The Employer of Record model has positively entered its next phase now

The Employer of Record (EOR) services have become a cornerstone of global hiring and international expansion strategies. Valued at $5.2 Billion in 2023, the market is expected to exceed $13 Billion by 2032, growing at nearly 11% CAGR.

Initially adopted for speed and flexibility, EORs helped companies enter new markets without setting up local entities. Today, however, the conversation has shifted. As cross-border hiring scales, employee experience, payroll compliances and HR risk management have emerged as critical business risks and competitive differentiators.

The hidden engagement problem in EOR hiring

According to Gallup, only 21% of employees globally were engaged in 2023. For EOR-hired employees, engagement levels are often lower. The reason: many EOR workers experience gaps in benefits, career growth opportunities, and cultural inclusion compared to directly hired employees. Over time, these gaps erode motivation and loyalty, increasing attrition, rehiring costs, and productivity losses.

Four employee pain points companies can’t ignore

1. Benefits Inequity: EOR employees often receive limited or inconsistent benefits such as reduced health coverage, missing retirement contributions or exclusion from equity plans. Even when legally compliant, perceived inequity damages morale and employer branding credibility.
2. Career Stagnation: Despite delivering core business outcomes, many EOR employees feel like permanent outsiders with limited access to mentorship, promotions, or leadership tracks. This disengagement directly drives employee turnover.
3. Tax and Social Security Complexity: Cross-border employment introduces confusion around double taxation, social security portability and local compliance obligations. For employees, this creates financial stress; for employers, it increases audit exposure and liability risk.
4. Cultural Disconnection: Without intentional integration, EOR employees remain detached from the client organization’s culture, values and teams, weakening collaboration and long-term commitment.

Together, these challenges translate into higher workforce costs, compliance exposure, and a distorted view of true talent ROI

Regulation is tightening globally

Governments are rapidly closing protection and compliance gaps:

• EU & UK: Stricter worker classification and statutory benefits enforcement
• United States: Benefits and tax parity requirements across employment models
• Asia (including India): Expanded labor codes mandating social security contributions and detailed compliance documentation
• Data Privacy Worldwide: GDPR-style laws demanding stronger payroll and HR data protection

The cost of getting this wrong has shifted decisively from reputational risk to financial penalties, retroactive liabilities, and even loss of operating licenses.

Key takeaways for decision-makers

• Audit your EOR model: Benefits parity, worker classification, and data compliance matter more than ever
• Factor engagement into cost: Low belonging quietly inflates attrition and rehiring expenses
• Plan for regulatory tightening: Future-proof contracts and operating models now
• Choose transparency over speed: The right EOR partner converts compliance into competitive advantage

EOR models have evolved from hiring shortcuts into strategic levers for compliance, employee engagement and global work force management. The future of global employment will be defined by how fairly, transparently and compliantly they do so.

With PR GLOLINKS as your Employer on Record partner in India, you gain the freedom to scale globally backed by the confidence of full compliance.  

Reach out to our EOR experts today to learn how we can help you expand internationally with reduced risk and stronger employee engagement