According to the Global Risk Report 2024 by the World Economic Forum, nearly two-thirds of respondents believe that a global recession is likely in the coming years. While many economic analysts expect the downturn to be relatively mild and short-lived, businesses are already taking proactive measures to mitigate its impact.
In this challenging economic climate, companies are turning to innovative strategies to reduce hiring costs while maintaining sustainable business growth. One increasingly popular solution is using Employer of Record (EOR) services, which enable businesses to access diverse and affordable talent pools without the need for setting up a legal entity. By leveraging an EOR, companies can efficiently hire Indonesian employees and other global talent, minimizing turnover and ensuring compliance with local laws.
The Employer of Record industry is expected to grow significantly, from $4.2 billion in 2021 to $6.8 billion by 2028, with a 6.9% compound annual growth rate (CAGR). As more companies adopt global hiring strategies through EOR services, the market is set to expand even further in the years ahead.
What does an Employer of Record (EOR) do?
Embracing remote and global workforces offers numerous benefits for both business leaders and employees. These include healthier, happier, and more productive employees, which, in turn, contribute to a better return on investment (ROI). However, managing a remote team also introduces more complex HR and compliance challenges.
This is where the Employer of Record (EOR) solution shines. EOR services are becoming increasingly popular for businesses aiming to reduce compliance risks while maximizing flexibility in the ever-evolving global work environment. For instance, the Livit EOR service in partnership with PT. Solusi Pragmatis Indonesia allows you to hire Indonesian employees quickly, avoiding the legal and financial burden of establishing a company—a process that would otherwise require a minimum investment of 10 billion rupiah (approximately US$696,000).
By partnering with us, you can expect comprehensive Employer of Record (EOR) services, ensuring full compliance with local labor laws and government regulations. Our EOR solution covers:
- Payroll management, ensuring adherence to local government agencies and regulations
- Handling all tax obligations, including both employee payroll taxes and business tax compliance
- Offering a competitive benefits package for your employees
- Full HR services, managing employee work hours, vacation days, and sick leave
- Drafting of locally compliant employment contracts to meet legal requirements
How does Livit Employer of Record (EOR) reduce your global hiring costs?
1. Reduce payroll costs. With over 10 years of experience in HR services and global recruitment, we prioritize security, cost-effectiveness, and full compliance. By outsourcing your payroll management to us, you immediately cut costs. Additionally, we leverage advanced payroll automation technology and maintain a low employee turnover rate thanks to our deep understanding of the local job market—further driving your costs down.
2. Oversee effective employee benefits management. Recognized as one of the Top 5 companies in Indonesia and Top 25 in Asia by Great Place to Work®, Livit brings its best practices to streamline your hiring process without the hassle or budget overruns. We assist you in analyzing employee benefits usage, assigning the most suitable plans—such as healthcare packages—while keeping administrative costs as low as possible, all without sacrificing quality.
3. Reduce Human Resources (HR) costs when hiring in Indonesia. Managing local employees requires an experienced HR team, but with Livit’s Employer of Record (EOR) service, you can avoid pulling resources from your internal HR team or exceeding your hiring budget by setting up an in-house department. By partnering with Livit EOR, you only pay for the HR services you need, eliminating the overhead expenses of maintaining full-time HR staff.
4. Save on the hefty upfront investment required to set up a company in Indonesia. As mentioned, the minimum capital requirement for a foreign investment company is at least 10 billion rupiah (approximately US$696,000), and the administrative costs of establishing a company start at USD 2,500. By choosing Livit’s Employer of Record (EOR) services, you can reduce these administrative expenses by more than 80%, allowing you to hire in Indonesia without the high setup costs.
The Bottom Line
Livit Employer of Record service, in partnership with PT. Solusi Pragmatis Indonesia, offers a cost-effective solution for global hiring, especially for businesses looking to tap into the Indonesian market. By outsourcing critical functions like market research, tax compliance, and payroll management, you can reduce not only your hiring budget but also save valuable time and resources. If your company is aiming to expand internationally without the resources to establish an offshore presence, Livit EOR is here to support your global expansion.
In short, an Employer of Record is absolutely worth the investment!
