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Global Employer of Record (EOR) Services 2023

Market Analysis

by Jeanine Crane-Thompson

published on Oct 31, 2023

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Report Overview:

NelsonHall’s market analysis of the Global EOR services market consists of 75 pages and focuses on strategies for 2023 and beyond.

Who is this Report for:

NelsonHall’s Global EOR report is a comprehensive market assessment report designed for:

  • Sourcing managers investigating sourcing developments within the Global EOR services market 
  • Vendor marketing, sales, and business managers developing strategies to target Global EOR services
  • Financial analysts and investors specializing in the Global EOR services sector.

Scope of this Report:

The report analyzes the worldwide market for Global EOR services and addresses the following questions:

  • What is the market size and projected growth for Global EOR services by geography?
  • What is the industry sector's activity profile in the Global EOR services market?
  • What are the top drivers for the adoption of Global EOR services?
  • What are the benefits currently achieved by Global EOR users?
  • What factors are inhibiting user adoption of Global EOR services?
  • What pricing mechanisms do Global EOR providers apply within client engagements, and how are these models changing?
  • Who are the leading Global EOR vendors globally and by geography?
  • What is the typical combination of existing and new services in Global EOR contracts?
  • What is the current delivery location pattern used for Global EOR services contracts, and how are these models changing?
  • What are the challenges and success factors within the Global EOR services market?

Key Findings & Highlights:

Economic instability will likely prevail until 2025. Factors spurring instability include geopolitical conflicts, inflationary and recessionary concerns, and the tight labor market. These influences continue generating business uncertainty, requiring organizations and vendors to secure the required workers and specialized skills from countries where they may not have an established presence. These factors drive the demand for EOR services as organizations gain a broader understanding of the benefits of this model.

Multinational firms of all sizes will remain the primary target for EOR services, with the largest concentration of adopters, 83%, operating in the small to mid-market segment (<15k employees). SMB adoption is attributable to smaller start-up organizations within emerging sectors and a lack of in-house expertise (i.e., HR, legal, accounting) dedicated to global expansion strategies.

Buyers indicate that timely access to required subject matter expertise and relevant international HR and payroll experience are primary selection factors when choosing an EOR vendor.

Critical social issues such as employee health; safety; well-being; flexible working; and diversity, equity, inclusion, and belonging (DEIB) are transforming HR and organizational culture. Future of work and corporate social responsibility (CSR) influences have triggered broader service offerings from select EOR providers, including equity management plans (e.g., ESOP, ESPP, option plans), expanded care & benefits programs, and multi-currency/cryptocurrency payroll payments. Longer-term considerations, such as 3- to 5-year retirement horizons, will support sustained growth within the industry as organizations scramble to fill critical talent and skill gaps.

Enabling technology across the global EOR services market continues to evolve rapidly. It is a critical differentiator between vendors, with many vendors repositioning from EOR/HR service providers to technology companies. Expense management, contractor pay, refining analytics, and UX enhancements are standard roadmap initiatives to deliver deeper talent insights and early organizational trends, particularly around skill gaps. Vendors will also enrich platforms with IP or via third-party technology, providing expanded HR capabilities, such as recruiting, strategic planning, and training. Intelligent assistants and the broader integration of generative AI solutions and LLMs will emerge in the next 18-24 months, empowering self-service requests.

The continued enrichment of modern global EOR solutions enables critical worker compliance, all-encompassing employee insights, and processes supporting the new era of work. While technology is a critical differentiator between vendors, with AI/GenAI, predictive/prescriptive analytics, and extreme personalization as top technology roadmap investments, vendors agree there is a delicate balance between the application of technology and human interaction.

Cloud extensibility enables organizations to design a ‘best fit’ HCM landscape by filling HR and EOR white spaces through dynamic API integrations. EOR vendors increasingly leverage technology partnerships to speed the time-to-market of tech stack and staff capabilities across functions, including AI, fintech, learning, workflow management, and time/expense management.

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