How Does a UK Company Switch EOR Providers Without Disrupting Its Employees?

If your UK business employs people abroad through an employer of record (EOR) provider, and for whatever reason, that EOR provider isn't working out anymore, switching means moving their employment, payroll and benefits, not simply changing a supplier. Ashleigh Graham, Global Solutions Manager, UK, at Safeguard Global works with UK companies making that move. Here's how long it takes, what the usual checklist misses and what to do first.

When is it time for a UK company to switch EOR providers?

It's mostly down to compliance, service, or maybe they're looking at trying to consolidate because they want someone that can cover all the regions they're in, instead of having multiple vendors.

The one that comes to mind is a business that had quite a few of their employees on EOR with a platform-based provider. After the payroll had run, they came to the realisation that they were being invoiced for private medical insurance, which wasn't something that they’d agreed upon during onboarding.

While the business tried to resolve the matter with the EOR provider, those employees got used to, and liked, this benefit, to the point that when it was taken away, they became unhappy, which caused the business a massive headache. The business decided it needed to retain these employees but also that this provider wasn’t taking accountability. Response had been poor over the course of two weeks, and there had been service issues before this, but this was the boiling point for them.

How long can an EOR provider switch take?

It depends really on the country where the employees are located, because the country dictates what happens when it comes to a transfer. Some countries like the UK, as an example, can transfer people pretty quickly and pretty easily. It would just be a case of sending out employment contracts, getting their year-to-date figures, and then getting right-to-work checks finalised. So, it can take four to six weeks, start to end, depending on how quickly we can get the information.

But there are also certain countries where transferring isn't an actual transfer. For those countries, you would have to terminate and then rehire employees, which can cause quite a few issues from an employee perspective because they're being terminated. When it comes to expats in a certain country, depending on their type of permit or visa, it would have to be either a transfer or a new application depending on the country, which does take time in itself.

I've had some that have taken quite a few months just to go through that transfer process before we even got to a date of when they've gone live as a new employee in that country.

Why isn't an EOR provider switch just an administrative task?

We find that a lot of businesses think that switching EOR providers is some kind of administrative task that can be done pretty quickly. Like it’s just a case of pushing a button and it's done. But it's not, because it's a new entity, it's a new employment.

One of the key things that I think gets missed is that this isn’t just a process. At the end of the day, there’s a person, an employee with real concerns about their payslip or emergency tax, those types of things. A lot of the time customers will come to us, and they think that it's just as easy as switching from one plan to another when it comes to one of their subscriptions, and it's really not.

It also means sometimes having that uncomfortable conversation to say, what you've been doing up to that point hasn't been compliant. One example that I had of a transfer was an employee in Italy who was expensing their company car allowance to try and mitigate tax. Obviously, it wasn't compliant to do it in that way. So, it was then a case of going through what a simulation would look like, to make sure that all parties were comfortable with us running that payroll, doing parallel pay runs just to make sure everybody concerned knew what they should expect moving forward.

What do employees need during an EOR provider switch?

This is someone's livelihood. This is what pays their bills. We've all been in a situation where payroll's been wrong once or twice in our careers, and that fear of, oh gosh, I'm missing x amount, and I've got these bills coming out. It’s these types of fears that can surface during an EOR-to-EOR switch because depending on the country, it can involve a transfer of employment, and that's where we really need to meet the employees where they are. To give them reassurance that this isn't going to negatively impact them. With benefits like pension or private medical insurance, they might get the same package but with a different name or provider. So, part of the process is matching their benefits to what they currently have, to make sure that they have something that's equal or better.

One EOR provider switch I had recently was with a US-based customer that wanted to transfer over employees based across Europe. We had to really go into each country, what the role was, what their current tenure was, what their current employment contract was, and create a project map of what we could quickly transfer, like a straight swap into Safeguard Global, and what was a little bit more complex, and why, or if we had to acknowledge tenure.

We also needed to let the employees know. Employee experience is always better if employees are aware that this is coming down the line. We do these — I call them “village hall meetings” — where we put a call in for a certain country, like Spain, as an example, and we bring our Spanish HR manager in. All of the employees in Spain are then able to have a conversation in their native language over Teams and go through who they're going to be speaking to, what's going to be happening and what is expected of them. Our HR managers are able to talk to employees unbiasedly and negotiate on their behalf during the transfer process. Customers doing a wide-scale switch often have an expectation of some level of attrition, but our goal is to have zero attrition and to support those employees throughout the process.

What organisations should check before starting an EOR provider switch

1. Be fully aware of the terms and conditions that you've signed into with your current EOR provider and if you're locked in to a certain amount of time. There are normally certain hidden charges that providers have when it comes to transferring employees out, like a transfer fee or a charge in doing that.
2. Gather the countries, employees and whether they're local or expats into some level of a scope, so that when you're going to market you can get as much information as possible.
3. While we provide a comprehensive set of free country employment guides on our website, information is always changing and tools like ChatGPT or similar AI tools might not be fully up to date So, I would always advise speaking to a person first and getting a second opinion on how things are being read when it comes to those countries.

What every UK HR, business and finance leader should remember

The key thing is time — setting the expectation that an EOR switch is not going to happen overnight. Approach your employees about the transfer once you've done your due diligence, once you know what that process is and how it will impact the business and the employee.

If you go with an EOR provider that's pushing you into transferring quickly without having all of those steps outlined, that should be a red flag in itself. It usually means that they've not thought about retention or the employee experience, and for them it's just about trying to get you to go with their services. So, I’d say it’s best to look for an EOR provider that's supportive. One that will guide you through the process, prepare employees with you and has a strong track record in EOR switching, as they will know what to look out for.

Considering a switch? Start with a country-by-country assessment

If your current provider isn't working out and you're weighing up a move, it's worth a conversation before you give notice. Bring the countries your people are in, whether they're local or expats, and the terms you signed. We'll tell you which countries could move in four to six weeks and which will take longer. If staying put is the better call, we'll tell you that too.

Talk through switching your EOR provider