What is an employer of record – and could it solve the staffing crisis?

EORs are gaining momentum in New Zealand – and a new partnership is giving them some spotlight

What is an employer of record – and could it solve the staffing crisis?

A recent study by Hays found that 91% of employers are experiencing a skills shortage and 83% said it’s impacting the effective operations of their organisation. It’s no secret that New Zealand is facing an unprecedented workforce crisis.

The Reserve Bank states the number of job vacancies being advertised is nearly double the number of unemployed people in New Zealand right now. The consistent outflow of intrepid Kiwis heading overseas since the borders reopened is only exacerbating the problem for Kiwi employers. However, a unique business partnership could help reverse the brain drain by opening New Zealand businesses' talent pool to Kiwis living overseas.  

“Hiring offshore Kiwi allows companies to tap into a community of people who understand the New Zealand culture and business landscape, but also understand the landscape of the market they are based in,” said Toni Truslove, CEO at Kea New Zealand (KNZ). “This is a huge advantage when it comes to growing a team offshore.”

Read more: Hiring overseas talent? HR’s legal concerns in the global market

KNZ provides a platform for Kiwis to stay connected to New Zealand by providing a valuable resource of networks and advocacy while they’re living abroad. The company has partnered with Deel, a global payroll company that officially launched its brand in New Zealand this week.

“We have been connecting New Zealand businesses to offshore Kiwi talent now for a number of years but the biggest hurdle in that transaction has always been, how do we pay them? How do they observe local tax laws and compliance? So, when we met the team at Deel it seemed like a huge barrier had been removed,” Truslove said.

Deel simplifies the overseas recruitment process by becoming an employer of record (EOR) for organisations. With 250 mobility and tax specialists globally, Deel is the largest EOR in the world.

EOR is a little-known idea amongst Kiwi businesses, but it isn’t a new concept. In fact, EORs have existed for many years. What Deel has done has taken the idea and built it into a product that enables companies to hire seamlessly across 150 international markets. 

Read more: How can HR build a rapport with an overseas team

“Previously, there have been significant roadblocks to hiring international talent – including lengthy entity set-up times averaging six to eight months, compliance risks, confusing local laws, complicated tax systems and hefty fines if you don’t get this right,” said Shannon Karaka, Managing Director, New Zealand at Deel. “What the EOR does is employs that individual on behalf of that organisation and assumes responsibility for all the payroll and compliance obligations required by law, but the New Zealand company gets full control of the day-to-day relationship with the employee.”

Deel officially launched in New Zealand on Wednesday with an event on Auckland’s waterfront, but has already been working with a number of Kiwi businesses looking internationally to fill talent gaps.

Tauranga-based software company LawVu, which develops software for in-house legal teams, is among those businesses. LawVu is using Deel to add to its 120-strong workforce as it expands internationally.

“LawVu has the capital and international customer opportunities to create a global, significant business – we just need the staff to help make it happen,” said Karly Boast, vice president of people at LawVu. “Deel enables us to expand rapidly into new international markets, confident that we can do so in an efficient and compliant manner that also creates a positive experience for new staff working remotely for a start-up headquartered in New Zealand.”

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What is an employer of record – and could it solve the staffing crisis?