20 Best Employer of Record in Colombia: Reviewed in 2024
10 Best Colombian Employer of Record Service Shortlist
Here’s my pick of the 10 best Colombian EOR companies out of the 20 options I’ve reviewed:
Get free help from our HR software advisors to find your match.
Are you interested in tapping into the Colombian talent pool but feeling stressed about the legalities of pulling it off? I recommend using an Employer of Record (EOR) service in Colombia to manage all the legal employment responsibilities on your behalf.
A Colombia EOR service can help you hire, manage, and pay employees based in Colombia with ease. This way, you can access Colombian talent without having to open a legal entity abroad. Your EOR employees will have local support, and your operations will stay in compliance with the Ministerio del Trabajo at all times. Sounds great, right? However, which Colombia EOR service is the best one to use?
To help you narrow down your options, I’ve compiled my research into this list of the best Employer of Record services for hiring in Colombia. Keep reading to learn more about how an EOR service can support your market entry into Colombia.
Market Details for Hiring in Colombia
- Capital City: Bogotá
- Currency: Colombian Peso (COP)
- Payroll Frequency: Monthly
- Official Language: Spanish
- Approx. Population: 51 Million
- Public Holidays: 18 days
Why Hire Employees in Colombia?
Hiring employees in Colombia is rising in popularity since the cost of living is lower than in many other South American countries. This means the employer costs of managing Colombian employees are lower too.
Many companies turn to Colombia to source software developers and digital customer service reps. Its workforce is also predominantly young, making Colombia an attractive target for organizations looking to break into the South American market.
What is an Employer of Record in Colombia?
An Employer of Record (EOR) in Colombia refers to a third-party service that legally employs workers in Colombia on behalf of your company. While your organization retains control over these employees’ daily tasks and workloads, the EOR takes on the full legal responsibility for employment. As the legal employer, the EOR assumes full legal responsibility for any new hires. This includes managing payroll, deducting taxes, ensuring compliance with local regulations, administering benefits, and handling any other employee-related requirements specific to Colombia.
Partnering with an EOR service is advantageous for companies wanting to hire Colombian staff or expand their operations into Colombia since it simplifies this process considerably. Instead of requiring your HR team to master Colombian labor laws and regulations, you can delegate these responsibilities to a local EOR in Colombia and gain peace of mind that your global operations will be compliant.
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Best Employer of Record in Colombia: Pricing Comparison Chart
This comparison chart summarizes pricing details for my top Employer of Record selections for hiring staff in Colombia to help you find the best EOR service for your budget and business needs.
| Tools | Price | |
|---|---|---|
| Deel | Flat rate user pricing, with a free version for businesses with up to 200 people | Website |
| Skuad | From $199/employee/month or $19/contractor/month | Website |
| Remofirst | From $25/user/month | Website |
| Atlas HXM | From $595/employee/month or $49/contractor/month | Website |
| Velocity Global | Pricing upon request | Website |
| Globalization Partners | Pricing upon request | Website |
| Filta | Pricing upon request | Website |
| Europortage | Pricing upon request | Website |
| Remote | From $50/user/month | Website |
| Multiplier | From $20/user/month (billed annually) | Website |
Compare Software Specs Side by Side
Use our comparison chart to review and evaluate software specs side-by-side.
Compare SoftwareHow to Choose an Employer of Record in Colombia
An EOR service can solve many different challenges and simplify the process of hiring and managing staff in Colombia. To help you figure out which EOR service best fits your business needs, you need to document your specific challenges first.
As you work through your own unique selection process, keep the following points in mind:
- What problem are you trying to solve - Start by identifying the challenges you're trying to overcome, whether that's sourcing Colombian staff in specific geographic departments (departamentos), managing compliance with Colombian labor laws and tax regulations, paying employees in COP, or offering health benefits to your employees in Colombia.
- Who will benefit from the service - Consider who will manage the EOR relationship (i.e., who will your main contact people be in-house?) and how having an employer of record will improve their day-to-day work tasks.
- What is your budget - To evaluate cost, estimate how many employees you anticipate hiring in Colombia. Since EOR providers typically charge a monthly fee for each new hire, this will help you anticipate your monthly costs.
- What outcomes are important - Review the capabilities you want to gain or improve, and how you will measure success. For example, you may want to hire employees within a specific area of Colombia, such as Bogotá, making it easier for them to work together in person as needed. You could compare service providers until you’re blue in the face but if you aren’t thinking about the outcomes you want to achieve, you could waste a lot of valuable time.
- How it would work within your organization - Consider how the service provider's software ecosystem would work alongside your existing workflows and systems. Would their software framework integrate with your existing HR software, or would you face data management roadblocks?
Remember every business is different — don’t assume that a Colombian employer of record service will work for your organization just because it's popular.
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Deel
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.8 -
Rippling
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.8 -
ClearCompany
Visit WebsiteThis is an aggregated rating for this tool including ratings from Crozdesk users and ratings from other sites.4.6
Reviews of the Best Employer of Record Services in Colombia
To help you find the best EOR service for hiring Colombian employees, I’ve described my top 10 selections in detail, including the specific services each provider offers and how HR teams can use them effectively. Additionally, I’ve listed 10 more EOR service providers for Colombia below if you’d like more options to consider.
Deel
Best for offering local health benefits to Colombian EOR employees
Deel is a well-established employer of record platform that helps companies rapidly employ workers in 150+ countries, including Colombia.
Deel owns a local entity in Colombia staffed with legal experts to keep track of regulatory changes and ensure all legal obligations are met on your behalf. To hire a Colombian employee with Deel, the average onboarding time frame is 5 days.
Why I picked Deel: Deel excels as an EOR service provider in Colombia by offering streamlined contract management, ensuring compliance with Colombian employment laws. Deel also helps organizations offer localized employee benefits for Colombian staff, including healthcare coverage, social security, a pension fund, workers’ compensation insurance, and unemployment insurance
In addition, Deel has launched several new offerings over the past year, including global payroll, global mobility support, integrated Slack tools, and advanced integrations. These services, all combined, facilitate efficient and compliant hiring processes within the Colombian talent market
Deel Key Services
Deel offers end-to-end management for your Colombian employees covering everything from hiring and onboarding to termination. Their web app is user-friendly and provides a range of features to help businesses manage their remote teams effectively, including contract management and expense tracking.
Their integrated contract management function supports advanced customizations such as stipends, signing bonuses, and stock options. You can also use Deel for visa and immigration support if you want to relocate existing employees to Colombia, with Deel managing the entire visa process for your organization in-house
Deel offers 24/7 customer support and live chat and is known for its fast support.
Pros and cons
Pros:
- Comprehensive employee benefits
- Local compliance expertise
- Fast onboarding process
Cons:
- Potential complexity for first-time users
- Limited customization options
Skuad’s digital HR platform helps global employers hire, pay, and manage employees in over 160 countries, including Colombia. When you hire them as your Colombian EOR partner, they’ll manage the whole hiring process on your behalf, including creating employment agreements and other legal documents.
Why I picked Skuad: As part of their EOR service, Skuad offers remote onboarding and can facilitate payroll in multiple currencies. This includes the management of invoices as well as payroll automation. Skuad also offers robust compliance frameworks for local Columbian employment laws, including visa and immigration processes, statutory benefits, and tax obligations.
Skuad Key Services
Skuad's EOR services include remote employee onboarding, employee benefits, time-off tracking, and managing tax compliance. As part of their global hiring service, they’ll handle all the required documentation on your behalf, including work permits and visas for your new hires and their dependents.
Beyond that, Skuad can also help you distribute computer equipment to your new employees, and track company assets like phones and other IT devices.
Pros and cons
Pros:
- Comprehensive compliance management
- Extensive HR support
- User-friendly platform
Cons:
- Tax deductions limited to Enterprise plan
- Limited customization options
Best for 24/7 customer support and a dedicated account manager
Remofirst is a global EOR service provider on a mission to free employers from geographical boundaries so they can build global teams with ease. They offer EOR services in 180+ countries, eliminating the need to set up multiple legal entities abroad.
Why I picked Remofirst: If you plan to hire many EOR employees in different countries, Remofirst is a good option because of its aggregated invoice function. To simplify your payroll process, Remofirst summarizes and aggregates your EOR invoices for review, showing each EOR employee’s salary in their local currency, including Colombian Pesos (COP).
They'll automatically calculate your team’s hours, time off, holidays, bonuses, and commissions so you don’t have to worry about it. Instead, you only need to review a single monthly invoice and approve it for payment, rather than approving multiple individual invoices and payments.
Remofirst Key Services:
Their team of legal experts and HR professionals will ensure your business operations are always compliant with changing Colombian regulations, with compliance documentation accessible at all times through your secure dashboard. Their customer support team is also available 24/7 in case you need additional help. All clients also receive a dedicated account manager as their main point of contact.
On top of their EOR services, Remofirst also provides international payroll and invoice management, global benefits management (including insurance and equity plans, plus time-off management), and employee support with obtaining visas and other immigration documentation. They can even help you allocate equipment to your global employees. Pricing for their EOR services starts at $199/person/month.
Pros and cons
Pros:
- Robust employee support
- User-friendly platform
- Comprehensive compliance management
Cons:
- Service availability may vary by region
- Dependence on third-party providers for some services
Atlas HXM offers innovative companies the tools they need to compete in a global economy. As one of the largest, direct EOR service providers, Atlas HXM believes businesses should be able to employ whomever they want, wherever the talent exists.
Why I picked Atlas HXM: They're a popular choice across numerous industries, including non-profits, financial services, oil & gas, energy, life sciences, pharmaceuticals, technology, and government, and they can tailor their service offerings to your needs, whether you're a new startup, an SME, or an enterprise organization
Atlas is committed to widening the margins of entrepreneurship and employment alike. As such, their business model helps startups and SMBs compete on the international playing field—turning commercial innovations into viable global enterprises. In doing so, Atlas brings opportunities to local economies and the people who work there
Atlas HXM Key Services
Services include Colombian-specific compliance monitoring, employee engagement and productivity monitoring, and guidance on safety programs to minimize business risks
Their technology platform is supported by international experts who deliver flexible services to companies wanting to expand across borders, including into Latin America. Their services can help you onboard talent, manage compliance, and pay your global workforce without requiring a local entity or multiple third-party providers.
Pros and cons
Pros:
- User-friendly platform with localized support
- Comprehensive and customized onboarding
- Extensive local compliance expertise
Cons:
- Initial setup may require significant time and resources
- Limited customization options for specific HR policies
Velocity Global is a well-known employer of record (EOR) and professional employer organization (PEO) provider that simplifies global hiring thanks to its network of on-the-ground experts in 185+ countries, including Colombia.
Why I picked Velocity Global: I included Velocity Global in this list because of their well-known reputation for global EOR services and their expertise in navigating complex regulatory environments. They stand out with their ability to handle intricate regulatory landscapes, ensuring companies can expand efficiently without legal hurdles.
Velocity Global Key Services:
Velocity Global offers comprehensive support for their EOR clients, including everything from onboarding to ongoing HR management, backed by a deep understanding of local employment laws. Key services include payroll, compliance, benefits management, employee training, and risk management for your Colombian employee operations.
In addition to its EOR services, Velocity Global can also help you simplify your plans for global expansion or offer additional global immigration services in case you want to move international employees to another location.
Pros and cons
Pros:
- Strong understanding of the Colombian regulatory environment
- Localized payroll management
- Efficient and thorough onboarding process
Cons:
- Pricing details are not transparent
- Limited customization options
Globalization Partners (or G-P) is a leading EOR service provider that assists companies looking to hire and manage employees in Colombia. Their global HR platform streamlines international hiring, compliance, payroll, and benefits administration, ensuring a smooth onboarding process for Colombian employees.
Why I picked Globalization Partners: G-P’s sophisticated global EOR platform is designed to handle complex regulatory environments, making it easy for businesses to hire and manage employees in numerous countries, including Colombia.
New hires can be onboarded in days, with locally-compliant contracts according to Colombian laws. Using G-P, you can also pay your EOR employees in over 180+ currencies (including cryptocurrencies) using Venmo or bank transfers.
Globalization Partners Key Services
G-P offers automated onboarding processes, real-time expense reporting, and a dedicated support team, all of which contribute to their reputation as one of the best EOR services in Colombia.
Their team includes local HR experts who understand the intricacies of Colombian labor laws and cultural nuances and can also assist with global expansion plans and executing global transactions as needed.
Pros and cons
Pros:
- Easy and quick international hiring and onboarding process
- Strong compliance and risk management
- Comprehensive global employment platform
Cons:
- Dependence on platform for all HR functions
- Limited customization options
Filta, an employer of record service provider, offers tailored solutions for businesses seeking to hire nearshore employees in Colombia without establishing a local entity
Why I picked Filta: Filta has three local offices in Colombia, including Bogotá, Barranquilla, and MedellÍn. Their local experts ensure compliance with local labor laws and handle all HR complexities in the Colombian market, including the gradual transition of working days from a 48-hour standard to a 42-hour standard by 2026. They offer specialized knowledge of the Colombian labor market, making them a strong contender in this list.
Filta Key Services:
Filta offers personalized onboarding programs to help new hires integrate into their new role quickly. This both enhances employee satisfaction and retention and makes it easier for companies to build strong, cohesive teams, even with their teams working remotely.
Other services include Colombian payroll and tax compliance, local employee benefits, and remote team management tools. To ensure your Colombian team members stay on track with their responsibilities, Filta also conducts monthly catch-ups at months 1, 2, 3, 4, 5, 6, 9, and 12.
Filta can also assist with recruiting within Colombia, helping their client companies access the top talent in fields like digital marketing, design, advertising, software engineering, e-commerce, and administration.
Pros and cons
Pros:
- Personalized onboarding programs
- Specialized in remote team management
- Comprehensive compliance management
Cons:
- Possible language barriers for non-Spanish speakers
- Limited presence in markets outside Latin America
Europortage is an Employer of Record (EOR) service provider that offers extensive services in Colombia, facilitating smooth international employee management. They offer expertise in compliance, payroll, and HR management, helping businesses tap into the Colombian market without worrying about the legal hassles.
Why I picked Europortage: Though based out of Brazil, Europortage has demonstrated knowledge of the local Colombian labor market, helping companies navigate the complexities of the local HR practices with ease. In conjunction with their EOR services, Europortage can also assist with obtaining LATAM (Latin America) work visas, as needed, making them stand out compared to other EOR services in this list.
Europortage Key Services:
Europortage handles employee contracts, employee onboarding, compliance, local benefits, and payroll. As part of their EOR service, they’ll manage all required employer costs, including pension fund contributions, healthcare contributions, professional risk insurance, the family health services tax, employee benefit fund contributions, and contributions to the government education program.
Pros and cons
Pros:
- Customized services for clients
- Strong focus on compliance
- Deep knowledge of Colombian labor laws
Cons:
- May require more onboarding time
- Limited global presence compared to larger EOR providers
Remote’s global HR solution offers EOR services that simplify payroll, benefits, taxes, and compliance for international workers. You can use their services to hire full-time employees or contractors and gain local market insights
Once you’re ready to hire an employee in Colombia, Remote can complete their onboarding process within 5 days
Why I picked Remote: Remote helps companies compete for talent effectively in the Latin American market by lending access to competitive benefits packages. They can help you offer health insurance, dental insurance, vision insurance, life and disability coverage, and mental health support services for your Colombian employees. Remote also doesn’t add any markup to their benefits premiums or administration costs, making them a cost-effective choice.
Remote Key Services:
Services include global payroll processing, intellectual property and invention rights protection, and benefits packages that are tailored for the Colombian market. Their software platform also covers experience reimbursement and time-off requests, which are quick and easy to approve through their online portal.
Pros and cons
Pros:
- Strong local expertise
- User-friendly platform
- Comprehensive compliance support
Cons:
- High cost per employee
- Limited customization options
Multiplier is an employer of record company that provides HR and global payroll services to businesses, allowing them to outsource these responsibilities to a single provider. You can use their services to hire and manage employees based in Colombia and comply with changing labor laws and tax policies
Why I picked Multiplier: Multiplier helps businesses quickly and easily onboard new employees, manage their payroll and benefits, and ensure compliance with local laws and regulations. Their EOR services are very fast, with the ability to employ new talent (in certain countries) in less than 24 hours once you've decided which candidate you'd like to hire. Their 4-step onboarding process is also user-friendly, providing a good experience for your new employees.
Multiplier Key Services:
Their EOR services include payroll processing, tax compliance, benefits administration, and worker's compensation. Their team of local experts can also offer support with employee benefits management, including health insurance, retirement plans, and other perks that are specifically tailored to the Colombian market. This service helps attract and retain top talent by offering competitive benefits packages.
By outsourcing your core HR responsibilities to Multiplier, you can reduce your exposure to the legal and financial risks associated with employing workers in Colombia.
Pros and cons
Pros:
- Excellent customer service
- User-friendly platform
- Comprehensive compliance support
Cons:
- Dependence on third-party benefits providers
- Limited customization options
Other Colombian Employer of Record Services
Here are some other EOR service providers in Colombia that didn’t make it into my top 10 shortlist, but are still worth considering:
- Papaya Global
Best for an AI-based payroll engine
- Oyster HR
Best for EOR-related educational resources for clients
- Rivermate
Best EOR service for managing the local social security system
- Mercans
Best EOR service for global payroll integration
- Safeguard Global
Best EOR service for NGOs and non-profit organizations
- Ongresso
Best EOR service with a head office in Bogotá
- Serviap Global
Best for Colombian EOR and PEO services
- Gibson Watts Global
Best for Spanish-speaking client companies
- Horizons
Best for a flexible EOR contract with no termination fee
- Bradford Jacobs
Best for managing Colombian payroll taxes
Hiring in Colombia: Important Details
Here are some key details to note if this is your first time hiring staff located in Colombia. Your EOR provider will manage these compliance details on your behalf. However, proactively informing yourself of these details is always recommended before you invest your resources into sourcing staff based in Colombia.
In Colombia:
- Employment laws are set by the Ministry of Labor (Ministerio del Trabajo) in Colombia.
- You can hire employees (full-time, part-time, temporary, or seasonal) or contractors. Your Colombian EOR provider can help you determine the best hiring option depending on your needs while ensuring you avoid employee misclassification errors.
- Written employee agreements are not required by Colombian law, however, common contractual agreements include fixed-term contracts, and integral salary arrangements (where benefits are included in the salary). If an agreement is not documented in writing, it is implied that the agreement is for an “indefinite” period.
- Colombia has both mandatory payroll deductions and social security contributions that must be collected, including the following:
- Income Tax (Retención en la Fuente)
- Social Security (Seguridad Social)
- Health Insurance (Salud)
- Pension (Pensión)
- Labor Risks (Riesgos Laborales)
- Family Compensation Fund (Caja de Compensación Familiar)
- SENA (Servicio Nacional de Aprendizaje)
- ICBF (Instituto Colombiano de Bienestar Familiar)
- Spanish is the official language in Colombia. However, in total, the diverse Colombian population speaks over 100 languages, including a small portion of people who speak English.
- The standard working week in Colombia is currently shifting from 48 hours per week (circa 2022) to 42 hours (as of 2026). According to this new law passed by the Colombian Congress in 2021, the future 42-hour workweek can be spread across 5 or 6 days, with one mandatory day of rest at the end (usually on Sunday).
- Colombia uses a 13-month salary system. This equates to 12 monthly payments, plus two half-month payments paid during June and December.
- Paid vacation in Colombia starts at 15 days of annual leave per year, for employees who have worked for at least one year. Unused vacation days can be carried forward for up to two years if there is a prior agreement in place.
- There are 18 national public holidays in Colombia. Understanding and complying with employment norms and legal requirements surrounding Colombian public holidays is one area where your EOR service will shine, managing these occurrences hassle-free on your behalf.
- Colombia offers maternity leave and paternity leave.
- The maternity leave entitlement is up to 18 weeks, with the leave beginning two weeks before the expected due date.
- The paternity leave entitlement for fathers is 8 working days and begins once the child is born.
- Paid sick leave is offered in Colombia if an employee presents a medical certificate or note confirming their illness. If provided, employees can receive two-thirds of their regular pay for the first two days of sick leave. On the third day, the employee is paid by Colombia’s social security system (Sistema General de Seguridad Social).
- The probationary period in Colombia is determined by the terms of the employment contract. For fixed-term contracts, the standard probationary period is one-fifth of the duration of the contract. For indefinite contracts, the standard probationary period is two months.
- The termination terms in Colombia vary depending on the type of employee contract. Employees under a fixed-term contract must be given notice 30-days prior to the expiration date of their contract. For employees on indefinite agreements, the customary notice period is 15-days. However, no notice is required in the case of employee misconduct.
- Severance pay is offered to terminated employees in Colombia. The amount of the final severance payment is calculated differently depending on the nature of the termination, the type of employee agreement, and the number of years of service the employee has completed.
Selection Criteria for Employer of Record Colombia
Uncovering the best EOR services for this list required a deep understanding of how these services can alleviate common challenges, such as legally hiring employees abroad, managing international payments, ensuring compliance with local labor laws, providing competitive benefits, and facilitating smooth onboarding.
My approach to choosing the best EOR services is grounded in thorough research into recently published employer of record market data and an understanding of which partnerships would add the most value for organizations hoping to access the global talent market.
Here are the specific criteria I used to carefully compare the service offerings for each provider in this list:
Core Employer of Record Services (25% of total score): To be considered for inclusion in this list, each EOR provider had to offer the following basic services first:
- The corporate structure to legally and compliantly hire employees in multiple countries without a local entity
- The ability to manage global payroll and taxes in compliance with local regulations
- Assistance with offering competitive and locally compliant benefits packages
- Assistance with navigating visa and work permit processes for expatriate employees
- Robust procedures to ensure data privacy and security that comply with international standards, including GDPR and other requirements
Additional Standout Services (25% of total score): To help me narrow in on the best EOR services out of the numerous options available, I also took note of any unique or less common services, including:
- Advanced technology platforms that streamlined payroll and HR processes while still offering ease of use
- Specialized experience in hiring employees within specific new countries or key industries
- Services that enhance remote work compliance and global mobility needs
- Specialized customer support for complex immigration cases
- Assistance with international IT requirements, including managing computer equipment, software licenses, and other asset-tracking requirements
- A focus on eco-friendly and sustainable employment practices
Industry Experience (10% of total score): To evaluate the industry experience of each EOR service provider, I considered the following:
- How many years their business has operated in the EOR space
- Any industry recognitions or certifications the provider may hold in international HR and payroll
- Their depth of knowledge in local labor laws across multiple jurisdictions
- Their expertise in new markets, including how many different countries they offer local expertise in
- Evidence of a strong track record managing global expansion processes
- The combined experience and credentials of their team members, if available
Customer Onboarding (10% of total score): To get a sense of each provider's customer onboarding process, I considered the following factors:
- The availability of comprehensive onboarding materials, such as fact sheets, guides, FAQ repositories, or other training resources
- Support for integrating the EOR provider's software with existing HR systems
- Direct access to onboarding specialists, customer support, or a dedicated account manager during the setup phase
Customer Support (10% of total score): Since the EOR provider will act as your remote workers' legal employer, it's important to ensure you'll receive timely communications and top-level support. To evaluate the level of customer support each company offered, I considered the following:
- The availability of a multilingual support team that covers different time zones
- Multiple support channels, including phone, email, and live chat
- Evidence of responsiveness and effectiveness in resolving issues, as inferred from customer reviews
- The existence of dedicated account managers to provide assistance as needed
Value for Price (10% of total score): To gauge the overall value of each service, I considered the following factors:
- Transparent pricing models without hidden fees
- Comparative analysis of service offerings versus cost
- Flexibility in service packages to suit different business sizes and needs
Keep in mind that EOR services are complicated, and because of that the price tag can sometimes be high. However, the prices for their services still offer a good ROI considering the complexity of the premium-grade services you're gaining.
Customer Reviews (10% of total score): Evaluating customer reviews is the final element of my selection process, which helps me understand how happy real users are with a service. To determine this, I considered the following factors:
- Consistently high ratings across various consumer review platforms
- Specific feedback on the ease of use of the EOR services
- Testimonials highlighting exceptional customer support and problem resolution
Using this assessment framework helped me identify the employer of record services that go beyond basic requirements to offer additional value through unique services, deep industry experience, smooth onboarding, effective support, and overall value for price.
Trends in Employer of Record Services
As more businesses expand across borders, the need for efficient, compliant, and user-friendly solutions for hiring employees abroad, and managing international payments, compliance, benefits, and onboarding has never been more critical. As a result, Employer of Record services have continued to evolve, with an emphasis on technology-driven solutions that offer flexibility, comprehensive support, and innovative features to facilitate global operations.
Here are the most recent trends affecting EOR services and the HR software systems that are used to offer them:
- Immigration Support: There is a growing demand for assistance with immigration services like visa and work permit sponsorships, simplifying global talent acquisition processes for client companies immensely.
- Specialized Services for Diverse Needs: Several EOR providers have begun to offer IP and invention rights protection and equity incentive planning services, to cater to the specific needs of their client companies.
- Enhanced Employee Benefits Packages: There's a growing trend in EOR providers going beyond standard healthcare coverage to offer a full spread of enterprise-level medical and health benefits, stock options, and even one-time benefits like moving bonuses. This trend demonstrates an understanding of the importance of attracting and retaining top talent globally.
- AI-Backed Knowledge Bases: Some EOR providers (including Deel) are beginning to offer legally vetted knowledge bases or information wikis that use artificial intelligence to surface answers to common questions quickly. This helps customers source details on hiring within a specific country fast, without relying on human-run support systems.
As the market continues to evolve, these trends are likely to shape the future of international employment, making it easier for businesses to navigate the challenges of global expansion. For a closer look at specific EOR providers that are capitalizing on these trends, I recommend reading our in-depth reviews of Oyster HR, Skuad, and Deel.
Key Employer of Record Services
By leveraging an EOR service, companies can manage international payments, ensure compliance with local labor laws, provide competitive benefits, and optimize their new hire onboarding process. Here are the most important services to look for in an EOR service provider:
- Global Payroll Management: Arguably one of their most important tasks, an EOR service will ensure your employees are paid accurately and on time in their local currency. This service is essential for maintaining employee satisfaction and financial stability in diverse geographic locations.
- Tax Compliance and Withholding: An EOR service will also manage employee income tax withholdings and employer tax obligations per local laws, preventing legal issues and ensuring smooth operations across different tax jurisdictions.
- Local Labor Law Compliance: EOR service providers offer country-specific knowledge of employment laws and regulations. This knowledge protects businesses from legal disputes and fines, ensuring a respectful and lawful work environment for all employees. Knowledge of these laws also applies to monitoring employee work hours, including timesheets and time-off requests.
- International Talent Acquisition & Background Checks: An EOR service will work with their client company to source additional talent from the global market as needed. As part of this process, many EOR services include background checks for potential new hires to confirm their credentials and ensure they're suitable for their role. Once approved, an EOR will also manage your country-specific employment contracts as well.
- Visa and Work Permit Sponsorship: Many EOR providers offer assistance with obtaining necessary visas and work permits for expatriate employees. This service is critical for facilitating the legal employment of foreign nationals and ensuring a seamless relocation process.
- Onboarding and Offboarding: An EOR will also manage the processes of integrating new hires into their client's company or managing their departure. This ensures a smooth transition for both employees and the organization and gives peace of mind that employee terminations are handled as per the labor laws of each jurisdiction.
- Benefits Administration: By leveraging economies of scale, EOR service providers can access competitive, region-specific health insurance benefits packages to cover your international employees. Tailored employee benefits are crucial for attracting and retaining top talent, enhancing job satisfaction, and meeting legal requirements for employee welfare.
- HR Support and Consultation: EOR specialists are a valuable resource as they can provide ongoing human resources support and expertise on international employment practices. This support ensures that businesses can navigate complex HR issues, deal with grievances effectively, and maintain positive employee relations without affecting their employer brand.
- Risk Management and Insurance: Since EOR providers assume legal responsibility for your foreign staff, this also includes managing employment-related risks, handling workers' compensation matters, and maintaining certificates of insurance, including both professional indemnity and public liability. This coverage is vital for protecting businesses and employees against unforeseen circumstances.
- Multi-Language Support: EOR providers offer services in multiple languages to help organizations operate efficiently in a global marketplace and serve the needs of a diverse workforce. This can include translation services for your corporate policy documents, as well as localized assistance in your international employees' native language, to prevent possible miscommunications.
As you can see, EOR service providers offer a full set of comprehensive services to help businesses expand their operations globally without the burden of navigating international employment laws and practices on their own. By securing an EOR partner to cover these critical services, you'll gain peace of mind, and more time to concentrate on your core business objectives.
Benefits of an Employer of Record Service
EOR services are a savvy option for organizations looking to expand their global footprint without the complexities and liabilities associated with international employment laws and practices. For companies contemplating global expansion, understanding the benefits of partnering with an EOR can provide the clarity and confidence you need to move forward.
Here are several benefits you’ll gain by using an EOR service:
- Quick Market Entry: For organizations aiming to test new markets or hire talent in new countries where they have no legal presence, an EOR offers a swift and efficient solution to initiate operations, saving time and resources.
- Simplified Global Payroll: Using an EOR service simplifies the complex process of managing international payroll, including tax deductions, withholdings, and currency conversions for your employees worldwide.
- Global Compliance & Risk Mitigation: By managing compliance, an EOR service provides expertise in navigating the intricacies of employment laws, tax regulations, and insurance requirements in multiple jurisdictions, helping businesses safeguard their operations against compliance-related risks.
- Enhanced Benefits Negotiation: By leveraging their extensive networks and purchasing power, EORs can negotiate better international insurance rates and secure competitive benefit packages on your behalf, enhancing your ability to attract and retain top talent worldwide.
- Improved Cost Effectiveness: Using an EOR service is a cost-effective way for businesses to enter new markets, compared to the significant costs of establishing a new foreign entity. The latter option involves significant upfront legal fees, plus other costs related to office infrastructure, staffing, and local benefits and insurance coverage.
Understanding the benefits of an EOR service is crucial for strategic planning and operational efficiency. As businesses look towards international markets for growth opportunities, partnering with an EOR provider offers a streamlined, cost-effective, and compliant pathway to global expansion.
Need a bit more firepower to convince your upper management to partner with an EOR service? Focusing on the costs of hiring a foreign employee and how an EOR can simplify the hiring process might just be the winning strategy you need.
Costs & Pricing for Employer of Record Services
Typically, the cost of an EOR service follows a fee per-employee, per-month pricing model, which can vary widely depending on a range of factors. This model allows for scalability and predictability in budgeting for international expansion efforts.
In general, EOR services in Colombia cost between $599 to $2,000 per employee, per month.
Key factors that can influence the pricing of an employer of record service include:
- Geographic Location: Costs can vary significantly based on the country or countries you're hiring in. This is due to local economic conditions, labor laws, and the complexity of compliance requirements.
- Employee Seniority and Role Complexity: The level and nature of the roles being filled can also impact the monthly cost. Senior positions or roles requiring special qualifications may increase the price due to higher benefits and compensation management costs.
- Number of Employees: The total number of employees being managed can also impact the cost. In some cases, higher volumes may lead to volume discounts, making per-employee costs more economical.
- Custom Requirements: Any specific needs beyond the standard service offering may also contribute to the monthly cost. This may include customized solutions for recruitment, specialized employee onboarding, or unique compliance requirements, all of which can affect pricing.
Some EORs also operate under different pricing models, including a percentage of employee salary model, a fixed pricing model, and custom pricing models. If you'd like to delve deeper into the different factors that influence prices, my article explaining the intricacies of different EOR pricing models is a natural next step.
When considering an EOR service, it is crucial to understand how these factors impact the overall cost to ensure that the service aligns with your business's needs and budget constraints. Anticipating the specific requirements of your international expansion strategy will help you choose the most cost-effective and efficient EOR solution for your needs.
FAQs About EOR Services in Colombia
If you’ve got specific questions about the requirements to hire Colombian employees or how EOR services work, these answers to frequently asked questions are a good place to start:
What does an Employer of Record do?
An Employer of Record (EOR) service provider is a third-party entity that can help an organization hire a new employee in a country where it has no physical presence. It’s a useful service for businesses that are expanding internationally but don’t have physical offices established yet, or don’t ever plan to establish them. In these situations, the EOR provider becomes the legal employer of your remote staff on your behalf.
In this type of partnership, the EOR service provider deals with local employee-related matters such as managing payroll, deducting taxes, and administering the onboarding process for new employees. This allows organizations to access global talent while reducing their legal liabilities and compliance risks. This is because the EOR company assumes the legal responsibility for your international new hires on your behalf.
What are the minimum wage requirements in Colombia?
The minimum wage in Colombia for 2024 has been set at COP 1,300,000 per month, representing a 12% increase from the previous year. Additionally, workers earning the minimum wage are entitled to a monthly transportation allowance of COP 162,000.
This adjustment aims to address the economic challenges faced by the workforce, especially in the context of high inflation and economic contraction. The increase reflects the government’s efforts to support the financial stability of low-income workers while balancing economic growth and inflation.
To see a visual representation of these changes over time, review this graph of Colombia’s monthly wage minimums by Statista.
Do EOR providers offer other types of global HR services?
Yes, most of the time they do. Many service providers in this space also offer professional employer organization services (also known as PEO services), as well as global payroll services.
PEO services are a way of outsourcing your HR function to support your international teams. PEO companies can help you with international compliance issues, benefits administration, workers’ compensation, and other HR administrative tasks.
Global payroll services allow you to easily pay remote employees or independent contractors within a unified payroll run. They manage in-country compliance requirements and juggle payments in multiple local currencies on your behalf.
To dive even deeper into this topic, read our article covering other types of global HR services to figure out the best fit for you.
What are some of the consequences of non-compliance?
As an organization, you never want to be deemed as non-compliant in the eyes of any government body. The exact rules and regulations will vary according to the jurisdiction you’re operating in, which is one of the main benefits of using an EOR service provider.
If you don’t use an EOR and you do hire international workers, you may quickly find yourself in non-compliance. The consequences of doing so will depend on the severity of the violation, but they could include all of the following:
- Fines and penalties
- Legal actions such as lawsuits or other litigation proceedings
- Corrective measures and compliance orders
- Revocation of business licenses or operating permits
- Reputational damage if the news becomes public (loss of public trust and loss of internal employee respect)
- Increased monitoring and additional government scrutiny
Companies who fail to follow international labor laws cannot simply say they were unaware of the legalities, and hence, didn’t follow them. That’s where an EOR service can really remove a lot of potential risk and liability from the international hiring process.
To brush up on your compliance best practices, have a quick read through our 2024 HR Compliance Guide.
Are there any risks to using an Employer of Record service?
In the world of business, nothing is ever 100% risk-free, and that is true for EOR services as well. While EOR services do offer substantial advantages, here are some of the risks you should also be mindful of as you choose the right partner for you:
Financial risks:
- Hidden costs and service fees: Some EOR providers may charge additional service fees for specific tasks, such as processing documents, onboarding or offboarding employees, or providing additional HR advice.
- Mandatory benefits: Some countries require mandatory benefits for employees. In that case, the EOR will charge you for those benefits in addition to the employee salary and their service percentage, which can add up.
- Currency fluctuations: Exchange fluctuations can impact the cost of payroll and other financial transactions as the strength of a currency you’re using goes up or down.
Operational risks:
- Data security: Since you’re entrusting sensitive employee data to your EOR, you’ll want to consider the strength of their data protection practices and policies, including their incident response plans, IT penetration testing, and data management certifications, such as ISO 27001.
Strategic risks:
- Loss of control: You will need to relinquish some degree of control over the workforce management processes of your EOR employees, which may impact your organization’s strategic decision-making capabilities.
- Brand reputation: Any negative actions, incidents, or practices of your chosen EOR can directly impact your organization’s brand reputation and create a negative employee experience if not handled properly.
For a deeper dive into this topic, read our comprehensive guide to EOR risks, including strategies to mitigate each potential issue upfront.
What is a nearshore vs offshore employee?
A nearshore employee is based in a country closer to the company’s location, typically within the same or a nearby time zone, making collaboration and communication easier due to the smaller time difference.
For North American companies, nearshore remote workers may reside in Canada, the Caribbean, or Central or South America.
An offshore employee is located in a country far from the hiring company’s home base, often in a different time zone, to capitalize on cost savings and increase access to a broader talent pool.
For North American companies, offshore remote workers may reside in Asia, Africa, or Europe.
Gain Access to the Best Talent with an EOR in Colombia
If you made it this far, I hope you have a better sense of how EOR services can simplify the process of hiring Colombian employees. They're truly a valuable resource, whether you're an enterprise organization looking to snap up the top talent in Colombia, or a small business or startup trying to break into the Colombian talent marketplace without launching your own entity.
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