An Employer of Record (EOR) system is a strategic HR solution that allows businesses to penetrate new markets without the necessity of a physical presence. Companies can delegate the administrative and compliance obligations associated with the recruitment and supervision of employees in foreign jurisdictions by collaborating with an EOR provider.
The Function of a Philippine Employer of Record
A Philippine employer of record is essential for a company that intends to expand its operations into the Philippines. This entity is the legal employer of the company’s Filipino employees, and it is responsible for a variety of HR functions, including:
Payroll processing: Guaranteeing that payroll calculations are conducted in a timely and precise manner, including deductions and benefits.
Benefits administration: The management of employee benefits, such as health insurance, retirement plans, and other statutory entitlements.
Compliance management: The act of adhering to Philippine labour laws and regulations, such as the minimum wage, working hours, and social security contributions.
HR administration: The management of tasks such as onboarding, offboarding, performance management, and employee relations.
Tax compliance: Guaranteeing adherence to Philippine tax regulations, which encompass income tax withholding and corporate tax reporting.
Advantages of Employing a Philippine Employer of Record
Businesses can capitalise on numerous benefits by employing a Philippine employer of record:
Reduced administrative burden: By outsourcing HR functions, companies can concentrate on their primary business operations while the EOR manages the intricacies of local labour laws.
Rapid market entry: Businesses can promptly establish a presence in the Philippines without the need for extensive setup and compliance processes by partnering with an EOR.
A cost-effective solution: EOR providers frequently provide competitive pricing and economies of scale, rendering it a more cost-effective alternative to establishment of a subsidiary.
Risk mitigation: EORs can assist businesses in reducing the risks associated with non-compliance and labour disputes, thereby guaranteeing a compliant and efficient operation.
Access to local talent: EORs can help in the procurement and hiring of qualified Filipino talent, thereby leveraging a skilled workforce.
Enhanced employee experience: EORs can offer employees a localised HR experience, ensuring that they feel valued and supported.
Scalability: EORs are a flexible solution for businesses with fluctuating requirements, as they can easily scale their services to accommodate changes in a company’s workforce..
Important Factors to Consider When Selecting a Philippine Employer of Record
When selecting a Philippine employer of record, enterprises should take into account the following factors:
Expertise and experience: Select an EOR provider with a significant comprehension of local labour laws and regulations and a demonstrated history of success in the Philippine market.
Service offerings: Guarantee that the EOR provides a comprehensive array of services that are consistent with the requirements of your business, such as payroll, benefits, compliance, and HR administration.
References from clients: Collect testimonials and references from other organisations that have utilised the EOR’s services to acquire an understanding of their satisfaction and performance.
Technology and infrastructure: Assess the EOR’s technology capabilities and infrastructure to guarantee the deliverance of reliable and efficient services.
Data security and privacy: Confirm that the EOR has implemented effective data security measures to safeguard sensitive employee information.
Cultural comprehension: Search for an EOR provider that exhibits a profound comprehension of Philippine culture and is capable of effectively communicating with local employees and stakeholders.
In conclusion,
Businesses seeking to expand their operations into the Philippines may find a Philippine employer of record to be a valuable asset. Companies can ensure compliance with local labour laws, reduce administrative burdens, and expedite their HR processes by collaborating with a reputable EOR provider.