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Trends & Insights

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How Enterprises Can Leverage EORs to Conquer Global Markets

The saying “change is the only constant,” has never been more accurate than in the volatile world of global business. One change that’s making waves is the rising adoption of Employer of Record (EOR) services.

According to a CFO Research survey, a whopping 58% of companies are riding this wave to support their global business strategy, or they’re gearing up to do so in the next three years.

But why are enterprises strapping themselves in for this ride with EORs?

Testing the Waters Before Diving Deep

EORs are the golden ticket for companies looking to dip their toes in new market waters before going all in. They provide a safe space to test products and services, sniff out potential challenges, and adapt offerings to the unique local market pulse—all without the need to set up a legal entity. This strategic move allows firms to validate their assumptions and make data-backed decisions, thereby reducing risks associated with entering new markets.

Imagine being able to build a robust local team even while the wheels of incorporation are turning. That’s precisely what EORs facilitate. They empower companies to hit the ground running, effectively creating a local brand presence even as the legal paperwork is being sorted. By the time the local office is up and running, the team is already knee-deep in action, significantly accelerating market entry.

Seamless Transition: Firing on All Cylinders

Global expansion can be like navigating a complex maze of legal, HR, and tax compliance. According to the CFO Survey, more than half (51%) of senior finance executives see these compliance challenges as substantial barriers to their international strategy. But an effective EOR partner helps circumvent these obstacles. The beauty of EORs is the ability to transition the local team from the EOR to the newly established entity seamlessly. It’s like smoothly shifting gears while cruising on a highway. This smooth transition aids in setting up local payroll operations, ensuring business continuity, and retaining the hard-earned local talent pool, keeping the business engine firing on all cylinders.

EORs offer a versatile range of solutions. From morphing freelancers into full-time employees and facilitating employee relocations to being flagbearers of the remote-first trend and ensuring immigration compliance, EORs are the go-to tool for enhancing operational efficiency and flexibility. They can help enterprises ensure compliance with tax laws, labor laws, and international trade laws and agreements.

Cost and Time Efficiency: The EOR Trump Card

Here’s the trump card of EORs: they save companies heaps of time and money. They act as the safety net for companies needing to kickstart overseas operations posthaste, hire numerous employees from countries where they don’t have an entity, or shield their intellectual property on a global scale. By reducing the risks associated with global expansion, EORs allow enterprises to keep their eyes on the prize—their core business.

A Harvard Business Review analysis of 20,000 companies in 30 countries found that companies venturing abroad had an average Return on Assets (ROA) of -1% even five years after their move. It took them a decade to eke out a modest +1% and only 40% managed to churn out more than 3%. However, by employing EOR services, companies can fast-track this journey, ensuring quicker and more robust returns on their international operations.

In a world where the number of large companies (259+ employees) has doubled since the turn of the century, and global expansion plans have exponentially increased, EORs have become the guiding North Star. Even though international expansion comes with its fair share of trials and tribulations, EORs like Multiplier are helping enterprises to minimize these challenges.

Contact us to know more.

Ria Thomas
Ria Thomas

Product Marketing Manager

Ria is a Product Marketing Manager at Multiplier

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