Why Tech Companies Are Turning to EORs

You're trying to grow your tech company while continuing to innovate, but to do that, you need the best talent from around the world. Over the next five years, tech roles will explode globally-and the competition for top talent is fierce. Couple that with the complexities of global hiring, and suddenly that brilliant engineer in Berlin or that AI specialist in Buenos Aires feels impossibly out of reach. You know they could transform your business. You just don't know how to legally get them on your team any time soon.

That's where an Employer of Record (EOR) for tech comes in. Think of EOR as your efficiency superhero, working on your behalf to find top talent while managing tasks that can slow you down: contracts, payroll, taxes, benefits, and regulatory compliance. You get to keep expanding without the stress of untangling all the global hiring red tape.

Ready to scale your global tech team and take your business to the next level? Let's look at how an EOR for technology companies can give you the tools and strategies to expand with ease.

What is an EOR for technology?

An EOR for tech is a third-party partner that legally employs global team members, so you don't need to establish a separate legal entity. One of the biggest challenges of global expansion is managing an international workforce. If you want to do business and employ people in other countries, you must be legally authorized to do so. You can set up a local legal entity or partner with an EOR that acts as the legal entity.

You can skip months of legal research and keep that budget for growing your business instead. With an EOR, you get to stay focused on the big ideas and expansion without needing to manage tedious administrative tasks like:

• Payroll.
• Benefits administration.
• Tax withholdings.
• Cross-border contracts and onboarding.
• Visas.
• Labor laws compliance.
• Recruitment.

As an added benefit, many EORs for tech operate in nearly 200 countries, giving you more options for sourcing great talent compliantly.

Global hiring challenges in the tech sector

Hiring and retaining great employees is challenging even in your home country. Add in the complexities of managing distributed teams, cross-border hiring, and global HR, and things get even more complex. If you're a growing tech company or a tech startup, you may be experiencing:

• Talent shortages. The need for tech experts, like big data and AI specialists, cybersecurity experts, and software engineers, is on the rise. Unfortunately, there aren't enough of these folks to go around, so you must make your company shine.
• Employment law confusion. Every country maintains its own labor laws. In one country, you need to give 30 vacation days, in another, just 15. Or, you need to pay into social security benefits you weren't aware of. Not doing so could result in penalties.
• Delays in establishing a local legal entity. Trying to expand in Spain? Growing your business in Brazil? You need a legal entity to help you do so, but navigating that could take months.
• Payroll challenges. Every country has its own payroll schedule and tax codes. Employing people in several countries can get very difficult and lead to delays, confusion, or penalties if you don't follow local laws.
• Contractor classification risks. With an international workforce usually comes a mix of permanent employees and contractors, especially in remote tech teams. But knowing the difference can be complex depending on the country. Misclassification can be costly and affect your credibility.
• Cultural misalignment. Hiring, onboarding, and cross-border time management mean navigating different cultures, languages, and communication styles. Without local assistance, you could inadvertently operate in ways that don't align with local practices, thus jeopardizing trust or credibility.
• Compliance complexities. Local and regional regulations like the General Data Protection Regulation (GDPR) or the California Consumer Privacy Act (CCPA) must be followed. But keeping track of them all is challenging, and if you miss one, you may be subjected to penalties and lose credibility.

Challenges like these are why EORs for technology companies are essential. Instead of confusion, you get clarity about who you're hiring, what they need, and how to stay compliant across the globe.

Benefits of using an EOR for technology

Go global fast and keep innovating with these benefits:

• Unlock global talent pools. Find that niche AI expert or cybersecurity specialist without setting up a local entity. Your EOR will help you recruit, hire, and onboard thanks to local knowledge and expertise that gives you a competitive edge.
• Expedite onboarding. Maximize productivity and get your new employees started right away, since you don't have to wait to set up local entities.
• Maintain total compliance. With EOR services in 185+ countries, you can rest easy knowing that you're following local and regional regulations. From taxes and benefits to time off and payroll, EORs handle compliance so you don't have to.
• Classify correctly. Instead of hiring employees, you may opt to hire contractors. But as you scale and grow, misclassification of employment is a risk. EORs reduce that risk and ensure you're following local laws about classification.
• Save money. Avoid the high cost of setting up local entities and hiring more people to manage administrative tasks that an EOR for tech can do with ease.
• Scale up or down. Enter or exit new markets quickly depending on your company's KPIs and local markets. If opportunity knocks, leverage the flexibility EORs offer to expand into new places and build teams. Whether you're an established company or a startup looking to expand, EORs can scale with you.
• Protect intellectual property rights. Keep contracts compliant to ensure both you and your employees are protected.

Tech contractor onboarding with an EOR

New markets mean new rules, but don't let that deter you. Employer of record services let you build your global team with streamlined contractor onboarding that aligns with local laws.

As you scale and grow into new markets, you must consider classification risks. A contractor in one country may be considered an employee in another. If you misclassify, you could face penalties or fines.

Mitigate those risks with EOR for tech that manages everything from NDAs and IP clauses to equipment logistics and tax documentation for contractors. You'll know contractors and employees are being paid on time and fairly, while building credibility that keeps attracting great talent.

Use cases: How tech companies leverage EORs

Not sure if an EOR makes sense for your company? Let's look at a few use cases to see how beneficial EORs can be in your sector:

• SaaS startup testing a new market in Brazil. Instead of waiting months to launch, an EOR can compliantly hire and onboard employees in a matter of weeks. Get moving, stay productive, and stay ahead of the competition in new markets.
• Cybersecurity firm onboarding remote analysts. Your clients need total security regardless of where they operate, but that means having experts ready to tackle cybersecurity challenges in multiple countries. Source top global talent that meets your budget and needs, and build credibility with your clients, all thanks to EORs for tech.
• Global enterprise tech brand acquires a small AI startup. Avoid the challenges of sorting merger details and let an EOR temporarily hire employees as details get sorted out.
• Tech consulting agency. Manage a blended, distributed team of employees and contractors anywhere in the world. EORs keep communication flowing smoothly to ensure productivity and efficiency.

EOR vs other global hiring models in tech

How to choose the right EOR for technology

Your company is unique, so your global hiring solutions need to be too. Consider these factors for finding the right EOR for your tech company:

• Experience in your sector and the ability to work with distributed teams
• Capable of scaling with your growing company across several international markets
• Ability to support both employee and contractor models in multiple countries
• Strong tech stack integration for payroll, HR, and onboarding
• Proven track record in your target hiring countries
• Transparent pricing to avoid hidden fees and delays in implementation
• Compliance guarantees to avoid penalties and fees

Stay up to speed with Pebl's EOR for tech

Speed and innovation are at the core of successful tech companies, and to keep up, you need the best talent from around the world. Global hiring can be messy, but Pebl's EOR services provide the structure, EOR support for tech companies, and expertise to hire quickly and compliantly without excessive overhead, wasted time, and legal hurdles.

Whether you're a tech startup testing new markets or an expanding enterprise brand, we give you the tools and strategies to hire the best talent, expand, and keep building great tech.

Contact Pebl and let's talk about how we can help you build your global workforce and scale with ease.

Disclaimer: This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided "as is," and no representations are made that the content is error-free.

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