EOR Outsourcing vs In-House Hiring, The Pros & Cons

As a company that wants to gain more market share you are faced with the challenge of needing more employees. Regardless of your field of business that’s almost always the case.

Based on surveys done in the US market during the past 5 years, the average cost of finding and hiring an In-house full-time employee is 4,000 to 7,000 US dollars, and that is just the “hiring cost” not related to that employee’s annual salary and benefits.

This is a link that elaborates on the subject...

https://www.adp.com/spark/articles/2019/07/calculating-the-true-cost-to-hire-employees.aspx

For that companies around the world have been implementing Employer of Record outsourcing as a business growth solution, while still maintaining core teams of in-house hired talent to balance between consistency and expansion, and they carefully weigh the following elements in both approaches to make an informed decision:

·???The Cost Element

Outsourcing some of your staff through EOR (Employer of Record) comes at a financial cost, but contrary to hiring in-house, it has no hidden costs that might pop up later. Hiring in-house has many hidden costs associated with it like: Administrative fees for paper work processing fees, in-house training fees, work space leasing and equipment costs… etc.

·???The Talent Element

Salaries and benefits in your local country can be very competitive, which in turn raises the cost of hiring highly skilled individuals if you are just limited to hiring in-house, on the other hand, partnering with an outsourcing EOR firm might give you a better chance to allocate much better talent at a lower cost, depending on the region you are hiring from. This also gives a lot more room for diversity and intercultural integration which has proven to be very productive.

·???The Technical Element

If you limit your hiring to local resources only, this means you are limited by the technical limitations of your country or region, while EOR outsourcing from other regions opens the door for you to obtain the best technically skilled individuals for your projects.?

·???The Flexibility Element

In many cases, a startup or an established company lands a deal or a contract in another region, sometimes their perfect customer and market is often on a different continent! In those cases an outsourcing EOR provides the perfect solution for mobility.

Instead of having to establish a whole new company or legal entity in that country or region, a company can move its team through an EOR partner, and work under their local entity in exchange for a marginal fee compared to cost of establishing a branch or new entity in that region.

·???The Predictability Element

Hiring in-house has budget control issues, since you can’t predict the exact cost upfront, most of the time you will exceed certain budget expectations to gain the needed talent. In working with an outsourcing EOR firm, you can have a clearer hiring budget forecast, and move within that budget to hire the best talent for the job.

Depending on your company’s size and sector, working with an outsourcing EOR partner can be the best solution for your needs, maybe not at 100% capacity, but certainly for offshore contracts and projects, it can be the most optimized and efficient answer to your problems.

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