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When hiring and managing global teams, transparency and cost-effectiveness are key. Many companies are discovering that the real cost of using Employer of Record (EOR) platforms can be higher than expected due to various fees. These fees can accumulate, turning what seemed like a cost-effective solution into a financial burden. Additionally, the efforts to find and recruit global talent can make these processes even more costly for many companies.
EOR services are essential for companies looking to hire talent in countries where they don’t have an official entity. From payroll to taxes, benefits, and compliance with local employment laws, an EOR takes on the legal responsibilities of employing staff on behalf of another company. This arrangement allows businesses to quickly and compliantly hire employees in different regions.
However, many companies end up frustrated by the high fees associated with certain EORs. In this article, we will examine some common fees in popular EORs to help you understand these risks from the outset.
The 5 Most Common Fees in EOR Platforms
Using an EOR platform can introduce several potential fees that can accumulate quickly:
1/ Management Fees: Many EOR platforms charge a standard management fee per employee, which can significantly impact your budget, especially when managing a large team.
2/ Handling Fees for Agreements: Some EORs charge for executing hard copy agreements with wet-ink signatures. While these fees may seem minor, they can add up if you frequently onboard new employees.
3/ Payroll Service Fees: On-demand payroll services can be costly, especially if you require frequent payroll adjustments or assistance.
4/ Legal Fees: Handling complex terminations can incur high hourly fees. These fees can quickly escalate in complicated legal situations, adding unforeseen expenses.
5/ Off-boarding and Setup Fees: Termination of an employee can incur additional fees. If an employee is terminated within the first few months, you may face further setup fees.
These are just a few examples of fees that can accumulate rapidly, leading to higher costs than initially anticipated. This lack of upfront transparency can be frustrating and financially straining for companies aiming to manage their global workforce efficiently.
It's essential to have this knowledge from the moment you contact an EOR. Your global hiring provider should inform you from the beginning about all the requirements, specifications, and risks associated with hiring in each region. At Teamed, for example, both you and your global hires will be assigned a local specialist who will make you aware of these potential scenarios from the moment you contact us, without any commitment on your part.
Transparent Pricing from the Start
At Teamed, we believe in transparency and honesty from the very beginning, providing a close and accurate price from the first meeting. There are no hidden fees, no unexpected costs—just clear, straightforward pricing.
"No hitches, all straightforward and without a hefty price tag! Thank you!", mentions Julia Mardell, Operations Director at Classic Folios.
Our team is dedicated to providing human-centric service, ensuring you have the support you need, exactly when you need it. This approach not only enhances the overall experience and helps you navigate the complexities of international employment with ease but also keeps you informed about all the details relevant to hiring in each country, depending on salaries and the positions of your new hires.
Our goal is to ensure a transparent and trustworthy relationship from the very beginning, which means clearly showing you all potential risks.
"Teamed's proactive approach flagged potential issues with employees we weren't even aware of. Their service has been absolutely brilliant", highlights one of our clients, Shivani Phu, VP of Finance & Investment at Pixelynx.
At Teamed, we provide you with accurate costs upfront and assign dedicated regional specialists to support your every need, ensuring a seamless and efficient global employment experience.
We finish this article by sharing some of our discoveries regarding Deel’s fees for hiring an employee in the US. This is just an example of what you might encounter. Our purpose here is solely to share this data, which might be updated by the time you read this. We just want to give you all the info you need to pick the right EOR for your company.
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