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What is an ‘employer of record’ and can it help HR? | Jo Faragher

Sourcing skills in the UK can be difficult enough, but HR faces a world of challenges when trying to build global teams or supporting the business to enter new markets. What is the ’employer of record’ model and could it help? 

It’s easy to assume that the rise in remote working – and an increase in so-called “digital nomads” – since the pandemic has benefited employees more than bosses. The term digital nomad seems to conjure up images of working in a laptop with a view over the sea, tagging oneself in a picturesque Instagram post while a frustrated manager back at headquarters chases up a deadline.

But this movement has also swung in favour of employers who are struggling to fill vacancies with local talent. As a result, the employer of record (EOR) market has swiftly grown and evolved in the past two years and will grow at a rate of 6.5% per year to be worth around $205 million (£159m) by 2029, according to analysts.

What is an employer of record?

When a business uses an employer of record, they work with a third-party organisation that becomes the full legal employer of specified overseas workers or teams, managing everything from visas and right-to-work issues to onboarding, pay, and taxation.

Because the companies that offer EOR services do so for multiple organisations, they are able to deploy technology and expertise at scale, so can handle any issues more quickly and consistently than might be possible with an in-house HR team. “Companies want…

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