Employer of Record for Global Expansion and Market Testing

Global expansion is essential to follow demand and outdo competitors. As 77% of employers are currently struggling to fill roles, gaining access to an international talent pool also increases the chances you’ll find the best candidates to help you grow your business.

However, testing new markets may not always pay off, and taking this step alone brings legal and financial risks to your company. Navigating complex employment laws, regulatory constraints, and cultural differences can also burden your HR team.

An employer of record (EOR) like Deel supports international expansion while eliminating the risk. Let us show you how.

The role of a global employer of record (EOR) in international hiring

An EOR is a service provider that assumes responsibility for your international hires. While you contract and oversee these workers, the EOR is the legal employer. You can also manage payroll taxes and benefits administration through them.

Using EORs bypasses the time-consuming and costly process of entity setup and enables you to hire employees (and in some cases, also independent contractors).

Leveraging a global EOR for market testing

The advantages of EORs go beyond the initial hiring phase. These providers make exploring new markets more cost-effective, and lower risk as you can gauge your product or service’s viability more efficiently than you would by establishing an entity.

Let’s unpack these benefits in more detail.

Speed to market is key during expansion. Global businesses must establish themselves quickly enough to capitalize on demand or talent before conditions change. Given that international employment is more popular than ever—89% of contracts created on the Deel platform are remote—they face a lot of competition too.

EORs use their pre-existing entities to establish you in new countries within weeks. You can also test multiple markets at once. For instance, Veriff used Deel EOR to set up in the UK and Germany.

EORs also enable you to allocate your resources more effectively if you outsource HR tasks to them. They use their expertise to streamline processes like managing payroll services and comparing local benefits packages.

Meanwhile, your human resources department doesn’t have to absorb the extra work—Deel customer, Change estimates our EOR reduced their monthly workload by 300 hours.

Managing ongoing compliance risks, which involve legal and regulatory compliance, financial (payroll) compliance, employment laws, and data protection and privacy, is also easier through an EOR. Legal frameworks vary by country, so working with local experts is absolutely necessary to reduce non-compliance risks and prevent potential financial and reputational damage to your company.

For example, relying on Deel's in-house expertise allows you to:

• Localize contracts and collect all the required paperwork for hires
• Store, manage, and review documents in one place
• Keep up to date with changing labor laws and regulations with regular contract reviews
• Manage payments for government fees and social contributions 
• Stay compliant with data protection and privacy laws 

Plus, having the EOR act as the sole legal employer eliminates the risk of you being seen as a permanent establishment abroad and receiving extra fees.

Harnessing global talent for successful market tests

An EOR’s best feature is its easy access to global teams to lead your market testing and international expansion.

That’s because you need the best local employees to confirm the viability of the market and confirm further investments are worthwhile. These teams are also responsible for identifying potential obstacles and refining your strategy.

Local employees also have many advantages over relocated ones. Using their experience and knowledge of the culture, they should be able to:

• Know how to create the best possible impression of your company
• Tell you which marketing strategies will work best
• Build quick relationships with customers and partners
• Reduce misunderstandings due to cultural differences and mistranslations
• Find the most reliable sources of data

In fact, local employees can be make-or-break for global expansion. For example, retail giant Walmart failed to enter the German market and lost $1 billion (USD) in the process. A local hire could have told them not to brand themselves as low-cost when German consumers prefer high-end goods.

EORs not only recruit staff quickly but also allow you to scale and adjust. If you expand via mergers and acquisitions, they can help you minimize risks and integrate inherited talent.

💡See also: Integrating Inherited Talent: 7 Key Steps for Enterprise M&A

Successful strategies for global staffing with EOR

While EORs offer a lot of assistance, you’ll still be involved in plenty of decisions. Here are some best practices to help you make the most of the relationship with your provider and guarantee further success.

• Get the best deal: EOR offerings vary but you can cut down on research by creating a Request for Proposal (RFD) and letting providers make you offers
• Explore the different use cases of EORs: There’s no need to stop at global hiring and expansion when EORs like Deel also assist with payroll and HR tech consolidation
• Attract and keep top candidates: Use your provider as a retention and hiring strategy by advertising your newfound location flexibility
• Clarify your target market: Gather industry insights, advice, and support from your EOR customer success manager to deliver your product and services to the target market the right way
• Collaborate with the EOR on onboarding: There’s some overlap between setting up new employees and welcoming them to your business. Discuss the onboarding sequence, timeline, and activities with your EOR to make sure you’re aligned
• Focus on employee experience: Working in different places and time zones can create distance between teams. Help them stay connected with your EOR’s collaborative tools like Deel’s Slack plugins

The most critical aspect of global workforce management strategies is choosing the right EOR solution. Top providers let you enter multinational markets, offer comprehensive features, and have competitive pricing. As the Oursky team has noticed, your EOR’s reputation also has an impact on your success.

Customer support is also key. Teamflow’s previous provider didn’t have 24/7 support which meant a $100,000 problem took a week to solve.

💡 See also: The Benefits of a Dedicated CSM: How Deel Sets You Up for Success 

Our clients' stories: How Revolut, Project44, and others expanded globally with success

If you’re curious about the impact an EOR could have on your global expansion plans, here are some real-world success stories.

Popular banking app Revolut wanted to build the world’s first global financial service so international employment was essential to their mission.

HR manager, Luke Besling credited Deel EOR with giving the fintech company its competitive edge: “Thanks to Deel, we get to hire local talent in any country where we want to expand long before we set up the entity there. Effectively, this gives us a head start.”

Like Revolut, Project44 requires robust global support to manage operations across over 25 countries. Deel has saved them around $500K per year compared with other hiring solutions.

While it’s easy to focus on financial success, let’s not forget the effect EORs have on company culture. French company, Slite found they could help employees achieve their dreams of relocating and helping others.

Unlock new markets fast with Deel

With access to global EORs, your company can plan its next global move with confidence. Explore international markets with minimal legal and financial risk, source the best local candidates, and establish your presence in virtually no time.

Deel eliminates borders as the world’s largest EOR provider. We have local entities in over 100 countries so you can use our proven system to adapt to any market changes and go where the demand takes you.