Reducing Administrative Burdens: What an EOR (Employer of Record) can do for you

This article provides insights into the role of GTS Nordic as an Employer of Record (EOR), and the benefits it can bring to international consultants, by engaging with literature in administration theory.

Key Information

• Coverage: 5 countries
• Services: Payroll, Benefits, Legal, EOR
• Compliance: Always compliant with local laws

Relocation and Bureaucracy

Relocating to a new country brings a set of administrative burdens in the form of various interactions with state bureaucracy. A core aspect of GTS Nordic’s service package is to alleviate these burdens, so our consultants can focus on their core competencies which brought them to Denmark.

When moving to a new country, all consultants are to some degree forced to engage with the national immigration regime. In Denmark, the main state agency that handles work, family, and residence permits is SIRI (“Styrelsen for International Rekruttering og Integration”/Danish Agency for International Recruitment and Integration). Additionally, consultants must interact with their (new) local municipality and the Danish bank sector.

Administrative Framework for Cost-Categories

A framework in administration theory has been developed to conceptualize the administrative burdens citizens experience in their interactions with the state. The framework measures three cost-categories: learning costs, compliance costs, and psychological costs (Herd & Moynihan 2018, Madsen, Mikkelsen, & Moynihan 2021).

How to Reduce Negative Cost Impacts

The potential negative impact of these costs can be reduced by GTS Nordic. Rather than spending time and energy on these aspects of immigrating to a new country, GTS Nordic reduces burdens to a minimum by completing the administrative tasks for you and guiding you in the physical steps you need to fulfill – such as attending a biometrics appointment. In this example, GTS Nordic would apply for you and book biometrics, so you only need to submit documents to GTS Nordic and attend the biometrics appointment. This saves the consultant time and energy across cost categories.

Non-EU Applications

An internal report conducted by GTS Nordic (2023) compared cases where Non-EU citizens applied for a work and residence permit on the pay-limit scheme to cases where the Non-EU consultants applied through GTS Nordic.

Methodology: As the fast-track offers a quick job start of 0 – 10 days of arrival to Denmark, it allows consultants to begin working before the final decision on their work permit application has been made by SIRI. In the standard pay-limit scheme, the applicant cannot commence work until a final decision has been made. Therefore, if we assume a median of 5 days to a quick job start, then the applicant on a fast-track can commence working at least 3 weeks earlier than a non-fast track applicant.

The analysis found that the direct benefits associated with GTS Nordic meant that consultants could begin their work assignment at least three weeks faster due to GTS’ fast-track certification at SIRI. Weighing the fast-track certification in the analysis, the relocation fee compared to consultants’ potential earnings (on average) shows a convincing positive cost-benefit ratio of 64.5.

Number of work permits issued to Non-EU citizens, yearly (UIM 2023).

EOR Prospects

The global macroprocesses of international labor indicate an increased globalization and demand for specialized workers, where nation-states compete to attract talent. Accordingly, The Global Employer of Record (EOR) Industry Research Report 2023, by market research publisher Proficient Market Insights, forecasts the global market size of EORs to expand from 1890.29 million USD in 2022 to 3745.43 million USD by 2028. In alignment with this forecast, the Danish labor market has increasingly hired foreign labor.

For international contractors, being able to start quickly—within 14 days, instead of waiting 1.5 to 2 months—can be a significant competitive advantage. Therefore, it is a considerable benefit for our business partners that we can bring them on board so swiftly. After all, starting things off quickly is an excellent way to begin, and we can then assist them throughout the entire process.
— Poul Lund Christensen, Managing Director

Conclusion

Overall, GTS Nordic as an EOR (Employer of Record) is a third-party actor that can alter the costs citizens face in their interactions with government. GTS Nordic can change learning costs by explaining a policy in ways that either increase or reduce knowledge about a program, the citizen’s legal rights, and how to acquire services and reduce compliance costs by helping people navigate bureaucracy or acquire documentation.

Curious how we can help your unique case? Contact us today.