For companies that want to expand their business globally, finding suitable employees in new markets can be a very demanding and even challenging process.
As a solution to this problem, the World Economic Forum recommends an approach known as Employer of Record (EoR), which allows companies to employ in foreign countries without establishing a legal entity at the local level, ensuring legal and regulatory compliance.
This includes outsourcing tasks such as payroll processing, taxes, benefits, and loan database employment contracts to companies that specialize in these areas in a given market. The idea is to streamline the hiring process, improve operational efficiency, and minimize legal complications for companies.
The global EoR services market is estimated to be worth $1.8 billion in 2022. It is expected to double to $3.7 billion by 2032 .
A niche in a sea of agencies
In Croatia, EoR is handled by Profesio, a company launched in 2018. At that time, the long-standing trend of access and communication in the labor market began to change.
Employers increasingly found themselves in a position where they needed to contact prospective employees, instead of the other way around . As a result, job advertisements were no longer equally effective, so the application of active search for employees - previously reserved for people who needed to fill senior executive positions - spread to other segments as well. On the other hand, with the growth of the IT industry, there was also an increase in the demand for temporary employment.
As its CEO Vanja Horvat told Netocracy , Profesio was created in response to these two market trends.
We realized that there is a niche in the sea of agencies that we can fill. There was a need to significantly increase the quality of EoR. Namely, the assigned employees were no longer ordinary low-skilled workers, but also IT employees and their ultimate employers - international companies.
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