Let’s go through everything you need to know about employer of record services for the experiential staffing that your business needs.
Whether you’re an experiential marketing company or another type of small business, outsourcing your payroll and HR tasks is essential. It will reduce the cost of hiring multiple in-house staff members. You also get to access different benefits that you wouldn’t have been able to as a small business owner.
If you’ve started researching ways to simplify your payroll process, you’ve probably seen the terms “PEO” and “employer of record.” But, how do you figure out the differences between the two? More importantly, how do you know which staffing option is best for you?
This guide will discuss everything you need to know about employer of record services and how they can best help your business.
What Is an Employer of Record?
When a small business typically hires an employee, the business assumes responsibility for all employment costs, liabilities, and tasks associated with that employee. An employer of record is a separate organization that serves as the employee’s employer for tax purposes. However, the employee performs their tasks at a different company, not the employer of record’s company.
The employer of record then takes over the responsibility of traditional employment liabilities and tasks. Some of the tasks they assist with include:
Filing and depositing taxes
Funding and processing payroll
Dealing with unemployment and workers’ compensation
Sending out W-2 forms
Processing and collecting time sheers
Maintaining employment contracts
New employee onboarding and hiring
Offering employee benefits
While the employer of record is responsible for the payroll and HR tasks for the employees, the client company handles the employees’ day-to-day tasks.
Employer of Record vs PEO:
A professional employer organization (PEO) is similar to an employer of record, but they have a few key differences. A PEO is typically set up like a co-employer with the client company. With an employer of record, they’re the full legal employer of all employees.
A PEO handles the same types of HR and payroll tasks that an employer of record does. It’s essentially an outsourced HR department so your internal teams can focus on their job’s responsibilities.
The key difference is which company is listed as the employer of the employees on all legal documents. A PEO arrangement also means the client company is liable for all employment costs.
When Should You Use an Employer of Record?
There are a few different situations when partnering with an employer of record might be appropriate for your organization. One such scenario is if your company wants to explore new markets. You can evaluate the readiness of global markets by hiring employees in the countries you’re targeting.
You can test how your operations function in other countries with your new workers by using an employer of record. You don’t have to worry about establishing a new entity to handle your international employees. Your employer of record will also deal with all the necessary paperwork required for hiring global workers.
If your organization also uses a lot of international independent contractors, you might need to partner with an employer of record. The employer of record can hire the international contractors on your behalf, ensuring that they perform their jobs in accordance with their local requirements. This helps your organization stay in compliance.
Even if your business doesn’t operate internationally, you can use an employer of record if you have employees in multiple states. The employer of record will ensure your organization stays in compliance with each of your employees’ individual states.
How to Find the Best Employer of Records Services:
Many employer of record agencies offer the same types of services but there are a few things you should consider before you sign a contract with one of them. Depending upon your needs and goals, you’ll want to verify that they have operations in the international countries you’re targeted. You want the company you partner with to have a lot of experience working in the countries you want to outreach too.
You should also ask them if they’ve worked with other businesses in your industry. The goal is that they’ll understand your organization well enough that they can tailor their solutions to you.
Next, you should ask them if you’ll be assigned an account manager or have to use an online portal. Your employer of record will be managing your employees and dealing with a lot of sensitive information. You want to ensure you’ll have a lot of human interaction with a dedicated person on their side.
The Benefits of Working With an Employer of Record:
In addition to ensuring your organization stays compliant with international laws, using an employer of record enables you to free-up time in a cost-effective manner. You’ll save money by outsourcing HR and payroll tasks instead of having to hire an internal team. You can use the funds that you save to expand your business.
Hiring new employees can take a lot of time, money, and resources. The employer of record can easily handle onboarding highly-talented new team members and get them up to speed. The newly hired employee can quickly get to work at your organization.
While an employer of record isn’t just a staffing agency, they can help fill that purpose for your organization. You can take advantage of the money you’re saving to grow your business by hiring new employees that are qualified for the position.
Partner With a Professional Experiential Marketing Agency:
Offloading some of your daily tasks is important when running a small business. On top of outsourcing your HR and payroll services, you should partner with a staffing agency when working on your next event. Our team at Auctus Agency can help bring your experiential marketing visions to life with our highly trained ambassadors.
To learn more about our services, contact auctus agency today.