Establishing a presence overseas opens doors to new opportunities for businesses. With several factors to consider in business expansion and in employing local talents, employer of record (EOR) solutions can be useful.
EOR solutions enable companies to “hire, onboard, and manage employees in multiple countries,” according to an article from Gartner.
They can ensure compliance with local labour and tax laws while allowing full management freedom to sponsor organisations. Gartner further explained that EOR companies can handle legal and admin tasks such as payroll, taxes, benefits, and onboarding.

“A lot of times in the past, this would have been handled by staffing companies, but staffing companies have a different legal relationship with the individual. What organisations were looking for is an employment experience that looks like a regular employment experience with benefits, potential access to stock options, and visa sponsorships,” said Jim McCoy, the CEO of Atlas Technology Solutions, a technological platform serving as a large Direct EOR, with legal entities in 160 countries.
In a discussion with FutureCIO, Atlas’s McCoy talked about the benefits and challenges surrounding EOR, a relatively new industry that experienced rapid growth during the pandemic.
APAC trends in business expansion
Through his experience and background in human capital management for the last 20 years, McCoy opined that clients in Asia Pacific are primarily looking to expand.
He observed three big industries driving expansion in China—electric vehicles, solar or photovoltaic cell producers, and medical devices. McCoy observed that technology companies are also looking to expand to the rest of Southeast Asia.
He also sees the same trend in technology companies, retailers, and manufacturers in Hong Kong, Singapore, and Malaysia.
“A lot of it has to do with capital structure. Technology companies in Southeast Asia tend to be funded. Oftentimes, a company that we're the target service provider for is a company that's just finished their Series A or Series B, and is looking to expand in markets because their market might be too constrained for them to get to the growth trajectory that they're looking for,” he said.
Emerging risks
Helping companies expand overseas comes with a set of risks. McCoy shared Atlas needed to manage constantly changing regulations by having a team studying and analysing local legislations, regulations, lawsuits against other employers, and other critical information.
Geopolitical risks such as calamities and natural disasters also impact the industry. During a recent earthquake in Taiwan, for example, the government issued tsunami warnings for some countries where they have worksite employees.
“We want to make sure that everyone's okay. We have to deal with those kind of normal business risks,” McCoy said.
Emerging EOR technologies
McCoy shared how emerging technologies impacted the operations of Atlas HXM (HXM stands for Human Experience Management, aiming to replicate the best employment experience). Using an HR tool called datascalehr optimised their processes.
“We deployed AI. We know that this is an error-prone process. We have a lot of human intervention to make sure that we have no errors as we process. We went and shopped for tools. That has been remarkable because it has allowed us to keep nearly a perfect gross-to-net calculation for the payroll because we manage tens of millions of dollars in payroll every single month,” he said.
The company also spent their technology resource to enhance user interface and experience, “making sure that it feels like a seamless Atlas experience,” said McCoy.
“We are thinking about how to integrate communication vehicles so that we are delivering information not only to our worksite employees but also to our clients in a vehicle that is much more familiar and useful to them in their daily life,” he said.
Atlas also set up an insights portal where employers can access information about the policies and regulations in a particular country, such as maternity leaves and mandatory vacation policies. It can also aid in generating employment contracts.
Looking ahead
In the future, McCoy said that Atlas HXM will use an AI interface that will conversationally respond to employers’ requests for hiring.
“We have to be very flexible in adding in real-time wage and talent availability data,” he said.
Some information Atlas also envisions to provide are the number of talents available, the top competitors, the billing salary for particular talents, and the total cost of ownership for talents. This can enable enterprises to plan their workforce, and explore the total cost of ownership “so that they're making good decisions about where they want to expand,” McCoy said.
An area of great growth
One of the primary challenges in the EOR industry, according to McCoy, is when the local market flexibility does not match local employer demand. Aside from that, McCoy envisions huge potential for the industry in the coming years.
“Happily, we are moving into a market having a ton of demand. I came out of the staffing business, where the numbers have been down in the last couple of years because we are still operating in a lot of markets at full employment. But demand for EOR continues to increase,” McCoy shared.
He considers the EOR industry as an “area of great growth”. The Everest Group projected the global EOR market value to range from USD 3.1 billion to USD 3.4 billion by 2025. It is forecasted to steadily grow to USD 10 billion in 2028 based on projections from The IEC Group.
As growth expectations for the EOR market materialise in the coming years, Atlas sees business leaders realising that an EOR company is more than an extension of an HR team but a solution that can “facilitate a more flexible, compliant, and globalized future of work.”
Click on the PodChat player and hear in detail, McCoys’s perspective on the unprecedented growth of EOR solutions:
- How would you typify or describe the international expansion activities of APAC companies? Are there any distinct trends that you can observe in markets like Hong Kong, China, or Singapore?
- In terms of challenges. So for enterprises that are in expansion mode, whether global or regional there's almost always a shortage or crunch in skilled people. With the hybrid work environment, has it complicated the model of acquiring or are using an organization such as yours, the EOR, to fill in the roles that they need?
- In terms of similarities, or differences in how enterprises in markets like Hong Kong, or Singapore, or the less developed markets, like Malaysia, for example, start to look at these expansion strategies that they have, are there any unique elements, or traits that you're noticing that are unique in the sense that it's unique to Asia, or it's the doesn't matter whether it's a European company trying to expand even within the same region?
- Are there any emerging risks that an organization, like Atlas, encounters these days, as you try and employ become as you already are for other organs for your clients, that you're observing in the market now?
- What technologies have changed for you over the course of the last few years, actually?
- When you onboard a new client or new customer, what's the most challenging aspect of onboarding a new client to the Atlas way of doing business?
- If you have a large multinational client that's expanding the market, and they have existing systems and processes in place where in terms of talent management, and it doesn't sync very well with the way you've set up, how do you negotiate or make the two compatible?
- What's your biggest challenge as a CEO of this company?