How Employer of Record services cut hiring and admin costs

Cut costs, stay compliant, and expand globally into 150+ countries  - talk with our team to see how EOR services can make your international hiring simple and affordable.

• When hiring overseas, Employer of Record (EOR) services lower overheads by removing the need for local entities and HR infrastructure.
• They streamline payroll, compliance, and benefits administration, saving companies time and money.
• EOR providers enable faster, more cost-effective global expansion with reduced risk.

In years gone by, going global was the territory of large, long-established businesses. Today, expanding overseas is a strategy used by start-ups and SMEs to drive innovation in the early stages of their operations. That’s why Employer of Record (EOR) is on the lips of clued-in business leaders the world over.

In fact, in 2024, analysts valued the global EOR market at approximately USD 8.3 billion. Experts predict it will reach USD 18.2 billion by 2033.

Using an EOR reduces costs while still allowing organisations to attract and retain top talent. The complexities associated with hiring abroad – such as payroll management tax compliance, varying local employment laws and benefits administration – are instantly simplified when a business chooses to partner with an EOR.

This is because the EOR acts as the legal employer on behalf of companies. Clients instantly reduce hiring costs, HR overheads, and administrative burdens. Leaders can then focus on growth and productivity.

What is an Employer of Record service?

An Employer of Record (EOR) service is a third-party provider that legally employs workers on behalf of a company.

The client organisation manages day-to-day responsibilities and tasks. Meanwhile, the EOR takes care of all employment-related obligations. These include contracts, payroll, tax filings, employee benefits such as health insurance, and compliance with local labour laws.

For businesses expanding into new markets, an EOR acts as the employer without requiring the company to establish a legal entity in that country. This reduces both upfront and long-term administrative costs while ensuring compliance.

For more information, visit our Ultimate guide to Employer of Record.

Reducing hiring costs with EOR services

Hiring a global workforce can be expensive when handled independently. Setting up local branches, recruiting HR staff, and navigating local employment regulations all add significant costs. By using an EOR, businesses can reduce these expenses in several ways:

No need for local entities

Establishing a branch in a new country requires legal, financial, and administrative investment. An EOR eliminates this need, providing immediate access to new markets at a fraction of the cost.

Lower recruitment overheads

EOR providers often support the hiring process with compliant employment contracts and human resource expertise, avoiding costly mistakes and delays.

Scalable hiring

Businesses can scale up or down quickly without worrying about the long-term cost of maintaining entities or HR infrastructure in multiple countries.

By simplifying hiring processes and removing barriers to entry, EOR services enable companies to expand globally with reduced financial risk.

Reducing administrative costs

Beyond hiring, day-to-day HR administration consumes significant resources. An EOR reduces these burdens by managing essential functions:

Payroll management

Accurate payroll processing across multiple jurisdictions is complex and time-consuming. EOR providers handle all payroll tasks, including tax deductions, social security contributions, and salary disbursement.

Compliance assurance

Employment laws differ widely between countries and are subject to frequent change. An EOR ensures businesses remain compliant, thus reducing compliance risk by preventing fines and penalties.

Employee benefits and insurance

From pensions to healthcare, EORs administer benefits packages in line with local legislation, removing the administrative burden from internal HR teams.

Contract management

Drafting and maintaining employment contracts in multiple languages and legal systems is both costly and risky. EORs ensure contracts are legally sound and compliant.

By outsourcing these functions, companies can reallocate time and resources to revenue-generating activities instead of administrative tasks.

Enabling faster global expansion

One of the most valuable aspects of an EOR is the ability to expand internationally with speed and efficiency. Traditional expansion methods, such as setting up a subsidiary, can take months and involve high legal costs. EOR services allow companies to hire talent quickly. This reduces the time-to-market for new projects.

Additionally, an EOR reduces the risk of non-compliance, which can lead to fines, legal disputes, and reputational damage. This assurance makes global expansion more cost-effective and sustainable in the long term.

Cost savings through reduced risk

Financial risk is one of the largest hidden costs of international hiring. Misclassifying employees, mishandling tax obligations, or breaching labour laws can result in fines and litigation. An EOR mitigates these risks by ensuring full compliance with local regulations. By reducing exposure to these financial pitfalls, companies enjoy measurable cost savings.

How EOR services improve efficiency

Efficiency is as important as cost reduction. EORs consolidate HR, payroll, and compliance functions under a single provider. Businesses then avoid duplication of tasks across departments and countries. This streamlined approach means fewer administrative errors, less time spent on problem-solving, and smoother operations overall.

For fast-growing companies and start-ups, EOR services can be the difference between stalling expansion and entering new markets quickly and profitably.

Employer of Record services provide businesses with a cost-effective way to hire internationally. They reduce administrative burdens, and ensure compliant with local laws.

EOR solutions help companies save money while focusing on growth. They eliminate the need for local entities. EORs also streamline payroll and HR tasks, and mitigate financial risk, .

Why Mauve Group’s EOR solution is right for you

Mauve Group is a leading provider of global employment solutions with almost 30 years of experience supporting international businesses. With a network covering more than 150 countries, Mauve Group offers expert Employer of Record services that reduce costs, ensure compliance, and enable seamless global expansion. Whether you are a start-up exploring new markets or a multinational seeking efficiency, Mauve Group delivers tailored solutions that simplify international hiring.

Frequently Asked Questions

1. How do Employer of Record services reduce hiring costs?

EOR services remove the need to establish local entities, draft employment contracts, and manage recruitment compliance, significantly lowering hiring expenses.

2. Can an EOR service help reduce administrative burdens?

Yes. EOR providers handle payroll, compliance, benefits, and contracts, saving businesses time and money on HR administration.

3. Why are EOR services beneficial for global expansion?

EORs enable companies to enter new markets quickly without the high costs and risks of setting up legal entities, ensuring compliance and reducing financial exposure.