In an increasingly competitive HR industry, staying relevant requires adaptability and strategic thinking. A key factor that makes HR companies stand out is their ability to offer a comprehensive benefits package to attract and retain top talent. Employer of Record (EOR) services are game-changers that simplify and enhance the benefits landscape for HR companies. In this blog post, we'll take a look at the current state of HR company benefits delivery and how EORS can provide alternative benefits solutions.
How do staffing companies typically provide benefits to temporary workers?
Recruitment companies that opt for "do-it-yourself" often have limited options when it comes to benefits. Due to the strict regulations imposed by the Affordable Care Initiative (ACA), staffing companies must adhere to high standards. Unfortunately, these rules are supposed to apply to ordinary employers, such as hospitals, manufacturers, and software companies; Not a recruitment company. Still, the law applies to them.
In order to comply with the ACA and still be able to provide HR services at an affordable** rate, many staffing companies partner with insurance brokers to obtain minimum essential insurance (MEC) and minimum value plan (MVP) benefit products. These plans will often "check" the ACA, but will not provide full coverage for temporary workers. This type of insurance option reduces the value of temporary positions and makes candidates choose to work full-time more often or even with lower wages but better benefits. This puts HR companies at a competitive disadvantage.
Why buying power is important
Most staffing companies are small and medium-sized businesses. They typically assign fewer than 100 candidates, which means they have limited purchasing power. As a result, they are often barred from receiving the full range of benefit products because they are too expensive.
Conversely, an Employer of Record (EOR) business partners with thousands of companies and customers, which increases its workforce to thousands. Having so many employees increases purchasing power and allows EOR to provide health benefits to temporary workers and employees at a much lower**. The cost of these benefits is passed on to the relocation agency client at a much lower cost than the client's own, ultimately making the relocation company more competitive.
useeorBenefits of realizing health benefits
Access to a wider range of benefits:
EOR often has a relationship with a benefit provider and can use its size to provide a wider range of benefits. From health insurance and retirement plans to health plans and career development opportunities, EOR enables HR companies to offer competitive benefits packages that appeal to a diverse workforce. This opportunity to access a comprehensive benefits package can be a valuable tool for attracting and retaining top talent.
Cost Savings & Availability:
Managing internal benefits can be costly and undesirable for staffing companies, especially when dealing with fluctuations in headcount. EOR uses a more cost-effective model that enables agencies to better plan and allocate resources. The economies of scale achieved by EOR can translate into cost savings, and it makes financial sense for relocation companies to leverage these services to provide a robust benefits package.
Administrative Efficiency:
EOR excels at handling administrative tasks related to employee welfare. From registration and claims processing to payroll deductions, the burden of paperwork is lifted off the shoulders of a staffing company. This administrative efficiency not only saves time, but also minimizes the risk of errors, ensuring that employees receive benefits in a timely and accurate manner.
Mitigation of Employer Liability:
HR companies often have to deal with the inherent risks that come with being the direct employer of their workforce. The EOR takes on a significant portion of that responsibility, including legal liabilities related to taxes, insurance, and compliance. This risk mitigation allows HR companies to focus on business development and customer satisfaction, with the confidence that their workforce is being managed in accordance with all relevant laws and regulations.
Next steps for health benefits:
In the competitive world of HR, offering attractive benefits is a strategic imperative. EOR services become a key ally, streamlining processes and improving the benefits profile of HR companies. The benefits of working with an EOR are manifold, from compliance and access to broader benefits to cost savings and increased management efficiency. By adopting these services, HR firms are able to successfully attract, retain, and enhance their most valuable asset – a talented workforce.