through an EOR across multiple countries, such as India, Australia and the UK, can create operational complexities. Ensuring consistency in employee policies and practices may become challenging as the scale grows if the EOR is not competent enough to manage large-scale international engagements. Choosing a competent EOR for international employee engagements is critical for success.

3. Employee Perception Issues

Employees may perceive the EOR as a barrier between them and the Company. In countries like Germany, where employment stability is highly valued, such perceptions could impact morale and loyalty. It is thus important that an adequate EOR equipped with best-of-class employee interaction practices is chosen for the undertaking.

4. Data Protection and Legal Disputes

Sharing sensitive employee data with a third party can raise concerns about privacy and protection. Additionally, disputes between the EOR and the company may lead to legal complications. These areas must be clearly stated and agreed upon in the Master Services Agreement to ensure that such lapses do not occur.

Conclusion

Although an EOR can extremely benefit businesses, companies might have to face certain hiring limitations. Therefore, before partnering, one must conduct rigorous due diligence and enquiry about the EOR to find the suitable one that can understand and satisfy the Company’s expectations.

 

Businesses should evaluate their operational needs, workforce size, and long-term goals. Tailoring the partnership to align with these factors can help maximise the benefits while minimising the risks. For companies eager to explore global markets, an EOR offers a flexible and cost-effective solution to handle the complexities of international employment.

 

Make Galaxy Payroll Group your trusted partner for global expansion offering world class HR excellence and corporate solutions across the Asia Pacific region today! 

Searching for a suitable EOR for your business?

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FAQ’S

1. Why should I engage an EOR?

One should engage an EOR to energise business expansion plans. By transferring the administrative burden of employment compliance in a foreign country, you will be able to focus on the core business operations.

Yes, underperformance by an EOR is a potential risk. Do ensure that the provider has a presence in the target country, deep knowledge of local employment nuance, expertise in managing an international workforce, and service offerings aligned with your business needs. 

The right EOR (employer of record)  must have good experience in hiring and managing employees as well as expertise in labour law compliances. It’s service and cost offerings must match your budget and business needs.

What is an Employer of Record: A Complete Guide to Simplified International Hiring

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What is an Employer of Record: A Complete Guide to Simplified International Hiring

What-is-an-Employer-of-Record-A-Complete-Guide-to-Simplified-International-Hiring

Every business today shows comparatively high growth after stepping out of its boundaries. However, business owners remain so much involved in the core business operations that even after realizing the need for business expansion, they find it challenging to devote time and resources to researching and understanding the complexities of setting up a new legal entity in a new area or a different country altogether about which they have limited knowledge.

 

This is where Employer of Record (EOR) services offer a solution, helping employers manage their global hiring needs while remaining focused on their core business.

Still, ‘EOR’ sounds new to you?! Let us discover what an EOR is all about. 

Table Of Content

What is an EOR?

Fully known as “Employer of Record,” EOR offers proficient and customized employment management services. It takes charge and legal responsibility for global hiring like hiring workers locally or internationally on behalf of the employer, handling its payroll management , taxes, benefits, banking, insurance, contracts, and compliance with local labour laws and regulations of a specified region. 

 

Since the EOR is responsible for issuing employment contracts, paying salaries, remitting taxes, and providing statutory benefits like health insurance and pensions, regulatory authorities officially recognize the EOR as the employer of the workers. Even though the EOR works under the direction of another parent organization, it acts as the registered employer for legal, tax, and compliance purposes. It is, therefore, called the employer of record.

 

While this sounds so simple, EOR involves overlapping processes. It is not about just hiring employees and their payroll; it’s a much wider term, which you will learn about in this overview. 

What are the core functions of an Employer of Record (EOR)?

1. Setting up a new location

Where a company wishes to expand its business operations on foreign land, the employer of record (EOR) facilitates the parent company in establishing a functional presence there without setting up a new legal entity. EOR services hire local talent on the client’s behalf to determine the new location’s purpose. EOR services ensure that the company can expand without the complex process of business incorporation in the target country. EOR, if needed, can also facilitate the physical presence of the client company in the target country and be used for operational and branding purposes.  

2. Visas and Work Permits

Employer of record (EOR) takes care of all the immigration mandates and assists employees in getting work permits, visas, etc. if and when required.

3. Employment Compliance

An  Employer of Record (EOR) takes charge of employment requirements per the existing laws of a specific jurisdiction, minimizing the risks of fines, penalties, and lawsuits. For example, the Employer of record (EOR) ensures that the terms of the employment contracts, such as salary, working hours, benefits, termination, etc., comply with local laws. Additionally, the EOR manages payroll management, ensuring all statutory benefits like health insurance, pensions, and leave entitlements are in place.

4. Employment Contracts

It is the Employer of Record (EOR)’s responsibility to not only draft the employment contracts as per the parent employer’s requirements, and adhere to all applicable local laws, but also get them executed, take care of renewals, if any, and terminate or close thereof.

5. Payroll Management 

Employer of record (EOR) reduces administrative burdens by calculating employee payments and ensuring timely payment in local currencies. This includes calculating deductions, gross and net salaries, taxes, contributions to social security schemes like family allowances, retirement, and pensions, payment of overtime and bonuses, filing annual tax documents of employees, and calculating unused leaves and owed wages for final paychecks at the time of termination. In addition, payroll outsourcing through an EOR ensures accuracy and timeliness, keeping both employees and employers compliant.

6. Statutory Benefits

Employer of record (EOR) takes care of statutory benefits for the employees, such as healthcare, pensions, insurance, leave entitlements, etc.

7. Medical Check-Ups

Employer of record (EOR) ensures that the occupational medical checkups are done in accordance with local laws and regulations especially in areas like construction and manufacturing where health and safety of employees is a big concern.

8. Termination and Offboarding

EOR takes full responsibility for an employee until the end of the service contract or termination. It ensures that all termination protocols under the local laws are complied with, handles their final settlement clearance, and facilitates offboarding thereof.

9. Reporting and Record Maintenance

EOR keeps track of timelines for filing various statutory records and documents required under local laws and reports the same to the employees and the client company. It also regularly informs the client about employee management activities and compliance-related activities so that the client stays informed about the workforce while operating in different countries. It maintains the record of the entire employee management and compliance under its control.

Since the EOR is responsible for issuing employment contracts, paying salaries, remitting taxes, and providing statutory benefits like health insurance and pensions, regulatory authorities officially recognize the EOR as the employer of the workers. Even though the EOR works under the direction of another parent organization, it acts as the registered employer for legal, tax, and compliance purposes. It is, therefore, called the employer of record.

While this sounds so simple, EOR involves overlapping processes. It is not about just hiring employees and their payroll; it’s a much wider term, which you will learn about in this overview. 

What is the Role of an EOR?

  • Compliance Requirements : Compliance challenges vary across countries due to diverse labor laws and tax systems. EOR services specialize in handling these challenges worldwide, offering solutions for business expansion.
  • Bridge between the client company and employees : The EOR acts as an intermediary, managing the legal and administrative aspects of employment on behalf of the client.
  • Communication and Coordination: It is a key liaison between the parent employer and local government authorities. EOR handles the intricacies of global hiring while ensuring the company stays compliant with local regulations.
  • Customization: EOR services provide customized employment-related solutions as per the employer's specific needs.
  • Risk Mitigation: The EOR reduces risks associated with non-compliance, avoiding penalties, fines, and potential employment-related disputes.
  • Advisory: EOR services often provide valuable advice on local business practices, tax laws, and labor regulations, helping the parent company navigate new territories efficiently.

What does a comparative analysis of EOR globally involve?

While the role of an EOR is similar worldwide, its services and methods vary from place to place due to regional variations in labor laws, tax systems, and employment regulations. For instance, Australia’s Fair Work Act focuses on maximum working hours, minimum wages, leave entitlements, etc. Conversely, in India, there are complex labor laws related to mandatory gratuity payments, contributions to the Provident Funds, and Employees’ State Insurance.

Therefore, EOR’s approach to handling tasks in both these countries will be entirely different due to variations in the legal framework and cultural expectations.  Hence, EOR services are globally adaptable and can help with international expansion without the need for business incorporation services in every country.  

Key Benefits of Hiring an Employer of record (EOR)

  • Acceleration of global expansion and global hiring plans
  • No need to set up multiple legal entities to employ global workers
  • No need to access local experts on tax laws and regulations
  • Fast onboarding of the international workforce
  • Less paperwork

Who should hire an Employer of Record (EOR)?

One who:

  • Needs to employ international workers for its business
  • Doesn’t want to set up a new legal local entity in the expansion area
  • Lack expertise in international tax and employment law in the expansion area
  • Want to focus on the core business of the Company and doesn’t want to devote much time to business expansion
  • Whose existing employees generally relocate
  • Needs peace of mind to protect IP globally

Conclusion

So, for those looking for employment solutions, especially in the international market, EOR services are the perfect solution. It will not only ease the hiring process for you but also save you time that would otherwise be spent in understanding the work environment of the target location for expansion and local labor laws. You will be free from the burden of setting up a legal entity in a new country, thereby making the expansion quick and cost-effective. Outsourcing payroll to an EOR further ensures you maintain focus on your core business while they handle the complexities of hiring and employment management for you.

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FAQ’S

1. How is Employer of record (EOR) different from the HR department of a Company?

EOR acts as a legal employer for hirers of the Company in a specified country but the HR department manages employees directly, legal responsibility lies with the Company itself. EOR specializes in international hiring while the HR department focuses on internal processes such as recruitment, payroll, etc. and may lack expertise in foreign legal systems.

 A PEO is a professional employer organization generally outsourced for undertaking the Human Resource responsibility of a Company, a process referred to as co-employment. It does not establish a separate legal entity like an EOR.

Setting up a legal entity can be time-consuming, costly, and risky for someone who has limited knowledge about the legal and business practices of a country in which business expansion is sought. So hiring EOR services can save you time and money while ensuring compliance with local laws and regulations.