What does EOR stand for?

An EOR, or Employer of Record, is a third-party vendor that legally employs software developers on behalf of a tech company that is expanding abroad. EOR services handle the employment of IT workers, their onboarding/offboarding, monthly payroll, compliance, IP protection, and benefits management.

How can EOR help with managing global payroll?

Payroll management is one of the integral aspects of expanding to new markets. Adhering to local compensation standards, taxation requirements, dealing with different currencies and exchange rates, and ensuring data protection is not a walk in the park. That’s why there are global EOR services companies that take the burden of payroll processing off your shoulders. Their professional team of lawyers and accountants, equipped with the latest updates on local laws, will help you avoid any inconsistencies, errors, and legal liability while ensuring timely payouts to your remote software engineers.

What is the difference between PEO, EOR, and GEO?

A Professional Employer Organization, or PEO, is a third-party company that works on co-employment terms, meaning they legally share specific employer responsibilities with you as a client. Usually, PEOs cover most of the HR operations, employment compliance, monthly payroll, and tax payments. Employer of Record (EOR), on the other hand, serves as a legal employer of your programmers, leaving full authority over the development team to you. Unlike PEO, Employer of Record companies lift legal matters and other operational functions off your shoulder.

Similar to EOR, Global Employment Company (GEO) offers the same services but helps companies hire talent worldwide instead. The downside of GEOs compared to EORs is a lack of industry specialization and limited operational services, which often leads to outsourcing of some tasks, posing potential risks.

What are the responsibilities of an EOR provider?

An Employer of Record provider acts as a legal employer of your software workforce in a country of your expansion. They handle all legal aspects of employing developers and managing business operations. They also run payroll, calculate and pay taxes, manage employee benefits, and handle offboarding. EOR providers like Alcor go beyond EOR, offering full-cycle tech recruitment and operational support—an all-in-one solution that eliminates the need to juggle multiple vendors so you can expand stress-free.

Do my employees work for me or for the EOR provider?

When cooperating with a remote EOR provider like Alcor, you stay in the driver’s seat. You maintain complete control over the hiring and firing of developers, managing their compensation, and communicating with them directly—no middleman involved. From day one, the software developers become an integral part of your company, fully aligned with your culture and practices.

The only aspect here is that the EOR provider acts as a legal employer of your software developers so that you wouldn’t have to open your own legal entity abroad. Contact us to get more details on this matter!

How to choose a reliable EOR service provider?

There are 3 critical factors in selecting the best Employer of Record company for your business needs:

1. Select an EOR company that specializes in the tech industry and hiring software engineers. EOR companies that serve all clients for all types of resources fall into the lowest standard denominator services. At Alcor, we are 100% focused on helping tech companies with compliant team scaling abroad.

2. Look for partners who provide complimentary services beyond just basic EOR. In this way, you won’t have to overspend and work with multiple providers that stitch together the services required for your expansion. For instance, at Alcor, we provide full-cycle tech recruitment and operational support on top of our EOR services, which ensures a seamless expansion.

3. Check their client reviews or talk to their customers to make sure they are easy to do business with. At Alcor, we assign a dedicated account manager who’s available 24/7. This personalized support is one of the reasons 93% of our customers are ready to recommend us.

How can I compare Employer of Record services providers?

Not all EOR services are created equal. Most of them serve as HR payment platforms, providing a one-size-fits-all solution with no market prioritization and industry specialization.

Unlike ordinary EOR providers, Alcor specializes in the technology industry, with a focus on the legal employment of software developers. We know all the ins and outs of the local laws, including employment contracts, tax obligations, NDAs, Intellectual Property Laws, and even equity compensation. With Alcor EOR platform, you can expand your tech business in the most compliant and cost-effective way.

How much EOR services cost?

The cost of EOR services varies from provider to provider. Usually, vendors charge a fixed fee of up to $599/month per employee, plus costs for services like payroll, legal compliance, and other operational functions.

At Alcor, we follow the pay-as-you-go approach, meaning no additional or hidden fees and no deposit funds. Plus, you get an opportunity to cut your EOR expenses as your development team grows. Leave a request below to learn more about our payment structure.

How to get started with an EOR?

Firstly, choose a suitable location for your expansion. The best options for US tech companies are Latin American and Eastern European countries, as they provide access to 2.5+ million developers and offer 2-4 times lower rates. Then, you need to pick a reliable EOR service provider who specializes in the tech industry, has flexible pricing, provides 360°in-country support, and offers operational coverage. When you outline the scope of services and sign the agreement, you can start hiring and employing developers abroad.

What are the main drawbacks of a partnership with an EOR provider?

If you choose the wrong EOR provider, you risk facing data security issues. Some providers may not be mindful of their security protocols and privacy regulations, so you need to check if their EOR software is safe and reliable.

Another issue is delayed response time due to inefficiencies in workload management or time zone differences. Make sure they have 24/7 account manager support to swiftly respond to your requests.

One more possible pitfall is unexpected costs from EOR providers, who tend to add extra charges for additional services. Traditional global Employer of Record providers tend to offer a limited scope of operational services and either charge over-the-top fees or simply outsource tasks to a third party, risking your sensitive data. Instead, look for an EOR provider that delivers a comprehensive solution so you can get everything in one place.

EOR vs IT recruitment agency: what’s the difference?

A tech recruitment agency is a service provider that covers the full-cycle hiring of software developers abroad. The spectrum of their services spans from creating candidate profiles and EVPs to applicant screening, job interviewing, and helping with offers/counteroffers. Unlike EOR providers, tech recruitment companies don’t engage in the employment of developers, legal and compliance activities, and they rarely deal with payroll.

EOR vendors, on their part, cover all operational functions except for tech recruitment. The exception is Alcor, as we provide a turnkey solution that includes both tech hiring and EOR support, plus operational coverage.

Is it easier to use an EOR service or create your own entity in another country?

It’s definitely easier to use EOR solutions when expanding abroad. In this case, you won’t have to deal with the time-consuming, costly, and bureaucratic process of opening your legal entity, as your local partner would already have one. Plus, no need to deal with employment contracts, calculation and payment of taxes, monthly payroll, legal and compliance matters, etc. By leveraging Alcor’s EOR solution, you can enjoy peace of mind, knowing that all legal and admin aspects are taken care of.

What are the alternatives to an EOR?

The best alternative to remote Employer of Record services is a software R&D center. This is an all-in-one solution, including full-cycle tech recruitment, EOR services, and operational support—everything for a seamless and compliant expansion. With Alcor’s R&D center solution, you can launch a fully backed development center with 10+ elite programmers within just 2 months, giving you a quick entry into new markets. Contact us for more details!