EOR vs GEO vs AOR: A Detailed Breakdown From Our Hiring Experts

When you think of the future of work, what do you imagine? Employees replaced by robots? People working from the beach on a “workation?” Or digital nomads travelling the world with a laptop and a backpack.

No matter what you think it’s going to be, there’s no denying that the way we work is changing. There’s a distinct shift in focus from an employee’s time-in-seat to the value they bring to their work. And we’re here for it.

At Teamed, we support your global vision. As an employer of record (EOR) company, we aim to help you focus on the important stuff–growing your team–by taking on the hassles of international hiring, payroll, and compliance.

Companies choose us for our simplicity, agility, and flexibility. We believe in what matters most - the customer and their remote team.

When you look for a partner to help you expand your business in a foreign country, you may come across a variety of terms that are used interchangeably, such as EOR, AOR, and GEO.

What do they mean and how is EOR vs GEO vs AOR different from each other? That’s what we’re going to explore in this article.

Employer of Record (EOR)

An EOR allows you to hire employees or contractors in a foreign country without having to set up a legal entity in that location.

Essentially, it acts as the legal employer of your employees and takes on administrative, HR, payroll, and compliance responsibilities.

With an EOR like Teamed, you can:

onboard employees within 24 hours
manage localised contracts and offer best-in-class curated benefits
streamline invoices, taxes, and social security contributions
source candidates, process their VISAs, or help them relocate through a network of vetted vendors.

Thus, an EOR is like an extension of your global team, helping you stay compliant with country-specific rules and regulations.

Pros and Cons of an EOR

Let’s see how an EOR can benefit you and what are some of the downsides of partnering with one:

Pros	Cons
Enables you to hire employees from overseas talent pools without having to establish a legal entity in those countries	You may feel like you have less control over the onboarding process since you’re dependent on the EOR to run your company in a foreign location.
Allows you to focus on growth while the EOR takes the full responsibility of adhering to labour laws, tax compliances, and offering localised statutory benefits	If the EOR works with third-party vendors in the country, then there is a risk of non-compliance. Also, there are challenges working with different partners in different countries. The EOR service may not be smooth and seamless as in a wholly-owned entity system.
Offers a localised experience to remote employees so that they don’t feel like second-class citizens	Partnering with an EOR can add some friction to your daily workflow. There may be changes in company culture that you’re not comfortable with.
Protects you from risks through intellectual property protection	-
Offers 24/7 customer support to help you through issues with payroll, administrative, or IT tasks	-

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However, note that when partnering with Teamed, you have full control over all aspects of the employment contract. We only require you to adhere to the country-specific labour laws for which we will provide guidance.

When Does an EOR Work Best?

When an employer doesn't have the resources to build a local entity in a new country
When an employer doesn't have legal and finance teams in the new country
When an existing employee relocates to their home country or a new country

Global Employment Organisation (GEO)

A GEO is a service provider offering employment solutions to global businesses. They help employers streamline administrative activities like recruitment and onboarding for international employees.

A GEO takes care of the following:

Recruitment: GEOs help employers extensively search for employees across different countries.

Administration outsourcing: When a company already has a legal entity in another country and doesn't require an EOR platform, they seek assistance from a GEO. GEOs help them to streamline payroll, benefits, and tax compliances.

Global expansion: GEOs help employers identify the most suitable locations for international development by conducting detailed, data-led research. Based on a GEO's findings, companies can determine the next destination for setting up a subsidiary.

Pros and Cons of a GEO

How will partnering with a GEO benefit you? And what are the pitfalls you should be aware of?

Take a look:

Pros	Cons
Helps you find employees who are a good fit for your company	Enterprises with an existing legal entity in the host country often need help integrating the GEO with their current HR systems.
Enables you to reach a diverse talent pool and find candidates with a good cultural fit	There is a potential for data breaches since GEOs require access to a company's global workforce data.
Assists you to research new markets, build a go-to-market strategy, and streamline the market entry process

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Agent of Record (AOR)

An AOR is a legal entity that acts on behalf of an employer or a contractor. It initiates contracts, forwards invoices, and makes and accepts payments.

AORs simplify the process of hiring and paying independent contractors while staying compliant.

An AOR helps you with the following:

Recruitment and payment of independent contractors
Initiation and negotiation of contracts with contractors
Ensuring that the contractor has submitted all necessary documents to avoid the risk of misclassification.

Hiring an international contractor varies from country to country, and different legal considerations come into the picture. Employers who treat contractors as employees might face legal challenges related to misclassification.

Pros and Cons of an AOR

To understand how you can benefit from partnering with an AOR and what the potential risks could be, take a look at the table below:

Pros	Cons
Saves time spent on sourcing independent contractors and doing the paperwork	Risk of IP leaks since independent contractors have access to your proprietary data
Saves money as employers are charged a fixed amount based on the number of quality contractors	Biased hiring of independent contractors due to partnerships between AORs and contractors
Increases your productivity since contractor management is fully taken off your hands

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EOR vs GEO vs AOR: A Comparison

Now that you have an understanding of the core objective of each type of platform, let’s see how they measure up to each other. This should also give you a good idea of which type of service to take on.

Employer of Record (EOR) services offer distinct advantages over Global Employment Outsourcing (GEO), especially for startups and scale-ups. EOR simplifies the complexities of global workforce management by assuming full legal responsibility for hiring, payroll, compliance, and HR administration in multiple countries.

Unlike GEO, which can involve multiple vendors and fragmented responsibilities, EOR provides a streamlined, all-in-one solution, fostering agility and scalability. This allows startups and scale-ups minimise risks associated with international expansion, and navigate unfamiliar legal and tax landscapes with ease.

EORs can help emerging companies efficiently deploy talent worldwide, enhance employee satisfaction, and maintain compliance, enabling them to allocate more resources to innovation and growth.

Questions to Ask Before Selecting a Suitable Service Provider

Since the services offered by EOR, GEO and AOR seem to overlap at times, here are a few questions employers can ask the service providers to make a suitable decision:

Do they provide hiring, onboarding, and compliance services for hiring a remote employee?
Are they present in a specific country?
Can they help with legal and compliance requirements in a country where I don't have a business entity?
Can they help with a global expansion strategy?
Can they help streamline the legislative norms for a particular country for hiring an international contractor?
How much do they charge, and what are your benefits for each plan?

Select the Right Partner to Build a Skilled Workforce

Selecting the right global employment partner starts with being sure about the type of services you need. Since some of the features of EOR, GEO and AOR appear similar, it can take time to pick the appropriate service provider.

Teamed can help you with 24-hour onboarding, global payroll support, access to local benefits, compliance support in different countries, global HR assistance, IP protection, and 24/5 customer support. We understand the needs of your remote employees like nobody else can because we are people-driven, not profit-driven.

Ordinarily, you would have to set up a separate legal entity in a new country before you begin to hire. Save yourself the hassle by partnering with an EOR instead.

To learn more about how we help you set up your dream global team, book a demo today!

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