Top 10 Benefits of Hiring Employer of Record for Your Company

A Human Resources (HR) team plays a vital role in any business, including those operating in Indonesia. As flexible work arrangements become more common globally, many companies are adapting by embracing remote work for their employees. This is why a remote HR team has emerged and become the most reliable option for recruitment. As the name implies, a distant or remote HR team will not have a physical presence in your company and they assist you with all your HR processes in a distant location.

With rising demand, many Employer of Record (EOR) companies have emerged in Indonesia to assist businesses in navigating complex regulations and managing administrative tasks during expansion. How exactly can EOR services support your growth? Discover the complete insights in this article and learn how to make the most of EOR solutions.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party partner that legally employs workers on behalf of another company. While the client company manages the employee’s day-to-day activities and responsibilities, the EOR handles all formal employment duties, including:

• Employment contracts
• Payroll and tax withholdings
• BPJS (social security) and statutory benefits
• Work permits and visa processing (for foreign employees)
• Regulatory compliance and employee termination

By acting as the legal employer, the Employer of Record service allows businesses to hire quickly, stay compliant, and reduce administrative overhead, all while maintaining full operational control over the employee’s tasks and performance.

10 Benefits of Hiring an Outsourced HR Team through an EOR Company in Indonesia

Here is a list of benefits companies can enjoy from outsourcing HR team from a reliable recruitment agency in Indonesia:

1. High Flexibility and Scalability

The HR professionals you hire are highly flexible and scalable based on your current business requirements. Thus, it saves you a lot of hassles and you can easily upsize your team when your company grows, or downsize your team when there is a temporary business setback.

2. Cost-effectiveness

Another great benefit to make use of an outsourced HR team in Indonesia is that you can save costs significantly. First of all, with a remote HR professional team, there is no need for you to hire full-time HR employees with a monthly salary commitment. Second of all, you will save tremendous dollars without having to purchase expensive space, technology, and tools for carrying out your recruitment process.

3. Best Talent and Candidates

HR outsourcing providers like InCorp have vast experience when it comes to HR processes including recruitment, onboarding, training, and payroll processing. These experts have a wide talent network at their fingertips and they know how and where to find the best candidates for your business.

4. Optimal Matches

A common problem with in-house recruitment is that it is very likely that you will choose the wrong employees for certain positions or even the company. These unsuitable employees may not have the skills you need or they may not fit your company culture. With a remote HR professional team, they always make sure that they get you someone who has the qualifications for the positions and is committed to serving your company with adherence to your company culture and goals.

5. Compliance Assurance

Indonesian labor laws are complex and frequently updated. An EOR stays up to date with local employment laws, tax obligations, and statutory benefits. This ensures your HR operations are always compliant, minimizing the risk of penalties and legal issues.

6. Simplified Payroll Management

An EOR manages payroll calculations, tax withholdings, BPJS (Indonesia’s social security), and other statutory contributions. They also ensure timely and accurate payments to employees, removing the administrative burden from your internal team.

7. Enhanced Employee Satisfaction

EORs offer a structured and compliant employee onboarding process. They also ensure that workers receive proper benefits and support by helping boost morale, reduce turnover, and enhance employer branding in the local market.

8. Risk Mitigation

Because the EOR is the legal employer on record, they take on many of the legal responsibilities associated with employment. This includes handling contracts, termination procedures, and local disputes to protect your company from direct liability.

9. Streamlined Administrative Process

EORs handle a wide range of back-office HR tasks including employment contracts, leave tracking, income tax filings, and employee record keeping. This lets your in-house team focus on core business strategies rather than administrative compliance.

10. Rapid Market Entry

Partnering with an EOR allows your company to hire talent in new markets without setting up a legal entity. This eliminates the need to navigate long registration processes, making market expansion faster and more agile, especially important in dynamic economies like Indonesia.

READ MORE:

• Why do You Need An Employer of Record Service in Indonesia?
• External Recruitment: A Game-Changer for Toy Manufacturing

How Employer of Record (EOR) Service Can Expand Your Business in Indonesia

Expanding into Indonesia offers access to a large consumer base and growing economy. However, it involves navigating the complex regulations and administrative processes. This is where Employer of Record service becomes valuable for company in Indonesia. It enables businesses to hire talent and operate in the region faster and hassle-free.

Here’s how an EOR can help you expand your companies into Indonesia:

1. Initial Consultation and Strategic Planning

An EOR starts by aligning its services with your business goals. This includes assessing your workforce needs, preferred hiring timelines, and expansion priorities—ensuring a customized market entry strategy.

2. Legal and Compliance Management

Indonesia’s evolving labor laws require careful navigation. An EOR ensures full legal compliance, handling employment contracts, tax filings, and statutory contributions on your behalf—minimizing the risk of non-compliance.

3. Recruitment and Onboarding

With local market insight, an EOR supports candidate sourcing and manages end-to-end onboarding. They handle contract types like PKWT (fixed-term) and PKWTT (permanent), ensuring hires meet both legal and business requirements.

4. Payroll and Benefits Administration

An EOR manages monthly payroll, income tax withholdings, and mandatory benefits such as BPJS Kesehatan and BPJS Ketenagakerjaan—ensuring employees are paid accurately and on time.

5. Ongoing HR Support and Employee Management

Beyond hiring, EORs offer continuous HR services, including employee record management, policy guidance, and performance support—helping you build a productive, compliant team in Indonesia.

Difficulties that can be Overcome by a Remote HR Team

For businesses aiming to expand into wider markets, managing employees and administrative paperwork can be overwhelming and may distract from core growth initiatives. By using an HR outsourcing team, not only that you can manage your existing employees, but also you can take in more new employees from all over the world whenever you are. Don’t worry about the communication issues as well – a remote HR team you hire will be equipped with all the necessary technology and tools to ensure seamless communication and workflow.

Employer of Record Services in Indonesia with InCorp

InCorp’s HR services in Indonesia are innovative and we provide bespoke solutions for companies in all sorts of sectors irrespective of their sizes. Our experienced HR team has deep experience and expertise in building employee- and result-oriented HR solutions that are practical, focused, and implementable.

At InCorp, our experts leave no stone unturned and are passionate about and dedicated to helping you achieve maximum benefits from your business operations and investments. Over the years, we emerged as one of the most preferred HR solutions firms in Indonesia and have gained robust credibility.

Our Employer of Record services include:

• Employment Contract & Onboarding: We handle employment contracts in full compliance with Indonesian labor laws and ensure a smooth onboarding process for new hires.
• Payroll & Tax: InCorp manages salary disbursements, tax withholdings, and mandatory contributions accurately and on time.
• Employee Benefits & Insurance: We provide access to statutory benefits and customizable insurance packages to support employee well-being and retention.
• Visa and Work Permits: Our team facilitates the application and renewal of visas and work permits for foreign employees, ensuring full legal compliance.
• Compliance and Risk Mitigation: We ensure your employment practices meet local regulations, helping you avoid legal issues and operational risks.

Find out more about InCorp as your employer of record company in Indonesia for complete HR packages today. Complete the form below.