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EOR Global Platforms: When Big Becomes a Liability

In the last five years the world of distributed workforce management has seen a plethora of new service providers who have taken the market by storm with their highly sophisticated electronic platforms, claiming to be the only solution for successfully managing in-country risks when employing people in foreign countries.


The use of a single electronic Employer of Record (EOR) platform can be a valuable tool for managing global workforce compliance, but it may not be the sole solution to ensure protection against the transgression of local labour and tax laws. While EOR platforms can centralise and streamline certain processes, it's essential to recognise their limitations.

Here are some considerations:

  1. Platform Capabilities: EOR platforms can handle various aspects of employee onboarding, payroll, and compliance. They may include features like tax calculations, benefits administration, and regulatory reporting. However, the effectiveness of a platform depends on its capabilities, and not all platforms may cover every nuance of in-country laws.

  2. Local Law Complexity: Local labour and tax laws can be complex, with unique nuances and frequent changes. EOR providers may not have the in-depth knowledge of every jurisdiction. Specialised expertise in each country is often necessary to understand and navigate the intricacies of local regulations.

  3. Legal and Cultural Context: Understanding local laws goes beyond mere compliance; it involves interpreting legal nuances within the broader cultural and business context. Local specialists possess the cultural awareness and legal acumen to ensure compliance while aligning with local business practices.

  4. Risk Mitigation: Relying solely on a platform without local expertise increases the risk of non-compliance. Penalties for violating labour and tax laws can be severe, and using specialists in each country helps mitigate these risks by ensuring adherence to the latest legal requirements.

  5. Dynamic Regulatory Environment: Regulations are subject to change, and staying updated on these changes is crucial for compliance. Local specialists are better equipped to monitor legislative developments and adapt strategies accordingly.


In conclusion, while EOR platforms can provide a centralised solution for certain aspects of global workforce management, they should ideally complement, not replace, the expertise of specialists who understand the intricacies of local labour and tax laws. A comprehensive approach involving both technology and local expertise is often the most effective strategy for ensuring compliance in a global context.

It is for this reason, that the most successful EOR platform providers actively seek to partner with local service providers who complement their offering with in-country specialists who are able to help then stay abreast with local laws and nuances. Of course, this adds another layer of cost to their already expensive technologies, making the prices charged for the service, prohibitive for many clients.


Indeed, we are seeing a return to specialist, in-country service providers as clients place the need for compliance and the ability to successfully navigate in-country laws above the convenience of having all their global employees and contractors on one platform. In fact, many contractors and employees on these platforms complain about being treated as a number and miss the personalised service provided by specialist, in-country EOR service providers.


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