Rethinking Staffing Agency-Led EORs

by Gunther Doran

The Employer of Record (EOR) model has grown increasingly popular as organizations expand globally and seek flexible workforce solutions. As a result, staffing suppliers have been rushing into the EOR space without the infrastructure, expertise, or commitment to candidates needed to deliver quality experience. This can have a major domino effect, one that leaves candidates frustrated, organizations exposed to reputational damage, and the entire EOR model under scrutiny.

EOR in Name Only

Many staffing suppliers have rebranded themselves as EOR providers, but they’re applying old staffing playbooks to new employment models. The consequences are significant:

For Candidates:

Delayed or incorrect payroll processing
Poor onboarding experience
Inadequate benefits like healthcare, 401k, and PTO
Inferior communication and support
Confusion about employment status and rights
Lack of transparency in deductions and fees

For Organizations:

Damaged employer brand when candidates share negative experiences
Compliance risks from improper employment practices
Loss of top talent who refuse to work through problematic processes
Increased costs from turnover and re-recruitment due to lack of competitive benefits
Legal exposure

The harsh reality is that being an effective EOR requires more than just processing payroll. It demands robust HR infrastructure, local legal expertise, benefits management, tax compliance, and most importantly, a candidate-centric approach where talent is advocated for in meaningful ways.

Why Traditional Staffing Suppliers Struggle with EOR

The traditional staffing model is fundamentally different from true employer of record services. Staffing partners traditionally focus on filling positions quickly, aiming for rapid placement of specific roles. In contrast, EORs manage an ongoing employment relationship, often spanning years and even decades. While staffing assignments tend to be short-term and project-based, EOR relationships cultivate long-term employment, including handling benefits, compliance, and particular attention to the overall employee experience. Additionally, staffing firms generally operate within single markets, whereas EOR providers must navigate multiple jurisdictions, requiring expertise in diverse regulations and cultural nuances across borders.

When staffing suppliers attempt EOR without retooling their operations, candidates become caught in bureaucratic nightmares, and the hiring organizations bear the reputational consequences.

The Ripple Effect

Every negative candidate experience with your EOR provider becomes a story associated with your brand. Consider:

Glassdoor reviews: mentioning payment issues or poor support

LinkedIn posts: warning others about working with your company

Lost referrals: from candidates who won’t recommend your organization or become future brand ambassadors

Reduced offer acceptance rates: when candidates research your EOR provider

Higher contractor turnover: when workers experience ongoing payroll and benefits support

Your organization didn’t necessarily create these problems, but you own them in the eyes of your contract talent.

Hidden Compliance Landmines

Part-time EOR providers who treat employment services as a side business create significant legal and financial exposure that many organizations don’t discover until it’s too late. Employment law is complex and varies dramatically across jurisdictions. From mandatory benefits and termination procedures to tax withholding and data privacy requirements, staffing suppliers dabbling in EOR often lack dedicated legal teams monitoring regulatory changes in each country they operate, leading to misclassification of workers, improper payroll tax handling, and violations of local labor codes.

The consequences are severe: back taxes with penalties and interest, employment tribunal claims, government audits, and potential joint employer liability that can land directly on your organization.

In countries like Germany, France, and Brazil, employment law violations can result in personal liability for company directors. Even seemingly minor infractions like miscalculating overtime in California or failing to provide mandatory profit-sharing in Mexico can trigger investigations that reveal systemic non-compliance.

How myBasePay is Reimagining the EOR Experience

Our organization was built from the ground up with a different philosophy: the candidate experience is the client experience.

Our clients embrace transparency, leverage cutting-edge technology, and prioritize human-centered support, which can transform your organization. By providing clear communication about compensation, offering real-time access to employment documents, and eliminating hidden fees, you build trust with your workforce.

A modern platform with automated payroll, self-service portals, and mobile access ensures efficiency and satisfaction. Add in our dedicated, culturally competent client and worker support teams and uncompromising compliance with local regulations, we mitigate risks while fostering a positive work environment. Additionally, offering tailored benefits like healthcare, retirement plans, and paid time off, all backed by ongoing market benchmarking, we help you attract and retain top talent.

We invest in transparency, technology, and support to build a motivated, compliant, and engaged workforce producing quality hires, better retention, and a stronger brand for your organization. For those looking to expand internationally, it also means a partner that can scale globally. Most importantly, we invest heavily in local legal expertise, compliance infrastructure, and regular audits precisely because the risk is existential.

Questions to Ask Your EOR Provider

If you’re currently working with an EOR or evaluating options, here are some questions to ask:

How do you measure candidate satisfaction, and what are your scores?
What is your average payroll error rate and resolution time?
What are the benefits provided to workers, including 401k?
Do you offer medical coverage from day one of assignment?
How many dedicated support staff do you have per country/region?
Can you provide references from candidates (not just hiring leaders)?
What technology do candidates use to manage their employment?
How do you stay current with local labor law changes?
What is your escalation process?
Do you have in-house legal counsel with expertise in each jurisdiction where you operate, and how often do they conduct compliance audits?

Can you provide proof of compliance insurance (E&O, employment practices liability) and indemnification clauses that protect us from any compliance failures?

A New Standard for EOR

The staffing industry’s rush into EOR has created a wake of damaged reputations and frustrated talent. Organizations have the power to demand better through candidate feedback, building EOR requirements into RFPs, monitoring EOR performance through regular check-ins, and changing providers when quality doesn’t meet organizational standards. As organizations compete for global talent in an increasingly tight market, the quality of your EOR partner becomes a critical differentiator.

Learn how myBasePay is setting a new standard for global employment services that candidates love, and organizations trust.