What is Employer of Record?
Employer of Record or EOR is a common concept in Europe and North America but not in South Africa. In short, an EOR legally employs people on behalf of a global business. There could be various reasons for this, but the most common reason would be when a global business wants to enter the South African market but does not want to go through all the legal processes of registering a new legal entity. It also then offers an opportunity to assess the South African market before "pulling the trigger" and time to market is much quicker. Another common reason would be to get access to more affordable professional skills in South Africa.In a South African context, labour broking would be the thing that comes closest to EOR.
There are however distinct differences:
- EOR would deal with global/offshore businesses,
- EOR is mostly aimed at higher-paying professionals,
- The period of an EOR engagement would normally be longer,
- The outcome of an EOR contract will often result in permanent employment by the global business,
- Recruitment and onboarding play an important role in the EOR life cycle.
EOR remains an exciting opportunity for South African businesses with the appropriate skills and networks that have an appetite for risk.
For more information on what DNA offers around EOR please click here