After years of being the darling of private investors and venture capitalists, startups suddenly find themselves in a position where they must put profitability first.
Tech firms have long pursued expansion at all costs, but investors are increasingly directing them toward profitability. Entrepreneurs are rethinking their company models in this new startup environment and how they acquire employees.
Building the finest team possible has become more important as entrepreneurs shift their business strategy, but one thing hasn’t changed: startups still need the best minds to thrive.
The current economic environment for startups and their employment practices also brings to light the adaptability of employer-of-record (EOR) solutions.
EOR in a new startup environment
An organization known as an Employer of Record (EOR) assists startups and the technology sector in managing the legal, HR, tax, and local compliance requirements in any nation where they do not currently have operations.
This implies that a firm with headquarters in Europe may employ local talent in Asia without opening an office there.
The EOR will serve as the client’s official employer, overseeing employee onboarding and compensation during this hiring process.
We examined some of the most significant developments in EOR in a whitepaper Atlas released in June.
Technology firms may manage their worldwide people operations in one location thanks to Atlas’ Human Experience Management (HXM) platform. While outsourcing employment duties may seem the answer, that is far from the truth.
The firm is still in charge of hiring new workers and overseeing their day-to-day management, even if the EOR is the official employer, and assists businesses without local operations in managing employees’ legal and financial obligations in remote areas.
An EOR solution makes it simpler for startups to manage such personnel at a time when remote work has become the standard for knowledge workers everywhere. To “fully realize the potential of tomorrow’s globalized workforce,” according to Atlas, companies require an EOR partner.
In other words, an Employer of Record (EOR) partner aids startups in assembling a group of people with various skill sets from different nations who are managed remotely and receive full organizational support.
EOR: A wise decision for Europe
European tech equities benefited throughout the epidemic, but the area has suffered a decline in venture capital this year and a significant reduction in value.
Due to this, European digital firms are now compelled to grow into new areas, innovate, and become profitable.
According to Atlas, organizations in the European technology landscape must implement the proper talent strategy.
Due to the hybrid labor market’s limited supply, high demand, and high staff turnover, the only option for businesses to stand out is by providing flexibility. According to Atlas’ whitepaper, one benefit of using a global labor pool is that organizations can address their largest problem, the skills gap.
In its whitepaper, Atlas claims that “for startups, broadening the talent pool also helps them fight for attention alongside heavyweights with established reputations and wallets.”
To secure their future, European digital companies must develop creative hiring strategies that won’t significantly affect their bottom line or complicate their HR, payroll, and legal operations.
Digital European companies can make HR a strategic department using an EOR solution like Atlas’s. This will make sure that “hiring processes are handled correctly and overcome unexpected challenges around compensation, location, and regulation.”
Stability and Growth
In addition to assisting businesses in remaining compliant with local rules, Atlas’ EOR service also eliminates uncertainties.
With over 300 customers utilizing its EOR solution, Atlas has established itself as a reliable EOR partner and a supporter of startup growth.
This was made clear during the epidemic when every nation had its unique lockdown policies restricting access to facilities, working hours, and social interaction.
This meant that organizations had to deal with the laws of each nation and could have needed personnel on the ground to ensure smooth functioning.
Customers of Atlas’ EOR service were able to avoid having a person on-site during the pandemic. They got information relevant to their nation that was important for the safety and security of employees.
Many international organizations that had difficulties, such as stranded workers who could not return home because of swift changes in visa or work permit status during the epidemic, found an EOR service helpful.
Atlas’ whitepaper says, “Hiring a local advisor is the same as hiring an EOR.” This capacity to deliver stability is not confined to situations like pandemics; EOR services can assist organizations in employing ethical hiring and compensation practices if their business experiences economic volatility.
Creating a legal corporation for any business intending to enter a new market can take around five months. It may take up to two years and be pricey in China and South Africa, and some nations require corporations to maintain a specific amount in local banks.
While large organizations can handle this legal procedure, startups must avoid it in order to move quickly and spend less money on unproductive opportunities.
According to Atlas, “Partnering with an EOR means that you can start hiring in new markets in days or weeks rather than months.” An EOR solution like Atlas may assist technology firms in building a diverse and inclusive staff by assisting with anything from overcoming language obstacles to developing a global perspective.
“Since hiring the first person, we’ve added two more employees to our virtual UK office through Atlas’ Direct EOR platform,” explains Katie Kokkinos, Chief Operating Officer of Vetspire. We were able to provide our UK staff with the services they require, largely thanks to their expertise in HR compliance and regulatory obligations.
The startup ecosystem knows that the talent involved in creating and delivering the product determines whether it succeeds or fails. Talented individuals are dispersed internationally, making finding and retaining personnel difficult. As a result, companies should include an EOR service in their business plans from the beginning.
