Hire International Talent becomes an obstacle when opening a company in a country where you don’t understand the habits of the people, government regulations, and how business works in that country.
Because of this, many international companies run out of money when you need local employees with international skills. In the end they use Employer of Record (EOR) to recruit employees.
Employer of Record (EOR) helps companies employ local residents and remain fully compliant. You will get help with HR Administration, Talent Acquisition, and Payroll process. So you just need to think about how the business will operate afterward.
➡ Learn more about Employer of Record (EOR) services from Abhitech in our detailed overview.
Why Hire International Talent for Your Indonesian Operations?
1. Skill Gaps in Indonesia
Despite the availability of a large workforce, certain specialized skills, particularly in fields like technology, engineering, and finance, are still developing in Indonesia. Hiring international talent ensures you have access to the expertise required to drive your business forward.
2. Extensive Global Networks
International talent often brings a wealth of experience and a broad network of connections that can benefit your business in Indonesia. Leveraging these connections can open up new opportunities and partnerships that may not be available locally.
3. Innovative Perspectives
Bringing in talent from different parts of the world introduces new perspectives and innovative ideas. International employees often bring diverse approaches to problem-solving and creativity, which can lead to unique solutions and advancements in your business processes.
4. Enhanced Competitiveness
Hiring international talent can significantly boost your company’s competitiveness. These individuals often possess cutting-edge skills and knowledge of global best practices, enabling your business to stay ahead of industry trends and competition.
What Does an Employer of Record in Indonesia Do for Hiring?
An Employer of Record (EOR) is an essential service provider for foreign companies looking to hire international talent in Indonesia. This entity takes care of all the legal and administrative work involved in hiring and managing employees, enabling companies to focus on their core business operations.
1. Payroll and Benefits Management
An Employer of Record (EOR) handles all aspects of payroll, ensuring that employees are paid accurately and on time. They also manage employee benefits, such as insurance and retirement plans, in compliance with local laws.
Benefit: This service ensures that payroll processes are streamlined and that benefits packages are compliant with Indonesian regulations.
➡ Explore our comprehensive Payroll and Tax Guide for Indonesia.
2. Tax Compliance
Employer of Record (EOR) manages all tax-related obligations, including withholding and remitting taxes, as well as filing returns. This includes handling income tax, social security contributions, and any other applicable taxes.
Benefit: This ensures that all tax obligations are met accurately and timely, reducing the risk of legal issues and fines.
➡Discover in-depth insights in our Payroll and Tax Guide for Indonesia.
3. Legal Compliance
Employer of Record (EOR) ensures that both the business and its employees comply with all relevant labor and employment laws in Indonesia. This includes managing employment contracts, obtaining work permits, and ensuring visa requirements are met.
Benefit: This reduces the risk of non-compliance with local laws, which can result in significant penalties.
4. HR Support for International talent
Employer of Record (EOR) provides comprehensive HR services such as recruitment, onboarding, and managing employee relations. They can also assist with performance management and employee development.
Benefit: This allows companies to focus on their core business activities while the Employer of Record (EOR) handles the complexities of human resource management.
➡ Learn about the range of HR Services provided by Abhitech in Indonesia.
5. Visa Support
Assist in obtaining necessary work permits and visas for international talent, handling the entire application process to ensure compliance with immigration laws.
Benefit: This reduces the complexity and time involved in securing work permits, allowing international employees to start work promptly.
➡Find out more about visa support and work permits in our guide to Work Visas and Permits in Indonesia.
International companies can now efficiently hire international talent while ensuring compliance with Indonesian laws and regulations through the use of an Employer of Record (EOR). This strategic partnership allows businesses to confidently expand into the Indonesian market with minimal administrative burden.
5 Steps to Hire International Talent for Your Business Expansion in Indonesia Using Employer of Record (EOR)
Step 1: Evaluate the Strengths and Weaknesses of Each Potential Partner
Make sure your Employer of Record (EOR) partner understands the important things below:
- Payroll Services for efficient salary distribution and invoice payments.
- Ongoing Legal Support to smoothly navigate Indonesian employment law.
- Intellectual Property protection and strong data security measures.
- Easy Onboarding Experience for onboarding new employees.
- Comprehensive Benefit Solutions covering health, retirement, and more.
- Transparent and Fair Prices.
Ask these questions of your potential Employer of Record (EOR) partner, to ensure your Employer of Record (EOR) provider is a good fit to work with you.
Step 2: Choose the Right EOR Service Provider After Careful Consideration
Make sure the Employer of Record (EOR) provider understands the region, especially one with a proven track record. Choosing an Employer of Record (EOR) with experience in Indonesia will be very profitable for you to expand into the Indonesian market.
Selecting the right Employer of Record (EOR) provider is crucial to ensuring the success of your expansion into the Indonesian market. Make sure the Employer of Record (EOR) you choose is ISO certified, which ensures they meet international standards for safety and quality. Additionally, choose an Employer of Record (EOR) who has been operating in Indonesia for decades, as this long experience demonstrates their ability to understand and navigate local regulations and adapt to Indonesian business culture.
Step 3: Previous customer testimonials
You can check whether your partner has worked with any company before. This can help you filter the quality of your Employer of Record (EOR) partners.
That’s why Abhitech created a testimonial partner here.
Step 4: Work Together for Fair Wages and Benefits
When working with your Employer of Record (EOR) service provider, make sure you offer fair and reasonable wages. Determining your salary is sometimes a bit complicated because there are different factors such as the cost of living and also labor laws in Indonesia.
Ask your Employer of Record (EOR) service provider if they can provide competitive salaries and benefits based on job, skills, and experience. This is important to help you get the criteria for attractive employees.
Step 5: Protect Your Intellectual Property and Data Security
The next step is to ensure your Employer of Record (EOR) is committed to keeping your ideas safe and your data protected. Your Employer of Record (EOR) should also be able to create employment contracts that clearly state that your company owns new ideas generated by your remote employees. This helps avoid legal problems in countries where you may not be familiar with existing rules and regulations.
Why you should hire an Employer of Service (EOR) than a Professional Employer Organization (PEO)
1. No Minimum Employee Requirements
One of the main advantages of an Employer of Record (EOR) is the flexibility in the number of employees that can be hired. Employers of Record (EOR) do not have minimum employee requirements, unlike Professional Employer Organizations (PEOs) which often require companies to have a certain number of employees before they can use their services. With an Employer of Record (EOR), you can hire as many or as few employees as your business needs, providing greater flexibility for startups or growing companies.
2. Hire Full-Time Employees Without Establishing a Local Entity
Employer of Record (EOR) allows companies to hire full-time employees in another country without having to set up a local entity. The process of setting up a legal entity in a new country can be time-consuming, expensive, and complicated. Employer of Record (EOR) handles all the legal and administrative aspects of hiring international employees, including legal compliance, payroll, and taxes. This means companies can focus on their core business operations without having to worry about local bureaucracy.
3. Faster Business Expansion
Employer of Record (EOR) allows companies to expand internationally more quickly than PEOs. With an Employer of Record (EOR), companies can immediately hire employees in multiple countries without having to wait for the lengthy and complicated process of setting up a local entity. This enables companies to quickly enter new markets and start operating, so they can respond to business opportunities more agilely and efficiently.
Conclusion
By using Employer of Record (EOR) services, international companies can recruit international talent efficiently while ensuring compliance with Indonesian laws and regulations. This strategic partnership allows businesses to expand into the Indonesian market with confidence and minimal administrative burden.
If you need EOR solutions for your business expansion in Indonesia, visit Abhitech for further information and the best services to support your business success.
