An Employer of Record (EOR) and a staffing agency both assist companies with hiring and workforce management, but they serve different purposes and operate in distinct ways.
An Employer of Record (EOR) is responsible for the legal and administrative aspects of employing workers on behalf of a company. This includes handling payroll, taxes, benefits, and ensuring compliance with local labor laws. The EOR becomes the legal employer of the workers, allowing businesses to hire globally without setting up a local entity. This is ideal for companies looking to expand internationally or manage a remote workforce, as the EOR assumes all legal and compliance responsibilities associated with employment.
In contrast, a staffing agency recruits and provides temporary or contract workers to companies. The staffing agency handles the recruitment process, including sourcing, interviewing, and hiring candidates. The agency remains the employer of the workers for the duration of their contract, managing payroll and HR tasks. However, staffing agencies typically focus on short-term or project-based roles rather than long-term employment. They are best suited for companies needing temporary or flexible workforce solutions.
In summary, an EOR provides a comprehensive solution for legally employing and managing workers, particularly for long-term or international roles, while a staffing agency focuses on recruiting and providing temporary or contract staff for short-term needs.