Global spend on employer-of-record services is estimated at between $25 billion and $35 billion, according to a report by SIA.

Growth is driven by “an increasingly complex legislative landscape driving concerns about misclassification risk and a growth in the use of talent platforms to directly source and manage workers,” among other factors, the report said.

A more precise estimate of industry growth was not possible due to lack of data.

The report examined 11 employer-of-record firms, which supplied data for analysis. There are more than 100 employer-of-record providers in the world, according to the report.

An employer of record is “an entity that serves as the employer of a worker recruited and hired by an end-user hirer for administrative purposes only while the employee performs work under the direction or control of the end-user hirer,” according to the report. This entity allows companies to legally engage workers in new countries or regions without setting up a legal entity or risking the violation of local laws.

EOR firm services can include onboarding, benefits provision, payroll, time and expense management and other administration services.

Corporate members of SIA can access the full 66-page Employer of Record and IC Evaluation and Compliance Landscape Summary report.