Author name: procloz

As businesses venture into the global market, they often encounter a maze of employment laws, regulations, and tax systems across various countries. This is where the Employer of Record (EOR) steps in, cutting through the complexity of international hiring and giving companies seamless access to global talent. Curious about what an EOR actually is and how it works? Let’s break it down and dive into this game-changing solution for workforce management.

What is an Employer of Record?

An Employer of Record (EOR) is a third-party service that officially employs a company’s international workforce. By handling everything from onboarding and payroll to ensuring compliance with local labor laws, the EOR takes the legal and administrative load off the client’s shoulders—so the business can focus on what really matters: its core operations.

Demand for Global Talent

According to a report by Valuates, the global Employer of Record (EOR) Platform market was valued at US $4.45 billion in 2022 and is projected to reach US $6.6 billion by 2029, exhibiting a compound annual growth rate (CAGR) of 6.8% during the forecast period of 2023-2029.

Considering the economic impact of the COVID-19 pandemic, the Aggregator Model accounted for 67.55% of the global EOR market in 2021 and is expected to be worth US $4.62 billion by 2028, growing at a revised CAGR of 7.31% in the post-pandemic period (2022-2028). EOR customers include small and medium-sized enterprises (SMEs) and large enterprises. SMEs accounted for 69.75% of the market share in terms of revenue in 2021.

The growing appeal of the Employer of Record (EOR) market is fueled by several factors: the ease of expanding into international markets, reduced HR costs, no need for local incorporation, support with immigration compliance, guaranteed adherence to local laws, and freedom from additional payroll tax burdens. All of these advantages are expected to drive the continued rise of EOR solutions.

How Does an Employer of Record Work?

An Employer of Record (EOR) sets up legal entities worldwide to hire employees on behalf of client companies. The EOR manages local compliance, payroll, taxes, and HR administration, while the client retains full operational control. This co-employment approach allows businesses to quickly onboard international talent without needing to establish their own local entities.

Under this arrangement, the employer of record takes on several key responsibilities. The employer of record performs the following functions:

• Simplifying Compliance: An EOR ensures compliance with local employment laws, tax regulations, and statutory requirements in each country where the client company has employees. This includes handling payroll, insurance, benefits, and termination processes.
• Co-employment Model: The EOR becomes the legal employer of the client’s international workforce, while the client company maintains operational control over the employees. This co-employment model allows businesses to expand their global reach without setting up local entities.
• Streamlined Onboarding: The EOR handles the recruitment, onboarding, and offboarding of international employees, providing a seamless experience for both the client company and the employees.
• Mitigating Risk: By taking on the legal responsibilities of employment, an EOR helps businesses mitigate risks associated with non-compliance, misclassification of employees, and other legal issues that can arise when hiring globally. 

This comprehensive approach, addressing regulatory compliance and operational efficiency, highlights the significant advantages of partnering with an Employer of Record. 

Benefits of Partnering with an Employer of Record

Partnering with an experienced EOR offers several advantages for businesses seeking global expansion. Some of them are as follows. 

• Faster Market Entry: EORs facilitate rapid entry into new markets, enabling companies to hire and onboard international talent without the need to establish legal entities in each country.
• Cost Savings: Outsourcing employment responsibilities to an EOR can be more cost-effective than setting up local entities or navigating complex regulations.
• Scalability: With an EOR, businesses can scale their global workforce up or down as needed, providing flexibility to adapt to changing market conditions, a key aspect of business process outsourcing strategies.
• Expertise and Local Knowledge: EORs bring extensive expertise in global employment regulations and local labor market knowledge, helping companies navigate the complexities of international hiring.

As the demand for global talent continues to rise, the role of employer of record benefits becomes increasingly crucial. By understanding what an EOR is and how it works, businesses can leverage this solution to expand their global reach, access top talent, and stay competitive in the international marketplace.

Tap into Global Talent Pools with an Employer of Record Solution

Expanding into international markets can be a daunting challenge, but with the right partner by your side, it doesn’t have to be. Enter Procloz—your trusted EOR partner. Our advanced payroll solutions combine the power of business automation and the expertise of Employer of Record services. With a global presence, including specialized Australian payroll services, we ensure accurate and compliant payroll processing, tax filings, and employee benefits administration. Bid adieu to complex payroll processes and welcome streamlined efficiency with Procloz handling your payroll needs.

Bangladesh has rapidly transitioned from a least-developed country to a lower-middle-income nation. This economic growth has been driven by various factors, including increased exports, remittances from overseas workers, and government initiatives to improve infrastructure and attract foreign investment. Strategic HR management is crucial in driving organizational success. A survey on 147 diverse organizations revealed that nearly 126 of them have adopted strategic human resource management as a core business strategy. This article will explore the challenges faced by HR managers in Bangladesh and the strategic HR practices that can contribute to organizational success.

Present-day Challenges in the HR Management of Bangladesh

• Labor shortages and skill gaps: Bangladesh’s rapid economic growth has created a demand for skilled labor that often exceeds the supply. This can lead to difficulties in filling critical roles and can impact organizational productivity.
• Wage disparities and labor union issues: Significant wage disparities exist between different sectors and regions in Bangladesh, which can lead to labor unrest and unionization efforts. For example, workers in the ready-made garment (RMG) sector, which is a major contributor to Bangladesh’s economy, often face low wages and poor working conditions. This has led to numerous strikes and protests in recent years.
• Cultural nuances and ethical considerations: HR professionals in Bangladesh must prioritize the eradication of child labor and the promotion of workplace safety. Failure to do so can lead to legal consequences, damage to a company’s brand, and a decline in employee morale.
• Government regulations and compliance: Organizations in Bangladesh must follow a complex regulatory landscape for HR practices. Compliance with labor laws and regulations is essential to avoid legal penalties and maintain a positive relationship with government authorities.
• Emerging trends in HR: Keeping up with trends such as remote work, AI, and automation is essential for HR professionals in Bangladesh.

Strategic Human Resource Management Practices for Organizational Success

Strategic human resource management (SHRM) plays a pivotal role in organizational success by aligning HR practices with overall business objectives. It’s a need of the hour to develop effective workforce strategies that align with organizational goals.

Key strategic HR practices:

• Talent acquisition and retention: Effective recruitment and selection processes ensure that the organization hires the best talent. Competitive compensation packages, employee development programs, and a positive work culture contribute to employee retention.  
• Performance management and employee development: Performance management systems provide feedback and guidance to employees, helping them to improve their performance. Continuous learning and development opportunities ensure that employees have the skills and knowledge needed to succeed.  
• Compensation and benefits: A robust compensation and benefits package such as competitive salaries, health insurance, and retirement plans, is a key factor in attracting and retaining top talent.   
• Diversity, equity, and inclusion: A diverse workforce brings different perspectives and ideas, leading to innovation and creativity. Organizations should implement policies and practices such as flexible work arrangements, unconscious bias training, and mentorship programs to promote diversity, equity, and inclusion.  
• HR technology and analytics: Using HR technology can streamline processes, improve efficiency, and provide valuable insights. HR analytics (Talent acquisition analysis, Compensation analysis, Training and development analysis, and Employee engagement analysis) can help organizations make data-driven decisions.

By implementing these strategic HR practices, Bangladeshi organizations can create a high-performing workforce, foster a positive work culture, and achieve long-term success. It’s recommended to implement efficient employer of record services to maintain accurate employee data and utilize tools for streamlined HR processes.

Emerging Technologies and HR in Bangladesh

Bangladesh is rapidly embracing emerging technologies, significantly impacting its HR landscape. Artificial Intelligence (AI) is transforming recruitment processes, with AI-powered tools automating candidate screening and matching, leading to more efficient and unbiased hiring. Machine Learning (ML) is being used to analyze employee data, identify patterns, and predict future trends, aiding in talent management and retention strategies. Cloud Computing has revolutionized HR operations, enabling remote work, data storage, and collaboration, fostering flexibility and cost-effectiveness. While these technologies offer numerous benefits, challenges such as data privacy and ethical considerations must be carefully addressed to ensure their effective implementation.   

Conclusion

Optimizing strategic human resource management (SHRM) in Bangladesh is crucial for organizational success. This involves efficient record management, understanding the importance of employer record, using HR tools, and creating effective workforce strategies that align with organizational goals. Bangladeshi companies can create a great workplace, hire the best people, and grow steadily by focusing on strategic human resource management.