Comparing Direct EOR vs. Indirect EOR vs. Payroll Services
Navigating the complexities of international workforce management is challenging. That’s why many organizations are turning to Employer of Record (EOR) service providers to help them expand internationally.
However, there are a lot of different types of workforce management solutions and EORs that you can partner with. Understanding the key differences between these means that you can make the best decision for your organisation’s needs.
Let’s compare these three service models.
What is the Direct EOR model?
A direct EOR service provider has its own business entities established in the countries where its employees are hired, so it never outsources its legal employer status to local third party EOR providers.
Working with a direct EOR means that its people are directly tasked with supporting your employees, so when there’s a problem, you can speak immediately with their local, in-house support.
Some of the main benefits of the direct EOR model can be found below:
Global Presence: Gives access to entities in most countries around the world, providing direct, local expertise and support.
Speedy, Consistent Service: Eliminates third-party involvement for quicker, more consistent service delivery and a premium employee experience.
Complete Control: Maintains direct control over workforce management through a single, integrated platform.
Comprehensive Services: Clients benefit from a full range of services, including payroll, benefits, immigration, and mobility support.
Dedicated Support: You'll have a customer care and account management teams to assist you and your employees directly, without going through any intermediaries.
What is the Indirect EOR model?
An indirect EOR service provider does not necessarily have its own legal entity in every country it offers its services in. Instead, it relies on a web of third-party providers and in-country vendors.
This model can sometimes become a challenge in terms of accountability and compliance, especially when a client or international employee encounters issues and needs urgent help.
These are some of the challenges of using an indirect EOR:
Third-Party Dependence: Services and employee experiences may vary from country to country based on the quality of local partners.
Delayed Responses: Queries might take longer to address due to dependence on third-party vendors.
Inconsistent Service: Service quality may differ from one country to another based on the local partner's capability.
What are Payroll Services and how they work
Payroll services handle payroll processing but do not provide comprehensive global employee management services. They lack depth in handling global compliance and labour laws and might revert to third parties in some territories.
Here are some of the challenges of using Payroll Services for Global Workforce Management:
Limited Services: Payroll Service Providers only manage your payroll, leaving you to handle other HR tasks.
No Legal Coverage: Unlike Employer of Record services, these providers do not serve as the legal employer of your international employees.
Lack of Local Expertise: They may not have the necessary local expertise or presence in all the countries where you have employees.
Atlas Direct EOR | Indirect EOR | Payroll Services | |
|---|---|---|---|
Global Presence | Entities in 160+ countries, providing direct local support and expertise. | Dependence on third-party vendors in different countries. | Limited global presence and lack of local expertise. |
Services | Comprehensive HR services: payroll, benefits, vacation/PTO management, business expense management, immigration, and mobility needs. | Services vary based on local partner capabilities. Mainly limited to payroll and basic HR tasks. | Limited to payroll processing. |
Response Time | Fast and consistent responses due to direct control. | Responses may be delayed due to third-party vendor involvement. | Response times can vary, and more complex HR queries may not be addressed. |
Control and Consistency | Direct control over workforce management. Consistent service across all countries. | Inconsistent service due to reliance on different third-party vendors. | Limited control and consistency, as services are confined to payroll processing. |
Employee Experience | Best-in-class employee experience due to direct interaction and understanding of local norms and requirements. | Employee experience can vary based on local partners' service quality. | Limited interaction with employees; employee experience may be impacted. |
Legal Employer | Acts as the legal employer in the country of operation, handling all compliance requirements. | Legal employer status depends on the agreement with third-party vendors. | Does not serve as the legal employer of your international employees. |
Dedicated Support | Assistance of customer care and account management teams | Support depends on the capabilities and availability of local partners. | Support is often not directly available to employees. |
Atlas, a Direct EOR Partner You Can Trust
Your choice of international workforce management impacts more than just operations—it directly shapes employee experience. Atlas’ Direct EOR model excels in this regard, offering a seamless, best-in-class experience across 160+ countries. By eliminating third-party complexities, we ensure swift, consistent service and comprehensive support, from payroll to compliance.
With Atlas, your global team enjoys direct interaction with dedicated account managers, ready to assist them. No endless email support threads, no impersonal bots, no frustrating delays— just personalized assistance ensuring your employees feel valued and supported at every step.
Simplify your expansion and enhance employee satisfaction with Atlas’ proven expertise in global HR management. Elevate your workforce experience today and discover how Atlas can empower your international operations.