How to Test New Markets and Accelerate Global Expansion with an Employer of Record

Expanding to new markets is a strategic priority for businesses looking to stay competitive globally, but the path to international growth is often fraught with complex challenges.

Without the right resources, companies risk delays and costly missteps in navigating local labor laws and tax regulations, managing cultural nuances, and complying with compliance requirements.

At Deel, we’ve supported thousands of businesses in accelerating global expansion by leveraging our Employer of Record (EOR) services. With our expertise in local compliance, streamlined hiring processes, and payroll management, companies can confidently test new markets without the burden of setting up costly entities.

By partnering with Deel, businesses have entered new markets in weeks rather than months, secured top-tier talent, and mitigated legal risks—all while saving time and resources. Discover how an EOR can transform your global expansion strategy and unlock opportunities for sustained growth.

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

77% of employers are currently struggling to fill roles, but those who leverage the international talent pool are spoilt for choice.

An EOR’s best feature is providing easy access to global talent to lead your market testing and international expansion. That’s because you need the best local employees to confirm the market’s viability and the worthwhileness of further investments. This talent is also responsible for identifying potential obstacles and refining your strategy.

Local employees 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.

If you withdraw from a market, EORs also let you keep the global talent you hired using sponsored VISAs. You can offer to have employees work remotely from their home country or relocate to your other legal entities.

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: Best Employer of Record 2024: Insights from the G2 EOR Report

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 in over 25 countries. Compared with other hiring solutions, Deel has saved them around $500K per year.

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 and expand globally with Deel

By partnering with a global EOR like Deel, your company can confidently plan its next global move. Explore international markets with minimal financial, legal, and regulatory 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.

Book a call with the Deel team to learn more.