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Choosing an Employer of Record: 5 Questions to Consider

Nate Akeroyd | October 11 2022 |

With the explosion of remote work in recent years, many organizations are sourcing and managing workers in new locations. While tapping into these new areas provides the opportunity to improve talent quality, reduce costs and increase diversity, operating in multiple regions and countries also means navigating new tax and compliance requirements.

An Employer of Record (EOR) is an organization that assumes the responsibility of providing payroll, benefits, and, risk management for a company’s employees on their behalf.

When a company partners with an EOR, the EOR provider will assume all risk mitigation and ensure compliance with all local labor laws and regulations.

However, not all EOR companies can provide the same level of care. When selecting your EOR partner, consider these five questions before proceeding.

1. Does the Employer of Record Provide Transparent Pricing/Rates?

When selecting an EOR company to work with, it’s important to choose a partner that is transparent about its pricing. This is especially true when the EOR works with select staffing partners. When working with select partners, there is a strong chance your organization will come across several hidden fees – such as staffing agency markups, setup fees, taxes, and more. Additionally, hidden fees and markups can also be introduced during the term of the contract. It is important to ask your prospective EOR about their pricing model up front.

2. Does the Employer of Record Operate in Countries You Need to Payroll In?

Many organizations operate across international regions. An inexperienced EOR partner may require extra time and cost to familiarize themselves with your target regions. In addition, efficiency will likely suffer as well. A well-versed EOR payrolling partner will have both knowledge and the capability to offer solutions in the regions you need to hire. Partnering with an established EOR for payroll services will help your organization drive cost savings and achieve compliance regardless of location.

3. Is the Employer of Record Vendor-Neutral?

When an Employer of Record states that they are “vendor-neutral,” this means they do not employ partnerships with any staffing or MSP partners. As a result, the EOR will be able to cycle through a plethora of available options for the client, resulting in the client getting the best rates available to them. Most EOR providers leverage partnerships with staffing agencies, so it is important to ask your prospective EOR how they plan to drive cost savings for your organization. (Learn more about vendor neutrality.)   

4. Can the Employer of Record Offer Additional Workforce Management Solutions?

Your organization is dynamic and requires attention across other verticals. Some EOR providers are only capable of providing payrolling/compliance services, while more innovative providers have expanded to offering Worker Experience services to bolster their traditional EOR offering. It’s important to understand the breadth of your EOR provider’s services to take advantage of opportunities to bundle multiple managed services with a single partner. When approaching a prospective EOR company, make sure to gain a full understanding of the services and solutions they can provide. (Read more: 8 Advantages of an Integrated Workforce Management Platform)

5. Does the Employer of Record Have a Proven Track Record of Success?

With the contingent workforce expected to comprise more than half of the total employee workforce by the end of the decade, it’s important to choose an EOR partner that has a proven track record of success managing full-time and contingent employees. When selecting an EOR partner, make sure to read unbiased testimonials or seek references from clients to ensure they are happy with their EOR services. You can also ask your prospective EOR provider for success stories from clients with similar goals and challenges as yours.

Partner With An Industry-Leading & Purely Vendor-Neutral Global EOR Provider

Magnit is the only purely vendor-neutral, global provider of Employer of Record solutions and Worker Experience services that offers personalized solutions that fit the requirements of each customer. With Magnit EOR, your organization can compliantly hire and payroll in over 160 countries worldwide with support from a team comprised of former IRS auditors and legal professionals. Magnit offers clients a holistic Integrated Workforce Management Platform comprehensive of industry-leading software, services, and data built to enable organizations to successfully source, track and manage high-quality talent while effectively managing costs and risks.  

Contact us today to learn more about our Employer of Record services and several other offerings.

If you’re interested in learning more about how Magnit is helping organizations implement winning contingent workforce programs globally, please contact a Magnit representative at

Disclaimer: The content in this blog post is for informational purposes only and cannot be construed as specific legal advice or as a substitute for legal advice. The blog post reflects the opinion of Magnit and is not to be construed as legal solutions and positions. Contact an attorney for specific advice and guidance for specific issues or questions.

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