Mastering Global Talent: A Guide How To Hire & Manage Remote Workers

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Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

June 3, 2026 8:16 pm

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy.

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance.

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes.

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration.

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work.

Responsibility	Employer of Record (EOR)	Client Company
Employment contracts & any other official documentation
Payroll processing
Income tax & social security contributions
Compliance with local labour laws
Statutory benefits administration
Managing daily work and projects
Setting goals and performance expectations
Providing equipment and tools
Leading the employee’s team and workflow

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record.

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements.

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications.

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law.

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity.

There are some other hiring models that can be confused with EOR.

EOR and PEO

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference.

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here.

EOR and staffing agency

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen.

EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law.

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward.

The operating company selects a candidate

The client company recruits the employee they want to hire in another country

The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here.

Payroll and taxes are managed

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR.

Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance.

Example:

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer.

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer.

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here.

Employment and HR administration

Locally compliant employment contracts and support with other documents requested by authorities
Employee onboarding
Employee record management. For example, control over PTO

Payroll and tax management

Regular payroll processing
Tax withholding and reporting of social security contributions with authorities
Payslip generation and creation of annual wage tax certificates

Benefits administration

Management of statutory benefits
Pension contributions (where required)
Support with benefits such as maternity leave allowance, sick leave allowance etc

Compliance and risk management

Insuring compliance with local labour law
Management of onboarding and offboarding processes
Representation in difficult legal and court cases

Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as:

Work permit and dependent visa support
Background checks
Relocation support
Value added services: support with housing, company car, banking, etc ( depending on the country).

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration.

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

Faster global hiring

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days.

Reduced compliance risk

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference.

Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided.

Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen.

Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations:

Remote-first teams and organisations
Companies testing new markets abroad
Startups expanding internationally

How to choose the right Employer of Record

Choosing between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market.

Here are some important things to keep in mind when deciding on your EOR partner:

Geographic coverage

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA.

Compliance expertise

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law.

In-house vs partner model

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities.

Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses.

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner.

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs.

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures.

Flat monthly fee per employee.

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client.

Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%.

Setup fees

Some providers charge onboarding or offboarding fee for each employee.

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee.

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive.

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities.

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations.

EOR FAQs

Is an EOR the same as a PEO?

No. PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only.

Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully.

Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies.

When should you use an EOR?

The most common reason for using EOR include:

Hiring employees located in another countries remotely
Testing new markets before establishing an entity
Expanding internationally

Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex.

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws.

ThisWorks can support your global expansion with our compliant Employer of Record services.

Contact our team to find our how we can help your international team glow fast and compliantly!

Employing people from around the globe has interesting possibilities and special difficulties. Understanding and negotiating the legal issues for both companies and employees is crucial for creating a compliant and efficient environment while remote work keeps traction.

Furthermore, companies hoping to flourish in this new remote age depend on retaining employees. With professional employee turnover rates rising to an alarming 64% in 2024, poor retention might have grave effects.

Six Benefits of hiring remote employees

Hiring remote employees has several advantages. The six best are listed here:

1. More capacity to select from

Hiring internationally opens a bigger talent pool. You can find applicants with the correct set of qualifications. This also implies learning fresh areas of competence. Leveraging worldwide marketplaces also encourages creative ideas. Expanding your search results to a more varied skill set helps you create a dynamic team.

2. Improved branding

A multicultural staff improves your brand image. It demonstrates respect for diversity and originality. This improves your brand and draws prospective recruits. Moreover, employees from many backgrounds contribute to a more open-minded workplace. This might help your business project more professionalism and to achieve sustainable success in the market. It also reveals your support of an inclusive workplace.

3. Advantage of time zones

With global recruitment, you can handle different time zones easily. It provides a comprehensive 24/7 customer support. This guarantees client support and timely project execution. For instance, someone is always available if a project requires immediate attention. Constant coverage helps to raise client satisfaction. It can also make it easier to meet strict deadlines.

4. Cost savings

Remote employees often demand less pay. Their reduced cost of living explains this. Also, hiring from Eastern Europe, for instance, can save you 30 to 70 percent relative to Western European staff. You can invest these savings in other areas of business. Or you can use this money for product development or marketing. Reduced running expenses also help to increase your profit margins.

5. Diverse perspectives

International staff members contribute special knowledge and perspectives. Therefore, your work environment gains cultural diversity. It promotes a variety of brainstorming options. Moreover, some diverse teams are more creative. They tackle issues from several point of views. This can lead to better solutions and a resilient company.

6. Language skills

Employing remote workers with many languages helps to boost the market. They speak in their native tongue to clients. This offers insightful analysis on changing your processes. Having multilingual employees also facilitates negotiations of contracts. Customer relations can also be enhanced by it. You can find more of the benefits here.

How to professionally hire remote employees?

Hiring remote employees should go as seamless as hiring in-person. You don’t need to create the wheel from scratch. Being thoughtful and strategic goes a long way. Here we have some top global talent pool hiring strategies. Use these best practices for remote employee onboarding.

Clearly define your needs

See who and what you need for the job. On LinkedIn, review comparable job ads from your industry. Pay attention to details you might have overlooked, such as experience with specific tools or websites. This approach speeds up the hiring process and narrows down the talent pool effectively.

Source talent strategically

Look for talents in the appropriate spots. Try LinkedIn Premium to help independent contractors focus on applicants by experience, language, and keywords. Post job openings also on international hiring websites like indeed.com. These websites are excellent if you are looking for particular kinds of skills.

Review credentials and achievements

Look for recognition and business credentials. Search for top business associations on their resume. You can also look for concrete statistics, like proven growth percentages from campaigns they’ve led. This reflects their reliability and success.

Create your interview strategy

Make a comprehensive list of interview questions including background, personality, and skills. Additionally, consider their time zone in relation to your target market. For positions requiring active community management and social media event planning, this is truly vital.

Respect the candidate’s schedule

Honor their schedule for the interviews. Typical problems include late or inconveniently scheduled interviewees. Plan a meeting, pick times that fit the candidate, and be on time. Steer clear of requesting information easily found on their LinkedIn or résumé. If you dive deeper into this topic you can visit Forbes.

What are the best interview questions for remote employee onboarding?

You now have applicants after posting job openings for remote employees. The next step should be to schedule remote interviews. These questions address the main facets of your search, including personality and background.

What is your background in working remotely, and how do you handle large projects without an actual office?
Could you describe a time you assisted in the successful implementation of a business plan?
How should our company strategy handle the pandemic and related events, in your opinion?
Do you think you can meet any of the requirements stated in this job description? If yes, do you have a strategy in place for how you want to advance your knowledge and abilities?
What is your go-to work-from-home productivity tip for maintaining focus?
What resources or tools do you use to keep up with the latest developments and business trends?
What strategy do you use for working remotely and collaborating with others? How do you resolve conflicts with coworkers?
What aspects of our existing business strategy would you change, and why?
How much guidance from us is necessary for you to begin?
Would you rather have management provide you with frequent, proactive feedback or a set of rules with minimal supervision?

You can find more of these questions here.

Top ideas to strengthen your remote recruitment system

Attracting the top talent requires your remote recruitment process to be improved. These five ideas will enable you to properly assign remote workers.

1. Have a clear job description

You should have a clear job posting. For remote employees, clarity is even more important. Potential workers from all around the world must know exactly what the position involves. Get ready for detailed inquiries on the employment and your business. Anticipate more back-and-forth than with temporary contractors. This guarantees that both sides are suitable for long-term dedication.

2. Set yourself up for success

Get ready for queries about logistics particular to remote employment. To stay in touch with your team since remote employees could have other working hours. Clearly state your expectations and processes. This clarifies for candidates what working remotely for your company exactly means. Clarity guarantees the appropriate fit.

3. Make an attractive offer

Search for cultural fit and abilities when recruiting. Also, find candidates motivated to contribute to your organization. Present interesting and appealing roles. Your business is appealing because of benefits, additional payments, creative training, and flexible work hours. Present yourself as an attractive company in your industry. This attracts outstanding long-term talents.

4. Take your time

You might evaluate candidates quickly for temporary projects. For long-term positions, though, spend effort creating a sizable pool of eligible applicants. The worldwide talent pool presents a broad range of recruiting choices. This enables you to locate someone appropriate for your team and with the correct skill set. Furthermore, investigating many backgrounds will help your business to be more creative and able to solve problems.

5. Engage hiring specialists

Work with remote HR professionals for certain IT competencies. They guide you through the search and to find the right employees. This identifies the strongest contenders. Moreover, experts can help you remain competitive by offering an analysis of market trends and pay expectations.

6. Seek a direct connection

Give connections a top priority. Hire remote workers just as you would hire long-term local staff. See their qualifications and appropriateness for your business. Evaluate their background and passion. Higher quality work comes from connected and dedicated individuals. Encouragement of direct contacts can also help to increase employee satisfaction and team cohesiveness.

7. Ask for soft skills

Search for applicants with outstanding qualifications and great technical skills. Look also for those with excellent soft skills. Some key factors are good time management, open communication, and working independently. These abilities guarantee the success of your remote workforce and help your business to be presented. Strong soft skills also help employees to be proactive and more flexible to fit new conditions.

8. Establish a strong interviewing technique

Great remote workers are hired based on interviews. Create comprehensive questions that probe candidates’ personalities and competencies. Team interviews let you evaluate your company’s fit. More straightforward and successful interviews follow from good preparation. Including real-time problem-solving activities during interviews will also help you to better evaluate a candidate’s pragmatic capacity.

Why should retention of remote employees be a priority?

Any company’s ability to flourish depends on keeping remote workers. Given the several choices for remote work, they can quickly leave if they are unsatisfied. If you can lower employee turnover, your company will be able to:

Cut expenses in training and hiring.
Maintaining current staff on board will help to show their company loyalty.
Maintaining production means preventing disturbance from empty positions.
Strengthen team bonds for maximum effectiveness.
Share pictures from satisfied staff members.

Best healthy activities for employee retention

Complete communication: With remote workers, clear, effective communication in international remote teams is truly essential. Set aside an online break area for virtual come-together hours and informal meetings. Plan yearly corporate-wide on-site meetings to deepen ties. Approach professional development, goal formulation, and direction on a one-on-one basis. Call daily meetings to keep everyone up to date. Provide online team-building exercises to promote innovation and interaction. These techniques help you to keep remote teams active and create better teamwork. They also provide opportunities for recognition and reward, boosting morale and retention.

Professional development: Encouraging professional growth is also one of the most important facts. It helps to ensure continuous skill development. Therefore, set clear performance goals and create mentorship programs. Provide career development opportunities like new responsibilities, advanced training courses, workshops, and seminars. Offer tuition reimbursement and ways to obtain certifications or qualifications. Recognize and reward employees who take advantage of these opportunities. This encourages critical thinking, investment in work, and a sense of accomplishment. Investing in professional development leads to a more skilled, motivated, and loyal remote workforce.

Legal compliance for international remote workers

Although hiring remote workers might be a legal labyrinth, it’s imperative to get it properly. Work regulations at the federal, state, and international levels all apply and can vary significantly. We’ll walk you through five main legal issues for recruiting remote employees to help you negotiate better. So, let’s discuss the legal compliance for international remote workers.

1. Tax Compliance

Remote labor presents a great difficulty for tax compliance. Tax regulations vary depending on where you live; complete info on these differences is vital. This applies to remote workers and their companies as well.

Determining the correct tax jurisdiction: Every country has its own policies when it comes to taxes. You must be aware of the locations from which your staff members are working and the applicable tax legislation.

Local Tax statutes: The company must comply with local tax laws. This covers VAT, payroll taxes, social security payments, and income taxes. Ignoring those can result in fines and legal problems.

Understanding the different taxes between countries will help you to make sure that your staff is not taxed twice. This applies to both meticulous preparation and potentially consulting with tax professionals.

2. Contracts of employment

Remote work depends on well-written, thorough employment contracts. These agreements should specify:

Work hours: Specify when staff members are supposed to be reachable. This clarifies for both sides their expectations.
Job expectations: Clearly state what is exactly expected from the remote employee. This guarantees everyone is in agreement and helps in determining performance criteria.
Outline the way termination will be handled. This guarantees clarity and helps to lower the possibility of legal conflicts.
By tackling these areas, you encourage a clear and efficient workplace.

3. Employee Benefits

Customizing employee perks for remote workers might be challenging. Normally benefits include health insurance, pension plans, and entitlements.

Health Insurance: While some countries would demand wellness programs, others have flexible healthcare options.

Vacation Days: While European countries often call for at least 20 days, the US does not legally mandate paid vacation days. The UK requires 28 paid days annually.

Following local labor rules guarantees remote workers receive just and sufficient compensation. This not only helps to prevent legal issues but also raises employee retention and happiness.

4. Privacy and data protection

Remote work mostly depends on digital communication and technologies for cooperation. In this case, maintaining the privacy and security of delicate data is very important.

Laws about data protection: It is crucial to follow European GDPR rules or American CCPA rules. These rules control data security and handling.

Cybersecurity approaches: Install multi-factor authentication, encryption methods, and frequent security assessments. By following these guidelines, one helps stop harmful assaults and data breaches.

Staff member education: Teach staff members optimal standards for data security. This covers secure file-sharing systems and good online surfing behavior.

Giving data security priority helps you safeguard the assets of your business and lower legal risk.

Frequently Asked Questions

Can US companies hire remote workers from another country?

Indeed, US businesses can employ foreign remote workers. They have to follow both countries’ local tax rules and employment laws. If you are interested, you can read more about that here.

What are the benefits of hiring international remote workers?

Employing foreign remote workers offers cost savings and access to a more extensive skill pool. It guarantees round-the-clock production and offers a variety of perspectives.

What legal considerations should be kept in mind when hiring globally?

Businesses have to follow local benefit policies, draft explicit employment contracts, and follow tax laws. Among the most important are local employment policies and data security.

How can companies streamline the hiring process for international teams?

Specify jobs in the company and make use of LinkedIn, Indeed and other web platforms. Standardize the interview process utilizing technology and engage hiring experts.

What is the importance of a thorough onboarding process for remote workers?

An extensive onboarding program creates connections and defines expectations. It guarantees that newbies have the tools they need and increases compliance and participation.

How to determine compensation and benefits for international remote workers?

Investigate local pay scales and weigh the cost of living. Match with corporate guidelines, incorporate legal needs, and present competitive packages including extra value.

What are the key challenges in managing international remote teams?

Among the main difficulties are legal compliance, cultural variations, and time zone communication. Ensuring access to technology and building team cohesion are also important.

cial security contributions are effectively managed. They assist both businesses and workers improve benefits and conforming to rules, delivering a piece of mind about compliance and financial health.