SA budget to impact foreign employers, EORs growing unprofitably, and a Rural PEO

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EOR PEO latest Mar 26 2023 week

Are Governments waking up to employment models where foreign players can bypass local employment rules using EOR service providers? And can EOR PEO space continue growing fast at the expense of margins?

South Africa’s budget to change playing field for foreign employers

EORs and PEOs need to watch out for this change that might come up in South Africa. Other countries might probably follow in South Africa’s footsteps if the proposed change in the South African budget goes through.

According to the news item picked up by, the South African Treasury and the South African Revenue Service (SARS) may ultimately require foreign employers to register as “employers” with the revenue service. The intent of the South African Government isn’t to discourage foreign employment. The idea is to bring employee registration requirements at par for both resident and foreign employers.

The move is expected to create many practical issues for foreign employers. But, several possible solutions may spell opportunities for PEOs and EORs.

It is a landmark change that we will be closely monitoring.

PayChex PEO vs Papaya Global vs Justworks vs Engage PEO

We picked up the Forbes article which talks about PayChex PEO and compares it to other PEOs such as Papaya, Justworks, and Engage PEO. It does seem like a paid promotion but the Forbes plug was picked up through our alerts system.

Here is what it says.

We just went through it again and it is an advertiser’s post. We have always wondered what purpose these serve.

In this article, the author primarily talks about PayChex. The choice of comparing brands is intriguing. We are not sure why only Papaya, Justworks, and Engage PEO were chosen as comparisons. The author could also have looked at Deel, Multiplier, and some startups.

EORs continue growing strong but what about margins

EORs are rocking growth numbers and even the stock markets. Insperity shares are up 15% in the last 6 months in what has been a lackluster year for the markets. You could argue that Nasdaq has been a strong performer in the last few months. But, it still does not take the shine away from EOR companies.

Exhibiting the strong growth trend in the global worker model, Futuris Co., a provider of staffing and employer-of-record services, also reported 25% revenue growth for the quarter closing January. Futuris’ financial numbers though brought out an important point on margins. While revenue grew 25%, gross profit fell by 46%. Does this indicate a pattern in the growth EORs are exhibiting? Or is this a one-off? It could be because of the numerous acquisitions Futuris’ has done over the last year.

Here is the news we picked up.

We should closely monitor this quarter’s numbers to see if the revenue growth, and margin contraction, is just a quarter phenomenon or an indicator of things to come.

A PEO for lawyers servicing rural markets

This is about Springer PEO

It may look like any other PEO that provides services like payroll processing, IT support, mail handling, employee benefits, and more. But, something is interesting about them. They service lawyers and law firms that focus on the rural markets. Servicing rural markets for legal cases isn’t always about fees, thus Springer PEO supports lawyers in keeping costs low thereby effectively supporting the mission of such lawyers to help rural folk access legal services.

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