The accelerating demand for global workforce solutions has fueled one of the fastest-growing and seemingly endless pools of opportunity in the modern HR services marketplace. A convergence of workforce trends is driving a massive boom in organizations seeking and engaging globally capable solutions like the global employer of record (global EoR) model to support their needs and facilitate strategic ambitions.
Rocket fuel may be the more appropriate metaphor for the growth seen in global EoR adoption; some have pontificated this is more a ‘bubble than a boom,’ but let’s table that topic for another day. There are still oceans of TAM available, and I find in my advisory that often, few firms find themselves competing for the same pipelines (which are packed). There is still more than enough demand and plenty to go around.
The Wild West of HR Services
I have studied, researched, and written about the global EoR model and marketplace since ~2017, including launching the industry’s first market analysis dedicated to the space in early 2020.
In that time, I have advised and worked with many leading and emerging firms. Despite the massive adoption and growth of global EoR services, most CHROs need to be more familiar with and educated on the agility-accelerating service model.
The concept of leveraging a co-employment model globally is still relatively new, as the U.S. domestic PEO model only partially translates outside its borders. Further, the marketing across the space has blurred the lines between global payroll and global EoR, adding to the confusion about this solution.
Many EoR providers opportunistically push a narrative around a “work on the beach” lifestyle. But I have yet to interview a CEO, CHRO, or CFO looking to staff a beach full of talent as a strategic priority. Global EoR firms are not travel agents – they’re designed to be localized compliance experts that facilitate local employment on behalf of their customers, precisely what buyers should prioritize in the vendor selection decision.
I’ve often been asked for my POV on the key threats to this rocket ship ride the global EoR market is experiencing.
The ‘Wild West’ nature remains the biggest threat to this industry and its ecosystem. The market is overcrowded, mildly differentiated, and far too easy to enter. The market is currently in a quantity-over-quality state and desperately needs to mature. While there are vendors in quantity, there isn’t that much quality or, more importantly, that much capability to be found in many solutions, as most operate primarily as aggregators, relying heavily on partners with all roads leading to smaller, often more capable firms on the ground, in-country.
Worse is the potential failure of a global EoR, given the low barriers to entry and opportunistic nature described above. This would leave a huge black eye on the entire league of providers and would likely become how many executives first learn of the service model. Further, is the threat of localities and country governments reacting negatively to the model and overregulating its activities or blocking the usage of the global EoR solution to employ workers locally.
Global Employment Innovation Organization (GEIO)
In 2021, I was privileged to be included in a private meeting of the founders of Globalization Partners, Safeguard Global, and Velocity Global to discuss these exact threats and the challenges of a highly crowded and immature marketplace. The concept of a consortium to oversee and champion the industry and ensure its growth and longevity was born.
Earlier this month, these same providers, along with Papaya Global, announced a collaboration that will facilitate the formation of the Global Employment Innovation Organization (GEIO) – a global employment industry-specific consortium dedicated to bringing desperately needed maturity and structure to the global employment services ecosystem.
The nonprofit consortium aims to mature, elevate, and expand the ecosystem of global employment service providers, supporting them with much-needed structure through standardization, advocacy, education, and research.
The GEIO plans a formal launch in Q1, which will open to the entire global employment community of providers and firms with a vested interest in the broader ecosystem, e.g., law firms, VC/PE firms, consultants and advisors, and more.
The consortium will form and operate under a tiered membership program that includes corresponding levels of board seats and voting rights for members. GEIO is also planning to form subcommittees and specialized cohorts within its member ranks to address key market trends and challenges. Much of its initial membership fees will be focused on market outreach, thought leadership, research, and education.
However, the GEIO is not just about protecting the EoR provider community; more importantly, it aims to protect the industry’s human aspect by enabling opportunity that “transcends borders.” Remote work can offer people worldwide the ability to obtain jobs and compensation they may not have otherwise had access to. It aims to protect that opportunity and the remote worker through a compliant employment facility, creating a ‘win-win-win’ scenario for employers, workers, and government entities.
I have long been a fan and promoter of the global EoR solution. I have studied countless organizations that have found massive value and ROI from the global EoR model in enabling their strategic goals, diversifying skills, fueling their talent strategies, and otherwise creating speed and agility that enables material competitive advantage through compliant global employment.
Remember that the Global EoR market has historically lacked any industry-wide organization, unlike the domestic U.S. PEO market, which is supported by the NAPEO to provide it with resources, structure, and advocacy that has helped facilitate healthy PEO industry growth. The global EoR ecosystem is fundamentally unrepresented as an industry in this way.
I’m excited to see GEIO come to life to protect and champion this industry. It marks a significant step forward for this human potential and organizational agility enabler. It will play a pivotal role in the evolution, healthy growth, and adoption across the global employment marketplace.
It brings order to a chaotic industry that desperately needs it.