Workforce Trends 2025: Why Flexibility Is Key

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Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

June 3, 2026 7:26 pm

Category Tag: News

The rise of remote work made international expansion much easier in recent years, but hiring abroad still comes with legal and administrative complexity, as every country has its own labour laws and payroll rules that must be followed. In addition, not many companies can open a new entity in every new market that they are expanding into. That is when the Employer of Record (EOR) solution comes in handy.

The EOR serves as the legal employer on paper, while the client company manages important activities related to the employees responsibilities and performance.

In this guide we will cover what an employer of record is, how it works in detail, how much it can cost and which business should consider an EOR solution.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third party service provider that legally employs a person on behalf of another company in the country where the employee officially resides. As an official employer the responsibilities of EOR include issuance of an employment contract, processing payroll and withholding taxes and necessary social security contributions, as well as preparation of offboarding documents or any documentation that need to be signed by the employer. In addition, EOR ensures the compliance with local labour laws and serves as a first point of contact for any legal disputes.

The client company that hired the employee through an EOR also has a list of responsibilities. As an Employer of Record does not have the visibility on operational activities behind the scenes a client company needs to provide direction and ensure proper team integration.

In simple terms, the EOR provider acts as a legal employer in the country of the employee’s residence, while the client company takes on day-to-day manager work.

Responsibility	Employer of Record (EOR)	Client Company
Employment contracts & any other official documentation
Payroll processing
Income tax & social security contributions
Compliance with local labour laws
Statutory benefits administration
Managing daily work and projects
Setting goals and performance expectations
Providing equipment and tools
Leading the employee’s team and workflow

Employer of Record solutions gain more and more popularity in the field of global expansion as they allow businesses to hire best candidates fast and easy while staying compliant with local employment regulations. More information about EOR service are available if you would like to understand more.

EOR Meaning

The term “EOR” is the abbreviation for Employer of Record.

Employer in this instance stands for the company that hires the employee and takes on duties related to it, such as onboarding and offboarding process, payment of wages and compliance with other legal requirements.

“Record” from the EOR perspective refers to official registration with government authorities. The name of the EOR provider is stated in all payslips and tax filings, and should also be listed by the employee in any documents where employer must be stated, such as mortgage or loan applications.

One might ask a question of why this legal structure exists. As it is not possible to provide an employment contract directly to a person that legally resides in another country, the business expanding abroad typically needs to establish a local entity. That involves legal registration, arrangement of local bank accounts and organisation of payroll structure, as well as compliance with local law.

EOR allows to simplify the global hiring and reduce administrative burden through their existing legal entity.

There are some other hiring models that can be confused with EOR.

EOR and PEO

Many sources online refer to EOR as “international PEO”, which may create confusion as these models have 1 important difference.

A Professional Employer Organisation (PEO) serves as a co-employer of a client company. In other words, a business must already have an established entity in the country. The hiring tasks are, therefore, shared between 2 companies, while legal liability stays only with the client company. In the EOR model all legal risks are being taken by the official employer. Read more about the difference between PEO and EOR here.

EOR and staffing agency

Staffing companies mainly provide assistance for short-term projects by providing temporary workers. If the client wishes to employ a person for a longer time, EOR approach must be chosen.

EOR and contractor model

Contractor agreements assume the involvement of independent workers rather than employees. This model is also often used for temporary, project-based assignments. It is important to remember that there is a big misclassification risk between a contractor and an employee in the company which can lead to potential legal issues. An EOR ensures that employment is legally compliant with local labour law.

How does an Employer of Record work?

While it may sound complicated at first, a process behind the employer of record model is relatively straightforward.

The operating company selects a candidate

The client company recruits the employee they want to hire in another country

The EOR becomes the legal employer & local employment contract is issued

The Employer of Record uses its local legal entity to prepare and issue an employment contract that complies with labour law of the country where the employee is based. Depending on case-by- case situation, the work visa might need to be secured beforehand. Our company provides immigration services, more details can be found here.

Payroll and taxes are managed

The EOR takes on recurring responsibilities related to a payroll and ensures correct processing of income tax, social security contributions etc

Benefits are administered

Paid leave, sick leave, pension contributions and any other statutory benefits are being managed by the EOR.

Ongoing compliance and HR support

It is the responsibility of the EOR to monitor changes in local labour law and ensure ongoing compliance.

Example:

Imagine a UK-based tech company found a perfect candidate in Germany for a position of a software developer.

Instead of going through the administrative burden of opening a legal entity in Germany, the company chooses to work with an Employer of Record. The EOR hires the developer under a German employment contract and manages payroll and taxes. At the same time the UK company welcomes the new employee in the team and manages the daily work of a developer.

What services does an Employer of Record provide?

The Employer of Record does more than just providing an employment contract to the employee. Typically a wide range of HR and compliance services is included in the EOR offer. For example, read about the services included in our EOR package here.

Employment and HR administration

Locally compliant employment contracts and support with other documents requested by authorities
Employee onboarding
Employee record management. For example, control over PTO

Payroll and tax management

Regular payroll processing
Tax withholding and reporting of social security contributions with authorities
Payslip generation and creation of annual wage tax certificates

Benefits administration

Management of statutory benefits
Pension contributions (where required)
Support with benefits such as maternity leave allowance, sick leave allowance etc

Compliance and risk management

Insuring compliance with local labour law
Management of onboarding and offboarding processes
Representation in difficult legal and court cases

Additional services:

Some EOR providers ( such as ThisWorks EOR Services) provide additional services such as:

Work permit and dependent visa support
Background checks
Relocation support
Value added services: support with housing, company car, banking, etc ( depending on the country).

This vast list of services allows businesses to manage international teams, while staying compliant and avoiding complex local employment administration.

Benefits of using an EOR service

There are multiple advantages the businesses can get from working with an Employer of Record provider.

Faster global hiring

Setting up a new entity can take up to several months. With an EOR the hiring process can take several days.

Reduced compliance risk

A trustworthy EOR provider ensures the compliance with all local regulations. As the labour law varies greatly between countries, having a knowledgeable party to rely on can make a big difference.

Lower expansion costs

Establishment of a new entity is not only a time-consuming process, but also costly. With EOR services these costs can be avoided.

Access to global talent

The location of a remote candidate is not a problem if the company uses Employer of Record services. In other words, the best candidate for specific business purposes can be chosen.

Scalable hiring model

EOR services are ideal for organisations that want to scale international hiring quickly. They are particularly useful in the following situations:

Remote-first teams and organisations
Companies testing new markets abroad
Startups expanding internationally

How to choose the right Employer of Record

Choosing between several EOR providers is important, as it influences not only compliance, but also employee experience for new hires and how your company is perceived on the job market.

Here are some important things to keep in mind when deciding on your EOR partner:

Geographic coverage

Make sure that EOR provider can cover the country where you want to expand globally. Read about our EOR coverage here.

Pricing transparency

Check that EOR provider does not have any hidden costs and the pricing is clearly outlined in your MSA.

Compliance expertise

A strong EOR provider should have a team of experienced local HR specialists who understands all in and outs of a national labour law.

In-house vs partner model

Some EOR providers rely on their third-party partners, while others manage employment directly through their own local entities.

Customer support

It is important to find a EOR partner that helps with any questions or concerns in a quick and professional manner. That can be crucial when dealing with employee offboarding or any legal disputes.

Warning signs

Understanding the importance of choosing a right party, your company should be cautious of providers that lack local expertise and cannot give clear answers to your labour law questions. In addition, companies with slow response times can prove to be unreliable in critical situations. Furthermore, providers with complex pricing models with many hidden fees can create a lack of cost transparency and result in unforeseen expenses.

By selecting a provider with strong expertise in local labour law and reliable support from dedicated teams, your company can ensure a smooth international growth. Learn why companies choose ThisWorks as their EOR partner.

How much does an employer of record cost

The vast coverage of services the employer of record provides makes many businesses ask how much an EOR costs.

Pricing models vary greatly on the provider and the country of coverage, but most EORs use one or more of the following structures.

Flat monthly fee per employee.

The EOR provider charges a fixed monthly fee for each employee they have on the payroll from the client.

Percentage of salary

While not being a popular approach, some EOR providers charge a percentage of the employee’s salary, typically ranging between 5%-15%.

Setup fees

Some providers charge onboarding or offboarding fee for each employee.

The fee that the business needs to pay to an EOR provider also depend on the location of a service. Local labour law complexity of some countries can influence the fee. In addition, some countries have specific statutory benefits and payroll administration requirements. Furthermore, employee headcount in the specific location can influence the fee.

EOR vs setting up a legal entity

To establish a new entity the organisations needs to go through legal and tax registration. In addition, accounting support and ongoing compliance costs such as the fees for local labour lawyers can make setting up a legal entity significantly more expensive.

An EOR allows companies to expand globally without these upfront investments.

EOR vs hiring contractors

Some businesses decide to hire international workers as contractors. However, this approach can often lead to a misclassification risk, which can cause legal and tax liabilities.

A professional EOR provider ensures that the new starters are compliantly onboarded under local employment regulations.

EOR FAQs

Is an EOR the same as a PEO?

No. PEO model assumes co-employment and requires the business to already have established local entity, while EOR employs new talents through its own entity only.

Can an EOR hire contractors?

While some EOR providers can support hiring contractors, it is important to remember that main function of EOR is the employment of full-time workers legally in a country. A risk of misclassification between EOR and contractor should be also considered carefully.

Is an employer of record legal?

Yes, when established and structured properly, Employer of Record entities are legal and widely used for international expansion by many companies.

When should you use an EOR?

The most common reason for using EOR include:

Hiring employees located in another countries remotely
Testing new markets before establishing an entity
Expanding internationally

Can you switch from EOR to your own entity?

Yes. Many companies initially hire through an EOR for the ease and speed of expansion and later transition employees to own legal entities upon their establishment. It is important to remember that some countries require specific procedure to be followed in such a scenario.

Get in touch with ThisWorks

Expanding your team globally does not need to be long and administratively complex.

With the use of Employer of Record the businesses can have access to the best talent from around the world while ensuring full compliance with local labour laws.

ThisWorks can support your global expansion with our compliant Employer of Record services.

Contact our team to find our how we can help your international team glow fast and compliantly!

2025 Workplace Trends: Empathy & Flexibility Shaping The Future

The work environment is undergoing rapid transformation through two key trends: empathy and flexibility. The contemporary business world of 2025 demonstrates these traits in increasing numbers because businesses have fundamentally changed their operational and success methods. The Future of Workplace Flexibility is not just about remote work; it’s about creating adaptable policies prioritizing employee wellbeing, productivity, and inclusivity.

As organizations adapt to these shifts, the emphasis on the Future of Workplace Flexibility and the impact of workplace empathy becomes crucial. These trends constitute a fundamental business evolution and a strategic requirement for success in today’s competitive global marketplace. Organizations that successfully implement these aspects create new achievement standards by establishing workplaces that engage and satisfy their employees while maximizing their productivity.

The rise of empathy in workplace culture

To develop empathy, one requires a deeper understanding than traditional acts of kindness provide. Managers should actively embrace empathy to effectively understand team members’ emotions when building work environments that value each person. Managers need interpersonal understanding to execute better decision-making processes.

Implementation in companies

More organizations currently understand empathy’s vital role in leadership positions. Training programs focused on emotional intelligence are becoming more common, helping leaders integrate the impact of workplace empathy into every aspect of their management style. The cultural shift goes beyond improving workplace ambience by substantially affecting organizational performance and workforce contentment.

Benefits of empathetic leadership

The understanding and appreciation employees receive lead to increased dedication toward the company. Employees demonstrate better dedication to their work while enhancing their commitment to company objectives.

Improved productivity results from workplaces promoting empathy because they experience reduced work stress and conflict. The supportive workplace environment helps employees concentrate better on their work while producing elevated quality results that improve productivity and decrease employee burnout.

Future of workplace flexibility

The workplace environment is undergoing rapid transformation as employees increasingly adopt flexible work arrangements such as remote work and hybrid schedules. The fast work transformation results from evolving employee needs and business requirements to adjust to modern times. Today’s workforce demands superior personal life equilibrium more than ever. As of 2025, studies indicate that many businesses have embraced these flexible working models. About 74% of companies now operate under a hybrid work model, reflecting a broad adoption across various industries. Remote Work Trends for 2025 show a growing shift toward hybrid models and flexible schedules.

Tools and technologies

Technology is driving Remote Work Trends for 2025, making virtual collaboration easier. To support Remote Work Trends for 2025, UK companies are leveraging various digital tools. The combination of Microsoft Teams and Slack alongside secure cloud services serves as core tools for enabling effective communication while sustaining team cohesion across all physical locations.

Technological advancements have become the foundation of the evolving flexible work paradigm. Such technologies enable workforce mobility across locations and enhance project management efficiency by maintaining team connection while preventing workflow interruptions. Technological innovations have transformed flexibility into a permanent workplace solution.

The link between workplace policies and employee wellbeing

As workplaces evolve, employee wellbeing in modern workplaces has become a critical priority. Organizations recognize that productivity and long-term success depend on workplace policies for mental health that actively support employees’ psychological and emotional needs.

Organizations establishing formal mental health policies achieve better employee satisfaction, reduced absenteeism, and higher staff retention. A Deloitte study from 2023 reveals UK employers spend around £56 billion yearly because of poor mental health, thus demonstrating the necessity for extensive workplace wellbeing programs.

How mental health policies are shaping employee wellbeing in modern workplaces

The organizations which make mental health and wellbeing their strategic focus will lead the market through their modern operational policies in 2025. These include:

Flexible work arrangements that enable employees to do their work from home or through hybrid office schedules help reduce their commuting-related stress and rigid workplace constraints.
Companies now give their staff mental health leave as a dedicated benefit to remove the stigma around rest.
Through Employee Assistance Programs (EAPs), organizations provide confidential counselling along with mental health resources so their workers can manage workplace stress.
Employers give employees monetary allowances to join gyms and use mindfulness apps and therapy sessions for mental health benefits.

Companies implementing workplace policies

Leading businesses are now taking the front position to support mental health policies across their organizations.

Lloyds Banking Group established a comprehensive mental health strategy through which employees receive unlimited mental health support, counselling, and wellness materials 24 hours a day. Managers in the company receive specified training to detect burnout and additional signs of stress.

Employees at Unilever receive a comprehensive wellness program through which they can select flexible working arrangements and participate in mental health first aid training and scheduled mindfulness programs.

PwC launched “Be Well Work Well,” which teaches staff members how to establish professional boundaries, use mental health services, and prioritize work and personal time.

The future of work is not just about productivity—it’s about people. Companies that integrate mental health policies with flexible work models will foster a resilient, motivated, and mentally healthy workforce in 2025 and beyond.

Strategies to reduce burnout in the evolving work environment

The modern workplace faces an increasing burnout challenge because remote and hybrid work arrangements have become more prevalent. Flexibility benefits work environments, but its implementation creates boundaries between work and personal life, resulting in longer workday hours, digital information overload and elevated stress levels. Organizations must implement strategies to reduce burnout and maintain a healthy and productive workforce while ensuring employees experience the benefits of flexible work arrangements rather than suffer from downsides.

Multiple studies show that remote employees work 2-3 additional hours daily when there are no established office hours for them to refer to. Statistical research indicates remote working leads employees to extend their workday by 2-3 hours above traditional office settings.

People experience excessive stress because they depend too much on digital communication through emails, video calls, and messaging apps, which causes continual disruption and diminished downtime. Workers must answer immediately, which leads to their exhaustion.

When professional boundaries blend with personal life, employees struggle to disconnect, which causes their mental fatigue to worsen.

Boundaries, workload management, and leadership support

Businesses that wish to fight burnout need to create official policies supporting employee boundaries and workload balance while providing senior-level support systems. The most effective approaches to combat burnout consist of the following:

Companies need to create specific working time frames through “right to disconnect” policies, which promote employee disconnect after their designated work hours. Some businesses operating in the United Kingdom implement specific email curfews to stop employees from working outside their scheduled hours.

Regular breaks during workdays through the Pomodoro method, where workers focus intensely for set intervals and then rest briefly, enhance productivity and decrease stress levels.

Organizations today use asynchronous communication to let staff respond at their convenience instead of requiring attendance at every virtual meeting.
Business leaders need proper training to detect burnout symptoms, distribute equitable workloads, and offer mental health support to their team members.

For flexibility to be truly beneficial, however, it must come with structured policies that support work-life balance rather than increase the risk of overwork. Organizations that adopt proactive burnout prevention strategies will create healthier, happier, and more resilient workplaces in 2025 and beyond.

Creating an inclusive and adaptive workplace culture

Understanding how to improve workplace culture is essential for companies aiming to foster collaboration, innovation, and employee satisfaction in an evolving work environment. Companies across the United Kingdom understand that workplace success depends on embracing diversity while providing inclusive work environments and adaptable policies. An influential company culture now goes beyond perks because it boosts morale for all teammates regardless of their personal characteristics or work flexibility. Organizations prioritizing fostering an inclusive work environment and improving workplace culture will be better positioned to attract and retain top talent in 2025 and beyond.

The importance of diversity and inclusion

A truly inclusive work environment must align with the future of workplace flexibility, ensuring all employees have equal opportunities to succeed regardless of location or background. It demands that systems incorporate inclusivity from the beginning. Remote and hybrid work models provide employees self-governance but can produce unintentional discrimination unless organizations establish appropriate monitoring systems. Some challenges include:

Remote workers face difficulties in their professional advancement since they miss out on vital networking chances, fail to advance in their careers, and end up disadvantaged compared to their office-based colleagues.

Managers develop negative biases toward remote workers when their work output becomes less transparent, creating inaccurate perceptions of their work engagement.

Staff members who face disabilities and employees who lack dependable home office facilities encounter obstacles when working under the remote-first framework.

Work flexibility procedures across organizations now provide identical opportunities to all staff members anywhere throughout the country.

Leadership and HR policies for a better workplace

HR policies play a vital role in how to improve workplace culture. A genuinely inclusive and adaptive workplace culture starts with leadership. Managers and HR teams play a crucial role in shaping policies that prioritize:

Leadership through empathy involves active employee listening and maintaining transparent communication lines.
Flexible and transparent policies – Ensuring clear remote work expectations, career growth, and mental health support guidelines.
To maintain employee connections, the organization should provide regular feedback sessions, direct one-on-one check-ins, and virtual town hall discussions.
Diversity and inclusion training – Educating leaders and teams on unconscious bias, cultural competency, and inclusive communication.

Conclusion

Success in modern workplaces depends on flexibility and empathy as key elements. Organizations focusing on mental health, inclusive workplace cultures, and established policies will achieve better productivity, reduced employee burnout, and enhanced staff engagement.

Real organizational change surpasses hybrid work strategies because it needs empathetic executives who lead by example and proactive support systems. Organizations following these principles will establish motivated, resilient teams that succeed in future working environments.

FAQ

How can a company start integrating empathy into its culture?

Organizations should start by providing instruction on empathy, which teaches leaders and staff about emotional intelligence and active listening. Workplace cultural integration of empathy values can be achieved through regular team exercises focusing on developing empathy skills.

What strategies help maintain productivity with flexible work arrangements?

To ensure productivity with flexible work arrangements, companies should utilize project management tools and establish clear communication protocols. Setting measurable goals and offering training on time management can also help.

What are the benefits of fostering an empathetic and flexible workplace?

A flexible workplace culture supported by empathy between employees leads to better engagement rates, reduced staff turnover, and increased job satisfaction. Such work environments experience superior team collaboration and innovative outcomes because their staff members feel supported and valued for their best performance.

How can leaders demonstrate empathy and flexibility daily?

Active team member listening enables leaders to show care and adapt workplace rules according to staff requirements. The organization’s approach will include adaptable work hours, remote work options, and mental health support.et.