5 red flags to spot when evaluating an EOR vendor

There are so many EOR providers to choose from. So it can feel like a minefield trying to find the right one. We’ve already covered what you should look for in an EOR partner. But what about the stuff to avoid?

Luckily, there are some big red flags to watch out for. If you spot them, don’t ignore the alarm bells ringing in your head. They might come back to bite you in the future.

And if you see these red flags once you’ve already signed the dotted line, don’t worry. It’s really easy to switch providers, even after onboarding employees.

So without further ado, here are the 5 things to avoid when choosing an EOR:

They cut corners to speed things up

Speed is important. But not at the cost of employee experience or compliance. Some EOR providers rely so heavily on automation that they can get your new hires onboarded and offboarded at breakneck speed.

But global employment shouldn’t be fully automated and can’t always be quick. After all, there’s a human at the end of that tech. And they’re often starting (or ending) a job completely remotely, far away from the central office. That can be pretty scary, and tech alone doesn’t provide enough support.

You also have to consider the complexity of local laws and regulations. There’s no way to cut corners on compliance. It’s a lawsuit waiting to happen.

So next time you see an EOR rely solely on automation or suggest ways you can get around local laws, make a U-turn ASAP.

Tech is great, but you need human expertise to keep your business and team out of harm’s way.

Their product tries to be & do everything

Are they offering a catch-all solution to global recruitment, employment, HRIS, employee engagement, and everything else under the sun? Our advice: Run.

“Jack of all trades, master of none” springs to mind here.

Your chosen provider should be an expert in EOR. That goes without saying. But to be an expert, they can’t possibly offer a huge variety of different products too. It’s far better for providers to focus on their specialty. Then they can partner with incredible businesses to help you with other aspects of building a global team.

Besides, you don’t want to be left paying a premium for many tools and features you don’t actually use.

They make claims too good to be true (or just downright shady!)

If your EOR promises the world, they’re probably exaggerating their offering.

“Onboard any employee in just a few days!” It’s a nice thought, but sadly, global compliance doesn’t always play ball. Every case is different, so EORs can’t make such clear-cut guarantees and stick to them.

But even worse than inflated promises are shady claims. We’re talking about EORs that can help you “avoid taxes” (yikes!), tell you that you don’t have to pay local employer costs as a foreign business, or say they’ll squeeze in payroll outside of an employee’s contract.

These are huge red flags. And they could put your business at significant risk. Avoid at all costs.

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They have super-low prices & offer big discounts

Budgets are tight, and discounts are tempting. But don’t put cost above everything else—especially when choosing your EOR.

EORs cost money because they help you solve a really complex issue (i.e., employing talent abroad when you don’t have a legal entity). And to do that, EORs need a team of experts to ensure you and your international hires receive a high-quality, compliant service.

If an EOR provider offers super-low prices or huge discounts, they have to cut corners elsewhere. At best, it could mean your international team receives a poor experience. At worst, it could lead to a lack of compliance, putting your business at risk.

When evaluating an EOR, you need to think about the total cost instead. This includes things like time savings, flexibility, and accuracy. That’s harder to put a price tag on, but it will save you more money in the long run.

They’ve already come under fire for bad hiring practices

Would you take driving lessons from someone who keeps crashing their car? Probably not! The same goes for EORs.

If a provider has used inappropriate hiring practices for their own team members or their clients, that’s the biggest red flag of all.

Whether they’ve been in the news for employee misclassification or a former client has warned you of bad practice, it’s best to stay far away. The risk isn’t worth it, no matter how great the product looks from the outside.