Employer of Record Services Benefit Policy Compliance for Self-Sourcing


Self-sourcing – wherein business users (not staffing suppliers) directly identify, engage, select and procure independent contractors and other labor – is increasingly part of the contingent workforce management playbook. It is a strategy driven by user demand and enabled by emerging technologies. However, removing staffing suppliers from the sourcing process returns responsibility to drive increasingly complicated policy compliance to the HR department. The growing popularity of self-sourcing is yet another reason why savvy workforce managers are leveraging Employer of Record (EOR) solutions.

An Employer of Record (EOR) is a great guide for workforce management organizations leveraging the benefits of a self-sourcing channel. EORs bring tested methodology, proven strategies and replicable processes to HR and Services Procurement departments whenever it is needed. A good EOR brings deep domain expertise in all workforce policy compliance and works as an extension of the internal HR team. The best Employer of Record solutions ensure their clients are more efficient and confident in their use of self-sourcing (and other operations), freeing them to focus on more strategic initiatives.

The best EOR solutions are the ones with the most robust worker classification policies. Even should a client mistakenly attempt to improperly classify a contractor in a self-sourcing instance, the EOR has the expertise and controls in place to identify the mistake and ensure the proper classification. Because they have such strong classification policy structures, many EORs will indemnify and insure your organization against any classification-related lawsuits or costs; a definite value add!

That same expertise allows an EOR solution provider to help its clients to better address other complex categories and translate them into productive sourcing channels. Plus, EOR solutions provide organizations with the ability to create on-demand reporting and can house historical data used for managing hours; providing increased labor spend management and control. All this helps save the organization the time and costs associated with learning all the applicable (and frequently changing) employment laws as well as enforcing compliance.

Even the on/off-boarding process is improved by an EOR solution when self-sourcing. EOR technology platforms allow a streamlined consistent process for on/off-boarding. Eliminating the need to train and dedicate internal staff or adding additional headcount

Self-sourcing can be a time and effort-saving practice, but only if that convenience doesn’t come at the cost of compliance and risk mitigation. Engaging an Employer of Record solution – service, technology or both – is a fantastic way to extract maximum value from the practice while ensuring best practices for compliance with all regulatory requirements and business rules.

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