Employee experience is an employee’s journey in a workplace, which includes hiring, onboarding, interactions with co-employees and other entities in the office. A positive employee experience increases the business profitability by boosting the employees’ productivity, loyalty, and retention rate.
Employee experience depends upon several factors, such as the communication and transparency, employee recognition programs, the company’s culture and values, and competitive benefits. Transparent communication increases employee retention rate by 55% according to the research of the Edelman Trust Barometer. The career development programs in the businesses keep the employees motivated and satisfied while decreasing the turnover rate.
Employer of Record (EOR) is a third-party organization that acts as a legal employer on behalf of companies to hire employees from all over the world. Businesses take services of EOR to streamline their onboarding processes, manage payroll, ensure compliance with labor laws, and provide access to competitive packages. The trend of hiring EOR is increasing with time, as the global market value of EOR was USD 5.23 billion in 2024, which will touch USD 9.17 billion by 2033, according to the Business Research Insights.
The EOR is different from POR (Professional Employer Organization) as it acts as a legal employer and does not require registration of a legal entity in any country to hire employees. The EOR helps businesses in global expansion by hiring international employees, handling all the HR functions like payrolls, bonuses, deductions, and complying with the labor laws of the respective countries.
What is employee experience?
Employee experience is the cumulative experience of an employee that starts from hiring, the training, the upskilling, promotions, and practicing their skills. It also includes employees’ interaction with coworkers, human resource managers, culture, technology, leadership, and environment of the workplace. The employee experience covers the emotional response and observations of workers about the digital tools, benefits, payments, onboarding, and outboarding rules of the organization.
Why is employee experience important?
Employee experience is important as it affects the employees’ performance and the business success. A positive employee experience boosts the engagement, productivity, and retention rate of employees, which leads towards the substantial growth of businesses. There was a 23% higher profitability and 51% lower turnover in the companies with higher employee engagement, according to Gallup’s 2020 meta-analysis of the relationship between employee engagement and company performance.
What are the factors that affect employee experience?
The factors that affect employee experience are communication, transparency, employee recognition, career development opportunities, company culture, values, benefits, and compensation. The companies spending only 1% on employee recognition observe benefits, such as 21.5% more enabled employees, which will increase the productivity of the overall business, as per reports of the Society for Human Resource Management (SHRM) and Globoforce’s Fall 2012. These companies have 23.4% lower turnover rate, which will result in lower hiring and training costs, increased loyalty, and satisfaction of employees.
The most important factors that affect employee experience are listed below.
- Communication and transparency
- Employee recognition
- Career development opportunities
- Company culture and values
- Compensation and benefits
Communication and transparency
Communication and transparency at the workplace are practices in which companies share information openly, have clear communication channels, and make an employee’s feedback loop. The transparent and clear communication builds trust between the employees and the leadership of companies, resulting in increased loyalty towards the objectives of the companies. There is a deep connection between transparency of leadership and trust of employees, according to the survey of 86% of 14,000 HR and business leaders, as per reports of Deloitte’s 2024 Global Human Capital Trends.
Employee recognition
Employee recognition is an act of acknowledging, appreciating, rewarding, or giving feedback based on their performance, efforts, and contributions towards the overall business. The employee recognition is done both publicly and privately, formally, and informally, by giving a bonus, promotion, or a raise. It builds a strong workplace community and boosts the employee’s loyalty towards the organization. The employee recognition increases the fulfillment by 366% and community formation by 208% as stated in Forbes.
Career development opportunities
Career development opportunities are the programs and processes that allow the employees to reach higher ranks in organizations. The career development opportunities include upskilling through training programs, mentoring, certifications, feedback system, appraisals, in-house training, networking, workshops, and conferences. These opportunities keep the staff motivated, boost their job satisfaction, and keep them updated with the industry trends and innovations. Providing career development opportunities improves the retention rate of the workers. For instance, 63% of US workers left jobs due to the low career development opportunities, as mentioned in the Pew Research Center report Top reasons why U.S. workers left a job in 2021.
Company culture and values
The company culture is the set of beliefs, assumptions, behaviors, and attitudes shared by all the employees at a workplace. The company values include integrity, collaboration, innovation, and customer focus. 94% of executives and 88% of employees believe a positive workplace culture is necessary for business success, as per reports of Deloitte.
Compensation and benefits
The compensation and benefits are the monetary and non-monetary perks at the workplace that include wages, salaries, health insurance, vacation time, bonuses, commissions, Paid Time Off (PTO) and pension plans. The compensations fulfill the basic needs of employees while benefits and rewards are linked with the achievement of specific goals. The combination of compensation and benefits maintains a vibrant and positive environment at the workplace.
How can you enhance employee experience with an EOR?
You can enhance employee experience with an Employer of Record (EOR) by streamlined onboarding processes, reliable payroll and HR processes, and access to competitive benefits. The Employer of Record (EOR) is a third-party company that handles all human resource responsibilities, such as onboarding, payroll system, management, support system, and offboarding. By hiring the Employer of Record (EOR), the employer organization does not get involved in the Human Resource Management (HRM) and focuses on other core matters.
You can enhance the employee experience with EOR through the following ways:
1. Streamlined onboarding processes
2. Reliable payroll and HR
3. Access to competitive benefits
4. Compliance with labor laws
Streamlined onboarding processes
The streamlined onboarding process refers to the smooth and efficient process of introducing the new employees to the role, company culture, responsibilities, and environment of a company. The EOR handles all the administrative paperwork that includes the employment contracts, tax forms, and compliance documents of a business. The EOR has a standardized onboarding process which provides employees a simplified and consistent experience.
Reliable payroll and HR
The reliable payroll and HR refers to a human resource management system that provides accurate employee compensation, such as payrolls, deductions, taxes, and on-time paychecks. The reliable payroll and HR of EOR reduces the chances of mistakes in the payrolls and tax regulations, which will protect businesses from legal penalties and build trust of employees on the employers. The EOR also helps employees through financial stability and transparency in pay structure.
Access to competitive benefits
The competitive benefits are perks other than compensation, such as the health insurance, retirement plans, work-life balance, and allowances. The EOR provides competitive packages in terms of salary and allowances, which align with market rates and employee expectations. The EOR helps businesses in negotiating with the better pay rates and other settlements with the employees.
Compliance with labor laws
Compliance with labor laws refers to satisfying all the legal requirements of the country while recruiting and managing the employees. The EOR protects businesses from legal penalties and fines by adhering to local labor laws while making employment contracts, payrolls, taxations, and job security policies. It also regulates the laws regarding anti-discrimination, workplace safety, overtime payments, and terminations.
What is an Employer of Record?
An Employer of Record (EOR) is a third-party company that helps other companies by taking the legal responsibility to handle their human resource management (HRM) functions, such as the hiring, onboarding, payroll, benefits, and employment contracts. The trend of hiring EOR is increasing as it simplifies the complexities of hiring and managing processes. For instance, the market value of global EOR services in 2024 was USD 5.23 billion, which is estimated to reach USD 9.17 billion by 2033 as per reports of Business Research Insights.
What services does an Employer of Record provide?
An Employer of Record (EOR) provides services of managing payroll, recruitment, onboarding, tax compliance, human resource management, and employment contract management. The EOR helps businesses to focus on other business matters while fulfilling all the human resource requirements.
The services of an employer are listed below.
- EOR manages payrolls, deductions, bonuses, and taxes.
- EOR hires new employees and negotiates with them for packages.
- EOR makes an employment contract complying with local regulations.
- EOR handles onboard, training, and off-board processes.
How does an EOR differ from a PEO?
The EOR differs from a PEO (Professional Employer Organization) as the EOR acts as a legal employer while the PEO does not act as a legal employer but handles all the HR functions. The EOR offers hiring services globally without having the legal entity in the respective country, while PEO requires organizations to register the legal entity in the respective country for hiring services.
Can an EOR help with global expansion?
Yes, an EOR can help businesses with global expansion by hiring global employees from any part of the world. EOR offers businesses their entities registered in different countries for international expansion.
How does an EOR handle employee exits and terminations?
The EOR handles employee exits and terminations according to the local labor laws and employment contract. The Employer of Record takes exit interviews and drafts exit paperwork and final payroll processing.
