By Shweta
What are EOR and ICC?
EOR (Employer of Record) is a third-party organisation that recruits professionals based on client requirements. They will handle all legal and HR-related procedures such as payroll, taxes, and the onboarding process, while their client will have complete control over the hired employee's day-to-day tasks, scheduling, management choices, and salary allocations. Whereas an ICC (Indian Consultancy Company) is a well-established organisation that provides services to its clients while keeping its own in-house teams across multiple areas.
Business model
EOR follows a business plan in which they charge a fixed amount or a monthly fee to manage the entire onboarding process to hire professionals for a particular company. As a result, the client must pay the employee's salary in addition to the EOR’s predetermined service charges.
It's different in ICC; they provide a wide range of services to their clients and charge prices accordingly. They generate a profit by charging a high fee from their clients but only pay a small percentage to their employees. In this case, clients only have to pay for the specific service that they had opted for, from the ICC.
Hiring
EOR only provides professionals based on the demand of their clients and then manages the complete onboarding process for a particular organisation, leading to cost-effective hiring for businesses that don’t have their own entity at a particular place. However, ICC hires experts for their own company, and they have specific services to offer in the market thus they hire people with specific skills and experience. As a result, sometimes when clients surpass the workload, this might occasionally result in a lack of resources.
Pay to Professionals
While receiving a large chunk of money from their clients, ICC pays their professionals a fixed amount of compensation that is equivalent to market rates. They give appraisals, incentives, and yearly raises to their staff on a regular basis, but the client is unaware of these events. Likewise, ICC must pay their employees even if they are not working on a project at a specific time.
Whereas in EOR services, professionals are paid an amount agreed upon by the professional and the Client. In this manner, clients have complete control over their employees' payment cycles.
Work Assignments
Once an EOR hires a professional for a client, the client gets full control over their employees' everyday tasks, management, and appointments. Thus the client can monitor the work quality and priority of the work assigned. Also, there will be effective communication resulting in high work quality and on-time delivery.
While in ICC, the client is assigned a project manager who manages all duties on the client's behalf, resulting in two-tier communication that occasionally impairs the quality of the work. Furthermore, because the ICC team is working on numerous projects at the same time, the client cannot control the preferences of the tasks, which may lead to delays in project deliverables.
Now rating the primary factors i.e. work quality and communication for the comparison from high to moderate to low.
AspectsEORICCCommunicationHigh; the reason being direct communication between client and staff Moderate; due to the two-tier communication, ideas may not be given with their full intent and potential Work Quality High; since the client has complete control over the employee's workHigh or Moderate; if a project manager properly delivers tasks and ideas to the handler the quality will be good, and if not, the work quality may suffer
Arriving at a conclusion on whether to choose EOR or ICC
If you operate a business and want to extend it all over the world without going through the stress of employing or creating your entity in different places, you should consider EOR. Simply ensure that the EOR has an excellent track record and has worked in the same industry as yours to get the best people from various locations.
However, if you have a one-time project or want to work on a project as a hobby or side business, you should contact the ICC since they will take care of everything. Simply submit the service fee along with a list of your design specifications and a timeline
By Shweta
Well explain