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Hiring via an employer of record in Estonia is an excellent option for any company looking to quickly and compliantly onboard top talent without needing a local entity in Europe’s most digitized country.
Widely referred to as an EOR, an employer of record recruits and onboards international professionals on behalf of customers, providing easy access to a global hiring pool.
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While those professionals are officially employed by the EOR, they report directly to the customer, meaning you can have international team members in place in little more than the time it takes to find them.
That is something your employer of record in Estonia will be able assist with, having an established recruitment network and strong understanding of the local job market.
Note that an employer of record in Estonia may also be known as an international professional employer organization (PEO), and while some providers use EOR and PEO interchangeably, others distinguish between the two services.
If you are interested in tappping into the talent on offer in Estonia or anywhere else, contact us to find out how we can help.
While Estonia is a country of modest proportions and sparsely populated, it is well-known for having achieved a high degree of digitization, with extensive internet access, information technologies (IT) learning programs, automated government procedures, and the facility to establish and manage a business in this territory from any part of the world.
The digitalization program implemented by Estonia led it to become the first to offer electronic residency to people outside the territory to “move towards the idea of a country without borders.”
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As a technology leader in Europe, Estonia has been the cradle of several successful startups, such as Skype, TransferWise, Bolt, and Pipedrive, so it will be easy to find highly skilled software developers and other IT-related professionals.
Why invest in Estonia? The Estonian market at a glance
Located in the northeast of Europe and covering just over 17 square miles (45 square kilometers), Estonia is the smallest of the three Baltic countries, which also include Latvia and Lithuania. In recent years, the country has become known for its administrative speed, driven in part by its enthusiastic adoption tech solutions.
Estonia began its journey towards digitalization in the mid-1990s, setting the foundations for it to develop into the most digitized nation in Europe, as it is today.
Almost all official processes can be realized online, with the “e-Estonia” diogitization push including programs such as X-Road, a national integration platform to reduce data exchange costs; e-ID and digital signature, a digital ID based on the ID card, and e-Residency, which allows anyone in the world over the age of 18 to register a company in Estonia.
With a yearly GDP per capita of 28,000 US dollars, Estonia is a developed nation. Since its independence in 1991, it has been committed to the liberalization of its economy by encouraging foreign investment and privatization. It is worth mentioning that companies registered in this country do not pay income tax on reinvested profits. Foreign and domestic investments in Estonia are treated equally under the law.
The country has been a member of the European Union since 2004 and adopted the euro as its official currency in 2011. Its official language is Estonian, but Russian and English are also widely spoken. In fact, Estonians have a high level of English, ranking 26th out of 111 on the latest EF English Proficiency Index.
Estonia provides a welcoming environment for startups and is home to a thriving tech sector. According to the Estonian Startup Database, 1,446 registered companies come from sectors such as transportation, logistics, fintech, cybersecurity, communications, and business software & HR, to name a few.
Tallinn, the capital, is the largest city in this country and an important financial, political, cultural, and educational center. While it is one of the best preserved Gothic cities —is listed as a UNESCO World Heritage Site— it has been labeled the Silicon Valley of Europe, thanks to its economically active population oriented towards entrepreneurship, innovation, and disruption.
Estonians are taught programming and computer science from a young age, and in some high schools, they are trained to create bitcoin applications, while universities produce a higher proportion of STEM graduates than most other European countries.
That has helped the country emerge as a source of top talent in the likes of IT, software development, telecommunications, and robotics, and many people seeking to work with an employer of record in Estonia do so to hire these types of skilled professionals.
Why hire an employer of record in Estonia?
If you want to expand your business efficiently and hire the best local talent quickly and compliantly, do it through an employer of record in Estonia.
An EOR provider has a well-established recruitment network of top professionals and will help you identify the strongest candidates with the best track record to fill the vacancies you have in your company.
In addition, an employer of record in Estonia will be familiar with the bureaucratic formalities that may arise when doing business in this Northern European country, both at the federal and municipal levels and in several areas.
By acting as your employer, an EOR will not only help you find and lease top employees but will assume all legal responsibilities arising from acquiring talent in another country, no matter where you are located.
Thus, having an employer of record in Estonia is a reason to feel confident and focus on growing your business, as it eliminates the risk of unexpected legal difficulties or financial penalties associated with non-compliance.
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As a company that has just added a new member to its international team, you will have complete control over your employee, from onboarding to workloads, responsibilities, and schedules, as they will report directly to you.
Meanwhile, your employer of record in Estonia will manage the payrolls and other administrative duties, such as drafting employment contracts, allowances, and all benefits derived from an employment relationship.
Depending on the number of employees and the terms of services provided, your EOR will charge a fee. Generally, this rate is monthly and is calculated for each employee hired. Additionally, you will have access to all the accounting of the charges made to you.
Employment regulations that an employer of record in Estonia will handle
According to the Labour Inspectorate, these are the employment regulations that your employer of record in Estonia will be responsible for:
Salary: In Estonia, the minimum wage as of 2023 is €4.30 per hour, about US$4.50. Separately, the minimum monthly income for a full-time employee is €725, about $765. There are also special rates for overtime (time and half), holidays (double time), or night work (time and quarter).
Hours: Full-time work is 40 hours, eight hours per day in five days. The employer and employee may also agree on shorter working hours, that is part-time work, which may be four hours a day. There is also a condensed working time arrangement: working hours may be distributed differently according to peaks, which means that an employee may work six hours a day in one week and ten hours a day the following week.
Contracts: An employment contract must be set down in writing and specify the employee’s working hours, salary, method of calculating the compensation, and procedures for settling the wage. There are also temporary contracts, which ensure that employees enjoy equally favorable conditions of rest and remuneration.
Vacations: An employee is entitled to paid annual holiday of at least 28 days and, in exceptional cases, up to 35 days. Unused yearly vacation is reimbursed in cash only at the expiration of the employment contract.
Benefits: As a member of the European Union, companies hiring employees in Estonia must guarantee free medical care, sickness or occupational accident allowances, pensions, unemployment compensation, and benefits for children, such as childcare.
Other obligations: According to the Equal Treatment Act and Gender Equality Act, an employer must protect employees against discrimination, follow equal treatment, and promote gender equality. This means offering the same opportunities, wages, and career plans to men and women regardless of race, color, religion, or other beliefs, age, physical condition, or sexual orientation.
How to hire professionals via an employer of record in Estonia
To hire professionals via an employer of record in Estonia, you will need to follow these six steps:
1) Outline employee profile
As part of its digitalization, Estonia adopted a strategy of lifelong learning in IT for enthusiasts of any age, so finding specialists in this sector will not be complicated. However, you must first define the employee profile that best suits your business goals in this country.
Your employer of record in Estonia will help you step by step with the job description, including the knowledge, experience, and soft skills the ideal candidate should have. Then they will publish vacancy announcements on their channels until they find the best candidates through local contacts.
2) Start preliminary screening
As soon as the job applications start arriving, your EOR will first evaluate them, then discard those that do not meet the established requirements and select the most complete ones according to your needs.
Reception of resumes and motivation letters should have a deadline, which you can also set with the advice of your employer of record in Estonia. Once the strongest profiles have been identified, your EOR will schedule the initial interviews.
3) Stage initial interviews
Based on your comments about the most competitive candidates for the position and the profile you are looking for, your employer of record in Estonia will schedule a round of interviews.
Interviews can be in any language you consider essential. In this European territory, for example, Russian and English are widely spoken in addition to Estonian, so that you may encounter bilingual or multilingual profiles.
4) Hold in-depth interviews
In-depth interviews are an indispensable recruitment method for evaluating knowledge, experience, and specific skills to fill a position. This will help you separate out the cream of the crop.
You or a team representative can organize these remote meetings to talk to the candidates shortlisted by your Estonian registered employer. While your EOR assists you throughout the selection process, you have the final say in the end.
5) Make a job offer
Choosing the candidate for a particular position takes time, but once you have decided who will join your distributed workforce, your employer of record in Estonia will handle the recruitment formalities.
The legal employer will draft the job offer and establish an employment contract based on your needs and local regulations. The candidate and your EOR will sign that contract, and once the process is closed, non-selected candidates will be informed.
6) Onboard new team members
Onboarding is one of the key stages in the employee life cycle, and it can start faster than you think when you trust your employer of record in Estonia, who, with their expertise, can speed up all the previous steps.
At this stage, the newcomer is excited about their new job. It is up to you as the employer to make them feel welcome, go over their duties and responsibilities, and coordinate the provision of any equipment they need to perform their duties.
Serviap Global is an employer of record in Estonia
At Serviap Global, we can assist companies seeking international PEO / EOR services in over 100 countries worldwide, including Estonia. We also offer global talent acquisition services to support with international direct hires.
We started out in Mexico in 2010, before expanding throughout Latin America and becoming known as experts in the region. Our growth then continued beyond the Americas, and today we are able to assist companies in 25 European countries, as well as across Africa and Asia-Pacific.
Contact us to find out more about how we can assist you.
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