For business growth in the UAE, employee management and retention play an important role. Entrepreneurs and SMEs often face HR management challenges during business expansion in the Emirates. Especially finding global talent that adds the right skills without causing a significant increase in compliance complications.
This is where solutions like an employer of record (EOR) and traditional staffing agencies come into play. Do you often get confused between these two options for scaling your business in Dubai? If yes, then you have landed at the right place.
In this blog, we’ll break down the benefits of EORs and staffing services, their duties, and their legal and financial implications.
What Does an EOR Do?
An Employer of Record (EOR) is a third-party agency or service provider that legally employs workers and manages them on behalf of your company. EORs help with visa processing and work permits. They also handle important HR functions such as payroll management, employee benefits, training and development, onboarding, offboarding, and local labour law adherence.
By outsourcing employee management tasks to a trusted EOR company in Dubai, businesses can focus on their core. EORs are particularly beneficial for SMEs looking to set up business in the UAE. Here are the key services offered by EORs.
- Payroll management: By processing payroll on time and ensuring compliance with local regulations, including the Wages Protection System (WPS), an EOR prevents fines, penalties, and reputation damage. They handle all aspects of payroll management.
- Employee benefits: EOR helps companies design and manage employee benefits according to the latest local laws. They ensure employees receive all benefits, including health insurance, paid time off, and bonuses while fulfilling legal requirements in the Emirates.
- Employee contracts: With EOR solution, the employee onboarding process not only gets simplified but quicker. EOR platforms ensure you get the right candidate as soon as possible to start your operations immediately in the Emirates. Also, EROs create employee contracts that comply with local legal requirements and your companies’ rules. They take care of all necessary documentation for the smooth integration of employees in your company.
- Employee visa and work permit: To work in UAE, employees must have a valid visa and work permit. Navigating the visa process can be complex and time-consuming for the in-house team. EORs act as the legal employer, processing professional visas and handling all paperwork. This speeds up the hiring process and removes the burden of dealing with immigration rules.
- Offboarding: EOR services handle notice periods, final salary calculations, and termination paperwork. They ensure a compliant exit process for both the employer and the employee.
What Does a Tradition Staffing Agency Do?
A staffing agency helps find global talent for businesses in the UAE. They help with finding and onboarding temporary, permanent, and contract workers for your industry type. The best staffing agencies do more than just searching for a candidate.
They have expertise in finding the best global talent, from identifying suitable candidates and conducting interviews to completing onboarding. Whether you want a worker for short-term roles or hire long-term employees, staffing agencies can help you with all. Here are the key services provided by staffing firm in the Emirates:
- Talent search and recruitment: Staffing services providers search for qualified candidates in UAE based on your job description and hiring needs. These agencies use their talent database and social network sites to find professionals who match the job.
- Screening and interviews: Once potential candidates are sourced, staffing firms start the first round of screening by reviewing the resumes, conducting initial interviews, and checking references. They also carried out basic skill tests to shortlist the best candidates.
- Temporary staffing: Recruitment agency services also supply a temporary workforce on demand for your company’s fluctuating workload or project-based needs.
- Industry-specific recruitment: Specialized staffing agencies in UAE focus on various sectors such as healthcare, IT, finance, manufacturing, production, import, and export businesses. They provide candidates with the specialised skills and experience required for the job.
Top Differences Between EOR and Recruitment Agency
Although they sound similar, an Employer of Record (EOR) and a traditional staffing agency differ in terms of their role and responsibilities. Here are some differences between these two:
Legal employer
EOR – Acts as the legal employer on behalf of your company to hire employees internationally and manage them in full compliance with local labour laws. EOR handles payroll, compliance, and benefits so that you can focus on the core business tasks while running business in UAE without any legal issues.
Traditional staffing agency – Focuses on the hiring process unless they offer additional services. Here, the employment relationship is established directly with the client.
Hiring process
EOR – Takes full responsibility for the complete hiring process starting from recruiting and onboarding to handling employment contracts and termination. This is especially valuable for international hiring, as EOR platforms ensure compliance with complex UAE laws across Emirates.
Traditional staffing agency — Focuses on recruitment and placement to fill positions in a company. This agency handles candidate screening, hiring, and initial placement. However, once employees are placed, your business is responsible for management. This is especially useful in hiring temporary or seasonal staff.
Scope of services
EOR – Offers comprehensive EOR services that cover HR, including payroll, benefits, and compliance.
Traditional staffing agency – Concentrates only on the recruitment process, including job posting, screening of candidates, selecting, interviewing, shortlisting, and contract formation.
Control over employees
EOR – Takes control over administrative support systems, including regular training, development courses, performance management, etc., while the client has control over day-to-day work management.
Traditional staffing agency – Clients have complete control over employees once hired.
Cost structure
EOR—Fees are based on the number of employees and administrative responsibilities. Often, EORs charge a flat fee per employee per month, which is lower than hiring an in-house HR team. Also, they charge a competitive service fee for all employee management tasks, including work permits and visas, which staffing agencies don’t offer.
Traditional staffing agency — Charge fees based on a percentage of the hired candidate’s salary or sometimes a fixed price. The fees can be a one-time payment or an hourly rate depending upon employee type. Employers bear the cost of employee training and other regular needs.
Which Option You Should Choose in UAE
Select a traditional staffing agency: When you are in need of filling a position quickly, a traditional staffing agency can be a good option. It is especially best for hiring temporary, part-time, or seasonal employees. But, keep in mind that the staffing agencies may not cover legal and regulatory compliance requirements as completely as local EOR employees.
Choose EOR in UAE: For companies looking for a cost-effective solution for employee management and visa processing in UAE, an EOR platform can be a great choice. As your legal employer, an EOR oversees all HR tasks, including recruitment, hiring, employee benefits, termination, work permits, and more.
Working with EOR services in UAE saves you the cost of establishing a local entity or hiring in-house staff to oversee UAE compliance issues. You get all of the legal protections and none of the administrative headaches for a reliable, low-cost fee.
Easily Manage Employees in UAE with Connect Group
As a local EOR, Connect Group enables you to employ full-time workers to support and grow your business in Dubai or other Emirates. They are local experts who can handle all the formal employment tasks, from payroll to benefits and compliance documentation to onboarding. Moreover, you don’t need to wait for a lengthy entity setup as they will handle everything for you, so you can focus on building your brand in UAE.
Conclusion
Both Employers of Record (EOR) services and traditional staffing agencies play crucial roles in workforce management in the UAE, but they serve different strategic purposes. An EOR manages everything from legal employment to compliance, making it a strong partner for businesses focused on risk mitigation and smooth international expansion. On the other hand, a staffing agency streamlines the recruitment process, making it ideal for short-term or local hiring needs.
When choosing between the two, consider the range of services, cost structures, and the long-term value they bring to the client company. If your goal is to reduce the burden of global hiring and HR administration in Dubai, select the option that aligns with your business goals, budget, and growth strategy.
FAQs
Can I work with a traditional staffing agency and EOR together?
Of course, You can partner with both EOR and traditional staffing agencies for your business formation in Dubai. With EOR, you can be stress-free in hiring and managing global talent. EOR solutions also help with visas and work permits. Experts EROs are up to date with the latest labour laws and manage employees as per local regulations. This safeguards your business against any legal risks or disputes. On the other hand, a workforce agency can help you with short-term and temporary hires. They are also aware of the latest amendments in local labour law.
How does an EOR ensure compliance with local labour laws?
An EOR stays up-to-date with local labour laws and regulations in the UAE. They have all the needed expertise and experience to manage employees as per UAE employment law. They ensure that contracts, benefits, work permits, visas, hiring, and termination are in compliance. This is crucial for companies expanding into new global markets where local laws can be complex.
Are EOR services more expensive than using a staffing agency?
EOR services might appear costlier upfront, but they often include comprehensive EOR services such as legal compliance, global payroll, benefits administration, work permits and visas. When a company needs to hire employees internationally, an EOR assumes full responsibility for employment, reducing legal risks and administrative burden. While traditional staffing agencies may charge lower recruitment fees, they don’t assist with employee management, visas, or work permits.
