Expanding your business to countries like Indonesia can be challenging. Local laws, payroll rules, and compliance requirements can slow you down. That's where an Employer of Record (EOR) becomes essential.
An EOR service handles employees' payroll, taxes, and legal compliance, so you can focus on growing your business. Research stated that companies can boost productivity by up to 70% by using EOR.
Let's explore below how EOR can make your global hiring faster, simpler, and more efficient.
An Employer of Record is a third-party organization that legally employs workers on behalf of another company. EOR handle local labor laws, payroll, taxes, and benefits, while you retain complete control over daily work tasks and performance management.
This setup lets you hire talent globally without establishing a legal entity in each country. It's a fast, cost-effective way to scale your workforce while fully complying with local employment regulations.
While both EOR and PEO (Professional Employer Organization) services help with HR management, they work differently. A PEO co-employs your staff but requires your company's legal presence in the country. An employer of record, on the other hand, becomes the full legal employer and can hire workers for you even if you don't have a local entity.
This makes EOR services ideal for global companies looking to enter new markets quickly.
Read more: Why Choose HRO: A Simple Guide to HR Outsourcing
Using an Employer of Record ensures compliance and boosts business productivity. As remote work continues to grow, this services are becoming essential for simplifying HR tasks and adapting to modern workforce needs. Companies have reported a 77% increase in employee productivity by leveraging Employer of Record solutions.
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Below are the ways EOR service can improve your business productivity:
This setup lets you hire in new countries without establishing a local entity, cutting hiring time from months to weeks.
Outsource HR, payroll, and compliance so your team can focus on product development, sales, and strategy.
Avoid the high costs of setting up and maintaining a legal entity—This services cover compliance, payroll, and local HR.
Employer of Record ensures compliance with local labor laws, minimizing risks of misclassification, penalties, and legal issues.
Hire top talent anywhere without geographic restrictions, supporting a more diverse and capable team.
It manages payroll, taxes, and mandatory contributions (like BPJS in Indonesia), keeping employees paid and compliant.
Read more: Top 10 Reasons to Outsource HR in Surabaya
Not all EORs are equal—choosing the right one helps ensure successful global expansion.
Before picking a provider, define your hiring plans and expansion needs. This helps you find an Employer of Record partner that fits your business.
Pick a provider familiar with local laws, taxes, and benefits (e.g., BPJS Kesehatan, BPJS Ketenagakerjaan, severance rules in Indonesia). Prefer those with in-country operations.
Good employee support boosts satisfaction and retention. Your provider should:
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Ask about how they handle employee issues, what tools they use, and their response times.
Choose an Employer of Record experienced in managing contract changes, terminations, and disputes under local laws. Ask for case examples.
Read more: How a recruitment agency can transform hiring in the manufacturing industry
Are you planning to expand into Indonesia? Ascentium Indonesia offers reliable Employer of Record services to streamline your HR operations.
Here's how we help: