Why Small mid-size Businesses Switch to an Employer of Record

Employer of Record (EOR) services are essential in outsourcing talent in Mexico. Learn how it affects Industry 4.0 and the future of work.
REMOTO WORKFORCE Team I Updated on - December 2, 2022

For decades, companies have been trying to figure out ways to expand their reach and get more talent. However, the advent of employer of record (EOR) services in the US has created a new way for small and medium-sized businesses to recruit high-quality talent from Mexico.

In this blog post, we’ll discuss what EOR is and why businesses in the US are turning to these services for their recruitment needs, mainly with remote employees from Mexico. We’ll also explore the role of EOR services in the future of work and Industry 4.0.


Employer of Record (EOR), Explained

An EOR is a third-party organization that handles all aspects of employment, including hiring and recruiting workers. 

Typically, an EOR acts as an employer on behalf of the company, including taking all legal responsibilities related to hirings, such as payroll taxes, benefits administration, and compliance with labor laws. Likewise, EOR helps companies with all paperwork.

The EOR market in the US is constantly expanding and will continue to do so in the future. For example, the latest reports from Proficient Market Insights reveal that this market will reach US$6,694.4 million in 2028. 

In addition, the growing EOR market shows how outsourcing is gaining popularity because of advantages like lowering costs, enhancing productivity, and ensuring a collaborative workplace.

Watch this video to deepen your understanding of outsourcing



The State of Talent in Mexico 

The US has a long history of hiring employees in Mexico to work in various industries, including agriculture, manufacturing, and technology. This is due to many benefits for employers and employees and geographical and cultural affinities.

For businesses, hiring remote employees from Mexico with EOR services can be a cost-effective way to staff a company. 

Remoto Workforce can help you get a reduction of 70% in payroll expenses while offering qualified talent in all industries with fluency in English, a strong work ethic, and reliability.

For employees, working remotely for a company in the US can allow them to earn a higher wage than would be possible in Mexico. Working for US companies can also allow workers to improve their English language skills and gain valuable experience. Overall, hiring remote employees from Mexico can be a win-win situation.

These advantages explain why outsourcing remote work in Mexico has become a popular alternative for small and medium-sized businesses wishing to save expenses and boost productivity. According to many experts, Mexico could also help fill the US talent gap via nearshoring.

Bismarck Lepe also asserts the US can generate economic opportunities domestically and beyond through outsourcing. With this in mind, Lepe suggests that outsourcing can correct labor inequalities in the US and Mexico.

Also, women’s inclusion in Mexico can be deepened through outsourcing as well. Tom Scott believes recruiting female talent in Mexico is crucial for tech companies striving to achieve equality. 


According to many experts, Mexico could also help fill the US talent gap via nearshoring.


The importance of an EOR In The Future Of Work and The Industry 4.0

Industry 4.0, more commonly referred to as the fourth industrial revolution, is when companies change how they make and send out goods using technology. The technologies that comprise this process usually automate most tasks and foster collaborative and smart work environments.

The fourth industrial revolution is transforming the workplace, raising questions about the future of work. Another key issue is the high demand for skilled workers in the technology sector to improve productivity and expand markets.

Technologies such as AI, XR technologies, and the Internet of Things (IoT) have effectively improved customer experience and generated more collaborative and diverse work environments. These improvements result in a higher demand for workers proficient in these technologies.

EOR services help companies find the talented workers they need to meet rising demands. This makes them very important in Industry 4.0 and the future of work. Mexico, for instance, is especially good at supplying talented workers in technology and computer science for this country’s recognition as a place where these fields’ talent is highly qualified.


Why Small mid-size Businesses Switch to an Employer of Record - Remoto Workforce


The advantages of EOR services in Industry 4.0 and the future of work are clear. Small and medium-sized businesses in the US will probably switch to EOR companies to move further into the 21st century.  

If you’re looking for a reliable partner to help you manage your recruitment processes with employees in Mexico, contact Remoto Workforce Today. With so much change, it’s important to be proactive about finding the right employees–let us show you how easy that can be.

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Remoto Workforce strengthens small- to mid-sized companies in the US and Canada by offering top-tier outsourced recruiting and hiring of remote employees in Mexico.

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