Employer of Record Market Size, Share, Growth, And Industry Analysis, By Type (Aggregator Model and Wholly Owned Infrastructure Model), By Application (SMEs and Large Enterprises), Regional Insights, and Forecast To 2032

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Employer of Record Market Report Overview

Global Employer of Record Market size was USD 4.9 Billion in 2023 and market is projected to touch 8.59 Billion by 2032, exhibiting a CAGR of 6.8% during the forecast period.

An employer of record (EOR) is a third-party organization that takes responsibility for all formal employment tasks on behalf of another company. The EOR allows companies to legally and efficiently engage with overseas workers either in a new country or state, without having to set up a local entity or risk violating local employment laws. Hiring an EOR gives the client’s company the opportunity to manage their time more efficiently and effectively.

In businesses expanding markets, also come across terms: Professional Employment Organization (PEO) and Global Employment Organization (GEO). A Professional Employment Organization (PEO) also known as an International/Global PEO, allows an enterprise to hire employees in a foreign market without the need of setting up a local entity. Although quite similar to an Employer of Record, a PEO is a service firm that generally offers a more comprehensive range of HR services. A Global Employment Organization (GEO) has properties of an EOR but is more similar to a PEO, in that it allows for the administrative HR burden to be removed from a client and instead be managed by a Global Employment Organization.

The ability to access foreign markets is one of the first and most important benefits that companies realize after hiring EOR services. With EOR, companies can easily hire remote workers from anywhere in the world and this move will greatly accelerate their business growth. Organizations are increasingly doing business online and therefore engaging the most qualified workers to achieve the greatest economic value regardless of their geographic location. Economies with an aging population or a vital need to fill a labor shortage are also likely to seek workers from outside.

The Employer of Record Solution allows a company to hire outside of their current base - they can actually go where the talent is. It can also support legal work-based immigration by sponsoring visas and work permits for jobs.

COVID-19 Impact: positively affected the market due to demand for workforce

Rapidly changing market dynamics of operating models forced human resources teams and departments to adopt new ways of responding to employee demands or labor force Hence employment of record solutions including workforce leadership, talent management, recruiting   are expected   higher demand after COVID-19.

The transition to a remote work culture and virtual collaboration is one of the most important   organizations that have adopted the public to solve complex challenges, health and economic disaster. The service helped professionals manage records of employees and effectively manage some other functions. During the pandemic, major market players focused on partnership, collaboration and research and development that helps organizations manage their workforce

Latest Trends

"Robotic process automation is a new trend in market"

Robotic process automation technology plays an important role in efficiency and innovations in employee record solutions and enables organizations to provide better talent strategies. Companies are looking for new ways to hire experts and offer new services at lower costs. RPA features embedded in Artificial

Artificial intelligence (AI) and machine learning enable companies to standardize their operations   Elimination of additional IT costs. Market players offer advanced tools that are integrated with RPA to meet the requirements of end users. Thanks to the positive results of RPA integrated into employer of record, the employer of record market players are likely to combine RPA with employer of record including recruiting software and application tracking system in employee record solutions.

Employer of Record Market Segmentation

• By Type Analysis

According to type, the market can be segmented into aggregator model and wholly owned infrastructure model.

• By Application Analysis

Based on application, the market can be divided into SMEs and large enterprises.

Driving Factors

"Global Recruitment and Removal of Local Labor Law Restrictions to drive market trends"

Any global company considering overseas expansion needs the right people to make the project a success - and often that means hiring locally. Employees are a company's most important resource, and their use can make or break an expansion project. Companies could choose to bring foreigners to a new country or hire locals who know their market inside out.

Due to differences in local labor and tax laws, global employment can be difficult and the penalties for getting it wrong can be high. Google was criticized last year for not properly paying its workers in the UK, Europe and Asia, a move that could have significant financial consequences. The Global Employment Service ensures that all international employees work in the country and receive a legal wage. For global employment or entering new international markets, employee compliance is key. Professional staffing services give businesses the peace of mind that all local regulations are being properly followed, leaving them to focus on the logistics of expansion.

"Software Working as an Alternative in Setting Up Legal Entity to Augment Its Demand"

Global expansion is a big step and the last few years have shown us that the business environment is anything but predictable. Of course, companies may want to try a target on for size before asking their resources for the long term.

Employer of Record offers businesses a presence in new locations without having to go through the timelines and financial burdens of setting up their own business. The mechanism is also useful when the project is temporary.

Once they realize the success of their product or service in this employer of record market growth, they may want to establish their operations locally. Employees can be transferred by the Employer if the company is operating and providing work.

Restraining Factors

"Risk of data privacy to hinder market growth"

Employee record solutions provide effective digital employee management   to the clients or companies. they can control payroll, forms, and other employee performance with a few clicks in the system. 

Due to COVID-19, social distancing has played a crucial role in the transition of businesses traditional communication and collaboration methods with digital infrastructure. The employee of record solutions has proven to be a successful way to run companies with ease in restrictions. The transition from the workplace to working at home has been a huge experience for companies, a challenge in addition, employee records also increase information security risks. Therefore, it is also reviewing employee record solutions to ensure it meets your specific security needs is essential for personnel management. Lack of data security and privacy can be an obstacle employer of record market growth.

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Employer of Record Market Regional Insights

"North America will dominate the market due to the growing job opportunities in the region"

North America held the largest market share in the global market in 2021 due to Headquarters presence at leading employee record solution providers such as deel rising job opportunities in the region, Remote tech, remote team and Papaya global.  this increase in job opportunities in the US and Canada, the demand for concrete talent and recruitment solutions. 

Asia Pacific will witness the highest growth during the forecast period.

A wave in partnerships, financing and investments to further expand small and medium-sized businesses that are expected to accelerate the growth of the market in this region.  Growing adoption of technologies such as cloud, artificial intelligence and ML is expected to facilitate demand for employee record solutions in the industry

Key Industry Players

"Key Players Focus on Partnerships to Gain a Competitive Advantage"

Prominent market players are making collaborative efforts by partnering with other companies to stay ahead of the competition. Many companies are also investing in new product launches to expand their product portfolio. Mergers and acquisitions are also among the key strategies used by players to expand their product portfolios.

LIST OF TOP EMPLOYER OF RECORD COMPANIES

• Adecco
• Randstad
• Aquent
• FoxHire
• Infotree Global
• Safeguard Global
• Velocity Global
• Globalization Partners
• Shield GEO
• Acumen International
• Remote Team (Gusto)
• Deel
• Remote Technology
• Elements Global Services
• Papaya Global
• Universal Hires
• CIIC
• Links International
• New Horizons Global Partners
• Sky Executive

Report Coverage

This research profiles a report with extensive studies that take into description the firms that exist in the market affecting the forecasting period. With detailed studies done, it also offers a comprehensive analysis by inspecting the factors like segmentation, opportunities, industrial developments, trends, growth, size, share, restraints, etc. This analysis is subject to alteration if the key players and probable analysis of market dynamics change.