Hiring in the UK and EU: Key Differences and How an EOR can Help

Following Brexit, which officially took place on 31 January 2020 — the recruitment scene in the UK and the EU has changed significantly. With the transition period officially ended on 31 December 2020, companies, employees and the labour market in general have been profoundly affected by these developments.

The changes in the hiring landscape have created both challenges and opportunities for companies looking to hire in the EU and UK. It is vital for businesses to understand the differences in the hiring process, such as employment regulation, taxes, and compliance requirements, in order to expand and manage talent successfully.

This article looks at the differences in the recruitment scene in the UK and the EU and how an EoR can help organisations navigate the new employment regulations.

Differences in Hiring: UK vs. EU

Employment Laws & Regulation

UK: UK labor law is traditionally similar to that of the EU, but after Brexit some important changes were introduced in relation to working time regulations, holiday pay, and data protection (UK GDPR).

EU:  Although the EU has standardized labor laws among its members, each country still has its own rules. Germany, for example, has strict rules to protect workers, while France has strict labor regulations for working hours.

Hiring Style

UK:The UK has a more flexible and business-driven hiring style  in place that includes shorter notice periods and probation periods. Background checks and references are also common.

EU: On the other hand, the EU has more structured and regulated hiring processes and styles in place that include longer notice periods in many countries (e.g., Germany, France), and in many industries, the hiring process involves the representatives.

Employment Contracts

UK: In the UK,employment contracts are a common practice but they are more flexible and the termination process is less complicated compared to the EU countries.

EU: The employment contract has strong employee protection while termination requires a “fair cause”. Long term contracts in the EU are properly regulated in order to avoid any abuse.

Work Permits & Visas

UK: In order to work in the UK , the EU citizens have to go through a point based immigration process . For all non-UK hires, the employer is responsible for the sponsorship through the licensed sponsor system.

EU: While the EU citizens enjoy a freedom of movement across the EU and can work and reside freely in another EU country. However, non-EU citizens require a work permit to work in an EU country and the rules for which vary from country to country.

Data Privacy in the Hiring Process

UK: The General Data Protection Regulation ( GDPR) governs data protection in the United Kingdom. It is similar to the EU GDPR in many respects, but several changes have been made following Brexit and it clearly stipulates that employers must be transparent about the use of applicants' private data.

EU:The EU GDPR applies consistently across member states which have strict requirements for candidates' data privacy.

How can an Employer of Record (EoR) help?

An Employer of Record (EoR) is a third-party entity that legally employs workers on behalf of a client company and is responsible for compliance, payroll, taxes, and other administrative functions related to employment. . Here’s how an EoR can help companies handle the complexities that can arise during the UK and EU hiring.

Risk-free expansion and hiring

By partnering with an EOR, companies can expand swiftly and risk-free in the EU and UK, as they will not be required to establish local entities, which often have significant costs associated with them. They will also eliminate the risks related to employee misclassification, tax liabilities, and employment disputes.

Compliance

An EoR ensures that employment contracts, benefits, and termination processes comply with local regulations in both the UK and EU. This process helps reduce legal risk and penalties.

Payroll Management

An EOR will handle payroll, tax withholdings, and social security contributions in line with the rules of the UK’s HMRC and the various tax authorities in EU countries. They will also take care of the holiday pay rules and pension schemes; the rules vary across different jurisdictions.

Flexibility in the hiring process

With the EOR service in place, companies can test new markets or hire remote workers without committing to long-term investments. Such an arrangement can be beneficial for a business newly entering the UK or any EU state.

Assist with immigration and work permits

The EOR can advise and assist in the immigration process and work permits while hiring non-local employees both in the UK and EU. This can help accelerate the onboarding process and avoid costly delays.

Bottom Line

The different recruitment processes in the UK and the EU can pose significant challenges for organisations, particularly in terms of compliance, taxation and immigration. An Employer of Record (EoR) such as Swapp Agency offers a strategic solution that allows organisations to manage this complexity efficiently while focusing on their core business. By working with an EoR, companies can expand their talent pool, ensure compliance and minimise risk in both the UK and EU markets.