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.