EoR (Employer of Record)

The shortage of skilled professionals in the German IT sector leads to significant challenges. An increasingly popular solution, particularly among German SMEs, is the recruitment of workers from abroad. However, various problems can arise:

• Global talent acquisition without a local presence:
  Establishing a physical presence or setting up a legal entity abroad is often associated with high effort and risks.
• Complexity of local laws and international employment contracts:
  Navigating through the legislation of different countries and managing international employment contracts is complicated and labor-intensive.
• Risk of compliance violations:
  ‍Lack of knowledge of local laws can lead to legal issues.
• Time-consuming and resource-intensive recruitment and onboarding:
  Hiring and training international employees requires significant time and resource investment

Solution

• International Hiring:
  Companies can employ IT professionals in various countries without needing a physical presence or a legal entity in those countries.
• Employment Law Responsibility:
  The EoR takes on all employment-related duties and responsibilities, including payroll, taxes, social security contributions, and compliance with local labor laws.
• Contract Management:
  The EoR manages all aspects of the employment contract, from hiring to termination of the employment relationship.
• Risk Management:
  By using an EoR, the hiring company can reduce the risk of compliance violations, as the EoR ensures that all local legal requirements are met.

Best Practise

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Best practices show that an Employer of Record (EoR) combines the flexibility of a service provider with the benefits of a full-time permanent employee, thus offering the best of both worlds. This combination is particularly valuable in the IT sector. A team that has worked for a client over several years can eventually be taken on permanently. Additionally, there is often the opportunity to form a joint venture, which can be a natural consequence of this successful collaboration.

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