Organizational changes are an important part of company growth. They help businesses adapt to new market and industry trends. These changes could be internal restructuring, mergers and acquisitions, or leadership changes.
One such major change is transitioning from a subsidiary to an EOR model. An employer of record (EOR) is a service provider that acts as the legal employer for international companies. It allows them to hire employees in India without setting up their own entities. Companies often transition for financial and operational benefits, as well as better HR support from EOR experts.
However, even positive changes like these can make employees feel uneasy. They might start worrying about their job security, compensation, or career growth. These concerns can also lead them to question their future with the company. To ease these fears, it’s essential to reassure employees and ensure as little changes as possible to their day-to-day work.
This process of making employees feel safe and reducing changes in their work environment is called minimizing employee disruption. In this blog, I am going to take you through the key strategies for reducing this disruption. So without any further ado, let’s jump right into it.
How to Ensure a Smooth EOR Migration?
We’ll understand this section in two parts.
First – the administrative front. This is the process where the company and the EOR partner set up the transition. The employees haven’t been involved here yet. However, it is the most crucial part of the transition. It sets the entire foundation for further EOR migration.
Second – the part of the transition when the employees get involved. This is when the employees need to be educated about the transition. Addressing their fears, concerns, and doubts fall in this part. This is where the disruption needs to be minimized and I have got just the right strategies for you to achieve it.
A solid administrative foundation for a smooth transition
“You can’t build a great building on a weak foundation.” are the words of the American leader – Gordon B. Hinckley. You need a solid foundation to make a smooth and sustaining switch from a subsidiary to an EOR model. In this entire EOR switch, the foundation becomes the administrative and operational transition.
As a company going through this transition, you have to ensure there are no loose ends in areas like strategy, compliance, payroll setup, employee contracts, and benefit continuity. Any errors in this step could cause further complexities and delays as you go further. Let’s take a look at the administrative fronts we need to focus on during the EOR switch.
- Preparation of the EOR migration
In Benjamin Franklin’s words, “By failing to prepare, you are preparing to fail.” This couldn’t be more apt for major transitions like subsidiary to EOR migration. The planning here needs to be done to the T, with every detail accounted for.
Before you even start, you need to decide which key stakeholders need to be involved. You need to take them through your plan and get them on board with the transition.
You then define the strategy and objectives of the transition. Here, you collaborate with your EOR partner to map out the entire process and set realistic timelines.
Establish checkpoints and metrics to track the progress and success of the migration. What are the dedicated teams and which part of the transition will they be overlooking? When do the HR, legal, and finance teams get involved?
Every professional, every team, every department involved should clearly know their assigned responsibilities and timelines.
At the end of this process, you should have a solid transition framework ready with all timelines and milestones in place.
- Retain and enhance employment benefits
One of the most important aspects of a job for an employee is their compensation and benefits. To not cause any major concerns in this area, the previous benefits need to be retained or improved. This step should involve finding the best way to offer employees benefits to your team while being compliant with all required laws.
Now this part usually gets a little tricky. Because more often than not, the salary structures and benefits do change for the employees transitioning. Under the EOR model, employees can only get benefits that align with labor laws, income tax, and statutory compliance. If the benefits of the EOR and subsidiary do not match, the EOR needs to explain the reasons to the employees.
In addition, your EOR partner also needs to transfer benefits like provident fund contributions and health insurance, etc. to EOR.
- Creating new employee contracts and policies
It’s now time to talk legal. In this step, new employee contracts need to be created reflecting the employment under the EOR. Any changes in salary structures or benefits would directly impact the employees. Therefore, one of the most crucial things to do here is to match the new contracts with the previous ones. Along with employee contracts, the policies too will change according to the terms of the EOR. This includes how EOR manages payroll, taxes, benefits and other employment terms.
Involving employees in the EOR switch
We now enter the phase where we involve the employees in the transition. As per the decided timeline, an announcement needs to be made around the transition. The employees need to be introduced to the EOR and the whole transition needs to be explained. What it means for the company, how will it benefit the employees, and what exactly will change? It is also important to let them know that their work, their environment and their routines would not change.
The very first thing employees need to hear during a transition is that their jobs are secure. As a company, you can assure them that there will be no gaps in their tenure or compensation. The only change is that they would shift to the EOR payroll.
- Smooth employee onboarding
Now comes onboarding the employees to EOR. This step is specifically about engaging the employees with your EOR partner. Your EOR partner will create a simple employee onboarding process where they get to know the EOR team. Introductory sessions will be scheduled to make the employees feel comfortable and at ease. Any doubts they might have will be addressed in the onboarding.
- Adapting to new HR systems
When employees are shifted to the EOR payroll, they need to adapt to the HR software used by the EOR. This shift can be a significant change for employees. Mainly because this will be their new software for attendance, applying for leaves, viewing their salary slips, etc. Therefore, it is important that the employees are made familiar with this.
The first step to that would be providing them with adequate training to help them understand the new platform easily. This could be through detailed guides, step-by-step instructions, or a live demo. Employees should feel confident and comfortable with using the new software. Promptly answer their questions, solve their doubts and you should be good to go.
And these would be the basic administrative aspects of the transition. Covering this would create a pretty solid foundation for the employees to start their journey with your EOR partner.
With the foundation in place, let me now take you through the strategies to make employees feel comfortable, happy, and proactive during this transition.
Key Strategies to Minimize Disruption for Employees
I am excited to present to you the key strategies to help minimize the disruption for your employees.
1. Transparent communication
You could first start by being crystal clear about why is the transition happening. And not just the why, but what is the transition about and what is changing.
- Be transparent and explain the reasons behind the EOR switch and how it benefits them.
- Explain how this will ultimately benefit both the company and the employees.
It’s natural for employees to feel anxious and uncertain about it.
- As a company, be proactive in addressing employee concerns. You can do this through Q&A sessions, team meetings, town halls, etc.
- You need to reassure them that their well-being and growth remain to be a priority for the company.
And why just stop there? You could include the employees in the progression of the transition by giving them regular updates. Make them feel a part of the transition. This can be done through say, company-wide emails where you maintain continuous communication.
2. Maintain tenure recognition
Employees who are now being shifted to EOR have dedicated their time and resources to the company. It is necessary that they don’t feel a disconnect from the company and that their dedication to the company is appreciated.
As they shift to an EOR model, you can recognize their time spent with the company and acknowledge it. They shouldn’t feel they are starting over in their career again. Since the employees range from all age groups, this is a crucial step to minimize any stress, disruption, and resistance on their end.
3. Preserve company culture
It is obvious for employees to feel anchored to the company through its culture. And hence, it is important that the company culture be preserved and encouraged after the transition. This could be the shared values, work traditions, and working norms. While transitioning them to EOR you can keep these familiar elements intact. By preserving elements like celebrating milestones or team rituals, employees will feel less disrupted in their day-to-day work.
This is one of the main reasons why companies choose EORs over freelancers or outsourcing. Employees get to stay better connected to the companies. They get to experience and be a part of the company culture which increases their commitment towards the company. Companies too experience better control over their employees.
During the transition to EOR, it is important to keep the company culture as intact as possible. Your EOR partner aligns aspects such as notice periods, holidays, leave policies, reporting structure, working hours, etc., with your company. This sustains the familiarity with the company minimizing the disruption.
4. Employee involvement and feedback
Here comes my personal favorite. I saved this for last because I feel this could significantly improve the entire process of minimizing disruptions during the transition. The strategy is to simply make the employees contribute their share in the transition. What better way to minimize disruption than by making them an active part of the transition itself?
I am talking surveys and feedback and suggestions. And not just for the sake of it. Really listen to them and implement some of the suggestions you think could improve the transition. They will become proactive in helping you make this transition smooth and easy. And because they are a participant in the transition, they won’t have any surprises coming their way. They would already be in the know.
While researching, I came across this study conducted by Gartner – Changing Change Management. In this study, the employees were asked to actively participate in the major organizational changes and the results were amazing.
The study had an open-source approach, meaning the employees were actively involved in the transition. They were assigned specific roles and responsibilties. The study goes on to say that about 64% of employees have the skills to help in the transition and over 74% of them are willing to step up and help. These are such good numbers.
The study was conducted with over 6,500 employees and over a 100 senior HR leaders. What did they change?
- The employees were engaged to co-create strategic decisions.
- The responsibility for planning how to implement this change was assigned to the employees
- A transparent and open conversation about the change was encouraged and supported.
What can this change of approach do? This dynamic shift in approach has the potential to:
- An approach like this can increase the success of change from 34% to 58%
- The time taken to implement these changes can decrease by 33%
- A personal favorite again – employee engagement can increase by an impressive 38%. What?
- The intention of employees to stay in the company can increase by an astonishing 46%
Implementing strategies like this can definitely help the employees be more positive about the EOR migration. The better they feel about this, the less disruption gets caused as they become a part of the switch.
So far, this blog was all about managing employees and their emotions during the shift. Let’s now jump to solidifying a positive perspective about the EOR services.
Build Trust in the EOR Partner
If the employees are going to be shifted to the EOR, it is only right to help your employees trust your EOR partner. Your employees should get to know the EOR team who will be engaging with them. Your EOR partner can set up sessions where employees can learn about their policies, processes, and values. This will build transparency and help employees feel more comfortable with this transition.
To solve any questions and doubts, your EOR partner should assign a dedicated support team. A team that will be available to resolve any queries quickly. This will further help employees feel comfortable with the EOR.
Remunance, for example, is an EOR partner who holds a record of being 100% compliant with labor laws. We provide a range of benefits to our EOR employees which match the standards of the industry. You can assure your employees that the following is what they get with an EOR partner.
- We provide better health insurance and claims assistance
- We fully comply with all employee-related regulations such as PF, ESIC, Gratuity, and more.
- We support our EOR employees with bank loans and additional services
- We offer guidance on tax planning for employees
- We provide them with all the necessary IT equipment and support
- We conduct a variety of fun engagement activities
Read: What is an Employer of Record (EOR)? A Guide for Global Businesses
Company Leadership Aligning with EOR
Companies align with EOR because they can access their employees, have direct control and communications
In this entire transition process, the management of the company can help make the transition easier for the employees – starting with the team managers. The managers need to be supportive and available to answer the queries of their team members.
They could conduct team meetings to explain the transition and address employee concerns. The managers should be proactive and understand everything happening around them to better guide their team.
Next, comes the upper management or senior leaders of the company. Senior leaders should actively endorse the EOR migration and demonstrate their commitment to the change. They should highlight to employees that both the company and the EOR partner have their best interests in mind.
This can be done by organizing town halls, sending personalized messages, or meeting with teams to discuss the transition.
By directly engaging with the employees, leaders get a chance to show them that they are fully invested and have confidence in the success of the transition.
Celebrate the EOR Transition
Last, but one of the most important points, the company should practice positive framing of the EOR transition. It is important to show the employees that the move to an EOR is an evolution; it is not a downsizing or a shutdown, but a better upgrade. The company should highlight how this change is a step forward and offers new growth opportunities. When the employees see the transition as a positive change, the chances of them being cooperative and embracing increase.
‘United we rise’ is a timeless approach. This can be leveraged in the transition by organizing events or sessions that bring the company and EOR teams together to build rapport and motivate each other. Activities like this help create a sense of camaraderie and support. This further makes the transition feel like a shared journey rather than a disruptive process.
How Remunance Helped Its Clients in EOR Transition
So far, Remunance has helped multiple clients transition from a subsidiary to EOR. These clients came from industries including, Software Development, Social Impact, Management Consultancy, and FinTech. Every client had different reasons for the transitions but we found one thing to be common – all teams were functional, effective and had good performance. The client did not want to let these employees go so they turned to EOR to help them out.
The reasons mainly included
- Better cost management
- Subsidiaries being cost centers
- Complex compliance and a whole lot of paperwork
- Sometimes it was management’s decisions
- We also had a company that halfway through realised the amount of paperwork, the tediousness involved and transitioned to EOR before fully setting up the subsidiary
Why did they turn to EOR?
Well, the main reason wanted a solution where they could cause the least amount of disruption possible to the employees. The teams were already set up. They were working well. They knew, had settled in, and were comfortable with the company culture. The client did not want to change that.
Alternatives like freelancing or outsourcing did not offer this as they would lose out on both company culture and direct connect with the employees. They wanted a solution that would cause as little hindrance as possible. And enter Remunance.
What did Remunance do?
Before including the employees, we conducted excessive and detailed meetings with the management teams to understand the current processes and aspects of employment. This included understanding everything from employee insurance to benefits.
We then conducted our own internal research to analyze how well could we match these aspects. And we tried to match our new contract with their existing systems as closely as possible. After these details were completely managed to the last detail, dotting all i’s and crossing all t’s, then we included the employees.
A detailed introductory call was conducted where we explained the details of the transition and assured them that nothing had changed for them. New employee contracts were created and employees were introduced to our systems. We conducted proper training sessions to make them comfortable and accustomed to these new systems.
Why did they choose Remunance?
Because we were committed to go the extra mile. One of our clients had an insurance vendor with whom they had policies negotiated. They wanted to continue with the same insurance provider. Remunance partnered with the vendor to make sure our client didn’t have to change vendors.
With another client who had an office space already set up and didn’t want to relocate. Remunance made sure to help and got into an agreement with their landlord instead of finding new office spaces. No hindrance in work or disruption for employees was assured.
Another one of our clients used to give out monthly bonuses to their employees. Remunance upgraded and set up a system where we would get these bonuses on time. We ensured these bonuses get added to the payroll of the employees on time.
Once the employees are involved, we are with them every step of the way. After the introductory calls, Remunance arranges a one-on-one Q&A session with every employee. We understand some of the employees might not know enough about the EOR and might have more questions about their salary, insurance, benefits, etc. During this process, we also actively involve the company’s management so the employees don’t feel alienated.
We have a solid ticketing system in place. This has created quite an approachable space for employees to just raise a ticket and resolve their concerns or doubts. And we like to see this ticket box empty. So we’re on our toes making sure employees don’t have to wait days to get a response from us.
After successful onboarding, we conduct a re-evaluation call with our client to understand how things are working. If the employees have any troubles still if they’ve adapted well to our systems, and if anything needs to be changed or improved.
That, and more, is what you get with Remunance.
To Sum It Up
Employees are an integral part of the organization. Making them feel safe and having them trust the company is one of the most important elements during the transition. For a safe EOR migration, your workforce management strategy needs to be solid and in place. The employees should feel empowered to not undervalued at any point during the transition.
Employees should not feel like they are being disconnected from the company. The main goal is to make employees feel that by transitioning to EOR, they are being taken care of. Be honest and open about the transition and be patient and understanding about their reactions and concerns.
If you really count my suggestion in – I say just make them an active part of your transition. You have the numbers. Make EOR transition immersive, not something that happens to them, but with them.
