EOR up, Hiring up, Fintech in, Culture out?

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EOR PEO latest Feb 20 2023 week

The EOR market continues to make the right noises. We bring you the right music from all the noise.

Economy is down, Hiring is up, and EOR upward

Deel Lab, a part of employer-of-record provider (EOR) Deel released its findings from an interesting survey on global hiring and firing. According to Deel, hiring momentum sustained throughout 2022. Interestingly, 89% of the contracts were for remote workers. The “global worker model” is indeed picking up. According to Deel, “The survey aggregated data from more than 260,000 of its teammate contracts, over 15,000 customers across more than 160 countries, and more than 500,000 data points from third-party sources including Microverse for the report.”

Another news supported the above market pattern. According to research coming out from Everest Group, the EOR (employer-of-record) market continues to grow. In 2022, EOR market grew by 120%. It is expected to grow at a CAGR of 40%-50% through 2025.

Here is the news we picked up.

Note:

The Deel Lab for Global Employment is Deel EOR’s research and policy consortium In collaboration with the Conflict Analytics Lab at Queen’s University. We think it is a much-needed initiative to foster collaboration and give direction to the future of workplace management. We encourage readers to tell us more about this initiative by Deel.

Leveraging the EOR model is fine. What about culture?

The famous management thinker Peter Drucker is quoted as saying “culture eats strategy for breakfast.”

Essentially, Drucker was emphasizing the ‘People’ factor for any business to be successful in the marketplace. Irrespective of market, strategy, capital, and luck; business success will ultimately be the result of the actions of the people in critical non-normal situations. Culture is something team members do when no one’s looking.

We came across this interesting article on EOR Pros and Cons that mentioned this point. Kudos to the startupguys team for bringing this out. It is definitely something top executives will have to think through when leveraging EOR for business growth.

EOR UK, anyone?

Are you thinking of starting a permanent business establishment in the UK? Or are you just contemplating taking employer of record services to get started quickly with your UK business?

The Lexology team has put together a nice 1-page primer on what routes you can look at to get started with your business in the UK.

If you are sure about taking an EOR approach, you may want to watch out for Permanent Establishment (PE) risks. The Lexology posts mention that EOR UK contracts pass on employee liability risk to the international business that they contract with it. Would that work for you? Please think through all this.

Fintech meets EOR as G-P shakes Wise hands

G-P Wise collaboration was anything but natural.

Imagine being a continuously growing EOR services company with not-so-modern payment solutions. Tough, isn’t it?

Employer of record companies such as G-P and many others have demonstrated the ability to scale quickly across the world. G-P today boasts coverage of over 180+ countries. If that number does not make you stand up, please note that the United Nations (UN) has 193 member countries as of date. So, an EOR such as G-P covers the globe almost 100%.

Doing billions in dollars of payments each month, it is understandable that G-P signed up with Wise. We are not sure if this is an exclusive collaboration or if Wise already works with other EORs. In addition to payments collaboration, EORs could also take the following approaches to solve the payments part of their business.

  • Organic approach – Starting an exclusive payments business
  • Inorganic approach – Acquiring payment startups

Our view is that a collaboration approach may be better since payments especially cross-border payments is evolving fast. We also don’t know how Bitcoin might influence payments in the future. EORs will be served best if they do assume this complexity into their workforce management EOR business.

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