The use of independent contractors has become a key trend in the workforce today, with Staffing Industry Analysts estimating that 56% of the global workforce is made up of gig economy workers. This has raised questions from regulators who are concerned that many of these contractors may actually be misclassified employees, meaning they lack the employment benefits they would otherwise be entitled to, such as healthcare and other statutory benefits. There are several factors that are used to determine the true independent contractor status, such as the degree of subordination, responsibility for the work, and the use of own tools and equipment.
In response to these concerns, businesses and staffing suppliers are turning to employer of record or ‘EOR’ service providers. These services offer a compliant, flexible workforce for firms operating in countries where they don’t have a legal entity, as well as services such as onboarding, benefits provision, administration, payroll, and time & expense management.
The COVID-19 pandemic and status of remote working have led to increased demand for EOR services and the emergence of 12 startups with a value of over USD 1 billion. EOR and ICEC providers enable multinational firms to overcome talent shortages and expand into new countries at a reduced cost and risk. Firms are leveraging innovative