The Benefits of Engaging an EOR for Business Expansion

6 benefits of eor solutions
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Global companies have experienced severe financial stagnation or even loss of profit in business growth, forcing all overseas expansion plans to suspend for the past two years. 

To cope with the economic and business demand changes, companies are:

  • Revisiting their budget plans and revenue streams.
  • Look beyond the existing customer base to reach out to new markets.
  • Relook into the existing products or services to match and adapt to the new demand. 
  • Evaluate the best types of business models for business survival. 
  • Consider remote hiring to avoid venturing to a new target country.
  • Downsizing or streamlining business operations. 
  • Looking for a more flexible collaboration approach, such as hiring project-based employees to cope with fluctuating workloads. 
  • Streamlining HR processes, reducing costs, and aiming to focus on core business operations.

Is there any good solution to tackle most issues businesses are looking into from the above?

Yes, this is where an EOR solution provider can benefit your business and global expansion plans by indirectly adding value to your business model canvas.

What Exactly is an EOR?

EOR stands for "employer of record". EOR solution is a form of service from a third-party organization that does hiring and payroll for businesses with overseas deployment. 

Employer of Record "EOR" enables you to hire overseas' talents in another country without the need to set up a legal entity in your desired country.

What does EOR mean in business?

Under an EOR service, a business will not have to legally set up an entity in the country whereby the employee resides. Hence, an EOR service provider technically acts as your legal employer, hiring and transferring staff on behalf of your company under a service agreement. 

Once a candidate has been chosen, the EOR assumes the risks and obligations associated with day-to-day employment activities and back-office duties like payroll, carrying your burden by becoming the employee's actual employer.

What if I want to avoid engaging a complete legal employer?

In such instances, hiring a professional employer organization (PEO) will be the best alternative because PEO acts as your co-employer. At the same time, your company still owns hiring and decision-making. 

PEO will help to ease your day-to-day HR responsibilities and save you time and resources with the support of a local HR.  

Still, trying to figure out the differences between PEO and EOR?

Then, read the ultimate guide on PEO vs EOR to decide which is best for your company.

1.  Fast Market Entry

We're all too familiar with the phrase "time is money". EOR is the best option to reduce the time needed for business expansion from months to even years to set up a local entity. 

Using Malaysia as an example, Malaysian law would require the foreign company to have at least one resident director and an appointed corporate secretary that must be a Malaysian resident licensed by the local SSM (1). 

EOR will save you time, skipping the hassle of setting up an entity in Malaysia like that. In addition, it takes care of the multi-country payroll for your company, so you do not need to keep track of all the changes affected by the currency's fluctuations.

EOR takes ownership of everything related to HR, legal laws, taxation, and payrolls. Hence, you will have more time to focus on building your customer base, core business activities, and developing your business strategy. 

2 . Reduce Cost

Hiring an internal team for global HR management isn't the most brilliant solution, but an EOR can help you in these areas effectively and affordably. For instance, an EOR solution provider like AYP group has successfully assisted their clients to save costs by 18% and increase the company's efficacy by 30%. 


As a result, companies save more when they engage an EOR service provider compared to hiring an in-house payroll team, considering the cost and total working hours required. 

While many companies who seek EOR's services are undergoing business expansion, there are also instances where downsizing, mergers, acquisitions, or changing company structures could lead companies to seek help from an EOR. 

The global recession and financial crisis might significantly impact your company.

For example, suppose your number of employees has reduced substantially. If you aim to streamline your operations or are keen to deploy quickly, it is time to consider an EOR for a cost-effective solution. 

3.  Stay Accurately and Compliantly

Onboarding and managing employees from different countries are complicated. Using an EOR to reduce these risks and avoid performing substantial research on foreign countries is significantly simpler.

The phrase "look before you leap" is a piece of wise business expansion advice. With the aid of EOR, you can test the waters before making significant financial commitments and investments without the need to establish a corporation abroad.

If the outcomes fall short of your business goals, you can leave the country immediately without shutting down your company and seek legal counsel from the local authorities.

On the other hand, overlooking legal compliance in a country you are unfamiliar with can cause immense trouble for your business. Using an example, any employer who fails to comply with the employment insurance system in Malaysia would result in a fine of RM 10,000 and /or imprisonment for not more than 2 years upon conviction. 

Therefore, a professional EOR ensures that all clients are fully compliant with the laws and regulations of the country they enter. Let's concentrate on growing your business and target markets while leaving your legal worries to the EOR!

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4.  Single Digital Dashboard with Enhanced-Security Features

The primary HR responsibility is to ensure that confidential information about your company and all employees are well protected. While adhering to local agreements is vital, using Google Documents as payroll and PayPal to pay your international team is ostensibly not a wise choice.

One of the best payroll solutions that an EOR offers is AYP global pay which guarantees the best user experience for companies for remote and borderless hiring. 

AYP global pay enables users to access a single, integrated digital dashboard solution that will not only withstand security threats but also enable users to clock in and out using multiple devices simultaneously.

In addition, the service ensures that the monthly paycheck is always accurate using an advanced calculation method; it can also onboard new hires seamlessly and encourage employees to collaborate well.

5.  Solutions Handle Multi-Currency Payments

Another main challenge for hiring global employees will be paying them in multi-currency payment. For instance, are you juggling to pay your employees in SGD, MYR, IDR, or PHP? 

EOR aims to provide international payment solutions that will lower your transfer costs while ensuring that your employees will always receive salary payments on time and in their local currency compliantly. 

Simply put, you pay us in one currency while we pay all your staff from different countries in their local currencies!


6.  Improve Your Employee’s Retention

According to a survey from technology advice, 56% of workers shared that benefits were a very to moderately important consideration when assessing a job, and 56% said they would even exchange a pay raise for particular benefits (2). 

In light of this, how can an EOR help you by offering more attractive employee benefits that will help to increase employee satisfaction and reduce employee turnover?

Remember that EOR offers legal HR advice from the countries you intend to hire? The answer is that the local experts understand the local hiring requirements better according to the country and cultural norms. 

Understanding employee benefits such as holiday pay, overtime pay, minimum wage, and rest times are essential; this is particularly important for employing Malaysia's candidates, where the state holidays vary depending on where the employees' workplaces are located. 

Your global HR team from the HQ may need more expertise to provide or comply with the benefits according to the employee's local context; a lack of understanding could leave them at a loss. 

Are you looking to expand your business?

AYP has assisted global employers in expanding internationally with confidence. 

  • We have actively engaged 500,000 HR users in improving their processes by providing innovative digital solutions.
  • We have helped companies expand confidently with a portfolio of building business presences in 17 countries. 
  • Enhance your growth value of revenue streams from this strategic partnership. 

Ready to see your business model innovates according to the changing global demand of hiring anyone from anywhere? 

Share your business plan with us and get a FREE tailored solution for your business growth. 

Featured Content

1. How To Optimise Your Workforce Management with HR Analytics

2. Compliance Considerations When Expanding Your Business Overseas

3. 5 Benefits of Global Expansion to New Asia Markets

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