The world of work has changed dramatically in recent years, and remote work implementation is no longer a trend—it’s a reality. For businesses wanting to tap into global talent pools, establish flexible work environments, or expand into new markets without the need for a physical presence, an Employer of Record (EOR) can be a game-changer.
But what exactly is an EOR, and how does it help with remote work implementation? Let’s dive into this increasingly popular employment model and explore how it can benefit companies looking to thrive in the modern workplace, with examples from Israel and beyond.
What Is an Employer of Record (EOR)?
An EOR is a third-party entity that acts as the legal employer for your remote or international workforce. While you maintain control over day-to-day tasks, the EOR handles employment contracts, payroll, taxes, and compliance with local labour laws.
In simpler terms, an EOR is your bridge to employing people in other regions without the need to set up a local entity. It’s an elegant solution for remote work implementation, especially when businesses want to scale up quickly and compliantly.
Benefits of Using an EOR for Remote Work
1. Streamlined Compliance and Risk Management
Hiring in a foreign country is not just about finding the right talent—it’s about navigating a maze of regulations. For example, in Israel, employers must adhere to complex labour laws covering everything from pension contributions to annual leave and maternity benefits.
An EOR takes this burden off your shoulders. It ensures that your remote employees are hired and managed in full compliance with local laws, whether they’re working in Israel, France, or the Philippines. This eliminates the risk of hefty fines or legal complications that could arise from non-compliance.
Example: A US-based tech company wanted to hire Israeli developers for a key project. Instead of establishing a local entity, they partnered with CWS Israel. The EOR handled everything—drafting contracts, managing payroll, and ensuring compliance with Israel’s robust employment regulations. This allowed the company to focus on delivering their project without worrying about legal or administrative headaches.
2. Faster Hiring and Onboarding
Setting up a local entity to employ even one person in a foreign country can take months. This delay can cost you top talent who won’t wait around.
An EOR can cut this timeline significantly. Remote employees can often be onboarded in just days, with the EOR managing contracts, benefits, and tax registration.
Example: A UK-based marketing agency expanded into Southeast Asia to cater to new clients. They used an EOR to hire a team in the Philippines within two weeks. The process was seamless, allowing them to meet client demands quickly and effectively.
3. Cost Savings
Establishing a local entity involves significant expenses—legal fees, office setup, and administrative costs, to name a few. For small-to-medium-sized businesses or startups, these costs can be prohibitive.
An EOR allows you to skip these expenses and pay only for the employees you hire. It’s an efficient way to scale operations without overextending financially.
Example: An Australian startup wanted to “test the waters” by hiring sales reps in Israel. Instead of investing in setting up an Israeli branch, they used an EOR model, saving tens of thousands of dollars while maintaining flexibility.
4. Access to Global Talent
The rise of remote work has opened up a world of possibilities for hiring the best talent, regardless of location. An EOR makes it possible to hire talent anywhere in the world without worrying about administrative or legal barriers.
Example: GE partnered with CWS Israel to hire a highly specialised team of engineers from the Philippines to work on several projects in Israel. Through the EOR model provided by CWS Israel, GE was able to onboard and manage these professionals efficiently. CWS Israel also handled the complex visa process, ensuring a smooth relocation and compliance with Israeli labour laws. This partnership allowed GE to access top-tier talent while focusing on the successful execution of their projects.
5. Simplified Payroll and Benefits Administration
Managing payroll for remote teams across multiple countries can be a nightmare. Different currencies, tax rates, and labour laws make it a daunting task.
An EOR simplifies this by consolidating payroll services. It also ensures that employees receive locally competitive benefits, which is key to attracting and retaining top talent.
Example: In Israel, mandatory benefits include pension contributions and severance pay, while expected benefits often extend to options like car leases and educational funds. When New Zealand-based healthcare company Fisher & Paykel partnered with CWS Israel to hire Israeli data scientists, the EOR seamlessly managed these mandatory and expected benefits. This ensured full compliance with Israeli labour laws while maintaining high levels of employee satisfaction, allowing Fisher & Paykel to focus on leveraging top-tier talent for their innovative projects.
6. Flexibility for Short-Term Projects
Not every remote role is long-term. Sometimes, businesses need temporary support for specific projects. An EOR is ideal in such scenarios, allowing you to hire talent for a defined period without committing to permanent contracts or infrastructure.
Example: A Canadian consulting firm hired interim project managers in Japan for a 12-month assignment using an EOR. This flexibility allowed the company to execute the project efficiently without overhauling their organisational structure.
The EOR Advantage for Remote Work in Israel
Israel is a hub of innovation and a magnet for global companies looking to tap into its world-class tech talent. However, hiring in Israel comes with its own set of challenges:
- Labour laws: Israel’s employment laws are employee-friendly and highly regulated.
- Mandatory benefits: Employers must provide pensions, severance pay, and more.
- Cultural nuances: Understanding local work culture is crucial for smooth collaboration.
CWS Israel specialises in navigating these complexities. Whether you’re hiring developers, marketers, or project managers, we ensure a smooth process from start to finish.
Remote Work Beyond Israel: A Global Perspective
While Israel offers unique opportunities, the EOR model is equally beneficial in other markets. For example:
- In India, it simplifies hiring for short-term IT projects without dealing with local tax intricacies.
- In Brazil, it helps businesses comply with complex labour laws and social security contributions.
- In Australia, it provides a gateway for global companies to engage with local talent while adhering to Fair Work regulations.
Is an EOR Right for Your Business?
If your company is exploring remote work, global expansion, or access to specialised talent, partnering with an EOR could be your next strategic move.
By handling compliance, payroll, and benefits, an EOR allows you to focus on what matters most—growing your business and empowering your remote teams.
Whether you’re expanding into Israel or looking to hire talent anywhere in the world, the EOR model provides the flexibility and peace of mind needed in today’s fast-paced business environment.
Ready to make remote work work for you? Let’s talk about how CWS Israel can help your business thrive.
