- Employers of record (EOR) help accounting firms hire employees overseas while managing the entire employment lifecycle, from payroll and tax compliance to leaves and benefits management.
- While the benefits are clear, firms should also weigh considerations such as data security and the level of control they want to retain to ensure their EOR arrangement delivers the right outcomes.
- Among global destinations, the Philippines offers optimal EOR conditions, with English-proficient, US-qualified accounting professionals and access to Asia’s rapidly growing economy.
Hiring accounting talent has never been more challenging. The ones you do find—the experienced ones ready to start immediately—live time zones away. Traditional hiring would mean months of due diligence and legal paperwork. You might even need to set up an entity.
But with client demands escalating and the accounting talent shortage not abating, passing up on global talent means missing competitive opportunities. This is why employers of record (EORs) are helpful.
Through EORs, you can have international staff on your payroll in days, with minimal compliance risks and full operational control. Read all about it below.
What is an Employer of Record (EOR)?
An employer of record (EOR) is an organization that legally employs workers on your firm’s behalf, especially in jurisdictions where you don’t have a local entity. EORs handle all employment-related regulatory requirements while the day-to-day remains your prerogative.
What an EOR Does
- Payroll Processing: Cut checks, handle direct deposits, manage tax withholdings, and resolve payment disputes
- Benefits Administration: Enroll employees in health insurance and manage mandatory government contributions
- Tax Compliance: File payroll taxes and manage workers' compensation, subject to your approval as the client firm
- Legal Compliance: Stay current with local employment laws across multiple jurisdictions and handle regulatory changes
- HR Documentation: Maintain employee files, handle employment verifications, and manage compliant employee agreements
- Risk Management: Assume liability for employment-related claims and provide legal protection for your firm
What an EOR Doesn't Do
- Day-to-Day Operations: Direct your global team's work, set their schedules, and manage performance evaluations
- Company Culture: Integrate international employees into your workplace culture
- Client Relationships: Maintain oversight as they serve your clients directly under your brand
- Professional Standards: Maintain control over work quality and client service standards, offering training as necessary
- Termination Decisions: Decide on promotions, role changes, and if/when employment should end (the EOR handles the administrative process)
An Example of EOR Hiring
What's the Difference Between EOR and PEO?
People often confuse an Employer of Record with Professional Employer Organizations (PEOs). It’s understandable; both involve third parties handling employment grunt work but are different primarily in liability.
When you partner with a PEO, you enter a co-employment arrangement naming both your firm and the PEO as legal employers. This means your firm must be registered in jurisdictions where you use PEO services, and you share legal responsibility for employees. In contrast, EORs serve as the sole legal employer on all documentation.
For a detailed breakdown of the differences between an EOR and PEO, including costs and services, visit our blog:
EOR vs PEO Explained: Key Differences Every CPA Firm Owner Must Know
Why are Accounting Firms Exploring EOR Services?
Precision has long been the north star of the accounting profession. While offloading your firm’s admin functions to an employer of record may seem counterintuitive, the benefits extend beyond simple convenience. We share three below:
Access Talent Anywhere
The talent drought in major markets has reached a crisis point. EOR services let you hire brilliant accounting professionals virtually anywhere, without spending resources establishing legal entities or becoming experts in foreign employment laws.
Additionally, unlike traditional channels that require weeks of paperwork and administrative overhead, an EOR compresses the timeline to days. Your firm can respond to client needs and market opportunities faster.
Hire Seasonal Staffing
You can use EOR services to engage specialized international talent on temporary or project-specific bases, again without the complex intricacies of traditional contract employment. This flexibility is an advantage during tax season and other similar periods.
Scale with Legal Confidence
Many firms hire remote accounting talent as independent contractors. However, geographical distance doesn’t eliminate legal obligations, especially if the working relationship is akin to full employment. These firms are still very much vulnerable to misclassification risks.
Consider the landmark case of Pascua v Doessel Group Pty Ltd, where an Australian accounting firm faced an unfair dismissal claim from a Filipino paralegal initially classified as a contractor. The tribunal ruled in favor of the remote worker, leading to financial penalties.
Such violations can drain finances at best and devastate reputation at worst. An EOR helps ensure you avoid both.
If you want a deeper look at the pros and cons of EORs, explore our dedicated blog:
Common EOR Considerations
Even the best EOR arrangements require careful planning and management. Address these common concerns proactively:
Perceived Loss of Control
Some leaders may worry that partnering with an EOR diminishes their authority over HR functions. Address such by defining how obligations are divided between your firm and the EOR service provider, ensuring alignment with how your firm operates and ultimately maintaining ownership of all policy decisions.
Data Management and Protection
EOR partnerships involve sharing highly sensitive employee and payroll data with third-party providers. When selecting an EOR company, evaluate their compliance with local and international data protection regulations.
Consider asking these questions:
- Where are servers storing your team's data physically located?
- How are payroll adjustments applied, and can you review calculations before processing?
- What data threat detection and incident response systems do they have in place?
Other evaluation criteria you can use:
- Depth of knowledge regarding payroll and HR practices in your target countries
- Systems for keeping your firm updated on changes to local employment laws
- Responsiveness and quality of collaboration during onboarding and ongoing operations
- Commercial agreement terms, including:
- Minimum term
- Upfront deposits
- Minimum team size
- Cancellation and termination clauses
- Extraction of employer/employee data from their systems
- Intellectual property ownership and confidentiality
The Philippines as A Rising EOR Provider for Accounting Talent
Employers of Record are present all over the world. This global reach gives accounting firms the flexibility to hire the best people anywhere while staying compliant every time.
However, in this blog, we focus our attention to EORs in the Philippines. Here’s why:
Access to a Thriving Market with a Skilled Workforce
When you partner with an employer of record in the Philippines, you position your accounting operations in proximity to rapidly growing markets in Asia. The country itself is a member state of the Association of Southeast Asian Nations (ASEAN), which is projected to become the fourth largest economy in the world by 2030—growth driven by young people in their productive years.
More than half of the Philippines’ population is under 35. This demographic is highly educated, with accounting and finance ranking among the most popular university programs. Many graduates gain international exposure early in their careers, even holding US-equivalent accounting qualifications.
Filipinos also have high English proficiency. The country ranks 22nd globally and 2nd in Asia in the EF English Proficiency Index. This linguistic advantage, combined with cultural familiarity with Western business practices, minimizes communication barriers that often complicate efforts to integrate remote teams.
Hiring Filipino Accounting Talent Without an EOR
Firms looking to expand their accounting operations in the Philippines without the aid of an employer of record can either hire Filipinos as independent contractors or establish a local entity.
While an affordable alternative, direct hiring comes with contract misclassification risks that can end up costing your firm more. Registering a business in the Philippines makes sense if you have long-term growth plans in the country. But the process can be restrictive, even with recent government reforms.
If you’re still assessing the viability of your firm thriving in the Philippine market, partnering with an EOR can be the way to go. You hire top Filipino talent without worrying about violating local laws or setting up local entities.
Looking to learn more about EOR companies in the Philippines? Check out our dedicated blog:
Employer of Record Philippines: Things You Need to Know
Choosing Your Global Talent Strategy
Employer of record services represent one approach to hiring international talent, but they’re not the only option available to accounting firms. Firm owners are also exploring outsourcing, both as a standalone strategy and in combination with EORs.
Accounting outsourcing gives you access to expert accounting talent without the complications of international employment. That means pre-vetted professionals who can integrate with your existing operations. On top of that, training programs and quality controls are already in place, managed by the service provider.
If you want to know how outsourcing can support your specific growth plans, our staffing experts can walk you through its nuances.
