If you’re planning to expand your business to utilise global talent or want to operate in another country like Colombia, an employer of record is a perfect option. An employer of record Colombia will help you avoid setting up your entity in the country.

As a result, you’ll be able to immediately tap into the market and workforce while at the same time taking control of all operations in the new country.

While this strategy sounds attractive to business owners planning to expand globally, some watch-outs are available alongside the positives. To help you speed up your decision-making process, this article looks at both pros and cons of an employer of record. Here are the pros and cons.

Pros

Cost Effective

For new or rapidly growing businesses, an employer of record service can help with hiring responsibilities and completing back-end tasks that the human resource department would accomplish. Companies that have overloaded HR departments or those with smaller teams will find employers of record very helpful.

Outsourcing some of the company’s back office tasks can ease the overloaded HR department workers and helps reduce onboarding new staff costs. An effective employer-of-record strategy can ensure that your business is working within the local laws and regulations. That means you’ll avoid any expensive or complicated legal problems.

Simplified Business Growth

Businesses planning to expand to other countries look for the employer of record services. Since an employer of record already operates in the countries you’re looking to expand into, you’ll not have to wait for application approval in order to register as an entity in your target countries.

Additionally, an employer of record simplifies the hiring process, and since it’s well-versed in the new country’s employment laws, you’re sure and confident that your business is adhering to foreign laws and regulations. In case any complications arise, your employer of record will be responsible, providing you with much-needed legal security.

Cons

Not Suitable in the Long Run

Employer of record is only an ideal option for time-limited operations, short-term investments, or global expansion initial launch phases. If you’re planning to remain in the new market for a longer time, or you forecast the expansion to be faster and more lucrative, you’ll need to establish your entity.

Additional Time to Embed Your Culture and Goals

While EORs will align with your brand and organisational values and structure, you still need to embed them into your employer of record. And this means time investment. But soon, you’ll realise that EORs take responsibility for making sure that they’re aligned with your structure, values and goals.

Final Thoughts

Using an employer of record narrows down to your entire expansion strategy. However, it’s a perfect way to grow into new markets quicker and easier than setting up your entity. The many benefits that EOR offers make them the go-to option for many businesses looking to expand into other countries.