You’ve understood the basics of EOR services, and in this section, we’ll go deeper with types, scope, ideal use cases, selection criteria, costs, and global coverage.

Types of EOR Providers

EOR providers differ in how they operate, their global reach, and the services they offer. If you understand these types, then you can easily choose the right partner:

Traditional Service-Focused EORs

These providers operate human-led teams and local legal entities.

They handle payroll, contracts, taxes, and compliance through personalized service, not a software interface.

This model is best for companies that want full legal support without tech dependency and prefer more customized, consultation-based service rather than automated solutions.

Examples: FMC Group, Pleb. 

Hybrid EOR Providers

Combine personal service with a simple dashboard or portal to track employees and payroll.

Useful for companies that want more automation but still rely on human expertise for compliance.

Examples: Deel, Remote.

Traditional EORs Vs. Hybrid EORs

Remember that when an EOR service provider is primarily a platform, they are less experienced in providing people-first service for manual issues. They push their customers to use their platform. This is not bad in many cases, but the preferable EOR service should be a people-first team.

Scope of EOR Services

So far, you have learned about EOR services.

But what is included in an EOR service?

The following scope defines what the EOR legally handles:

1. Employment Contracts & Legal Compliance
2. Payroll and Tax Administration
3. Employee Benefits Management
4. Onboarding and Offboarding
5. Compliance & Risk Mitigation
6. Global Coverage & Multi-Country Support
7. HR and Administrative Support 

In short, the EOR handles all legal, compliance, payroll, and benefits obligations.

Ideal Use Cases for EOR

EOR services are best suited for companies that want to hire internationally without establishing a local legal entity. Key scenarios include:

• Market Testing & Expansion
• Single or Small Team Hiring Abroad
• Temporary or Project-Based Teams
• Remote-First or Distributed Teams
• Regulatory or Compliance Complexity

Businesses Unsuitable for EOR Services

While EORs offer flexibility, some businesses are not ideal candidates:

• Large Permanent Teams in a Single Country
• Highly Regulated Industries
• Blue-Collar or High-Volume Hiring
• Businesses Planning Long-Term Entity Ownership
• Full Customization Needs

EOR Selection Criteria

When choosing an EOR, evaluate based on service quality, compliance, and fit with your business needs:

1. Local Expertise
2. Global Coverage
3. Compliance Track Record
4. Technology & Reporting
5. Pricing Transparency
6. Scalability

Common EOR Mistakes Companies Make

Here are some common mistakes that you need to avoid when considering EOR service:

1. Assuming EOR is a Free Pass: EOR handles compliance, but the company is still responsible for employee performance.
2. Ignoring Onboarding Timelines: Not factoring in local document verification, work permits, or benefits setup.
3. Overlooking Costs at Scale: EOR fees may be higher than entity setup for large teams.
4. Not Checking Local Limitations: Some EORs cannot handle certain industries, roles, or unions.
5. Lack of Exit Planning: Not planning how to transition from EOR to a local entity if needed.

Questions to Ask Before Signing an EOR Contract

• Do you have a legal entity in the country, or work through partners?
• How do you handle termination and severance?
• What benefits are mandatory and optional, and how are they managed?
• How long does employee onboarding usually take?
• Are there hidden fees for currency conversion, insurance, or tax filings?
• Who manages compliance audits or government inquiries?
• Can we scale quickly to multiple employees or countries under this agreement?
• Whom should I contact if I have a question, my human counterpart or the ticket system?

Note: If an EOR has its own local entity registered in the country or works with local partners, both options are reliable. The key point is to confirm their access and presence in the local market of that country.

Red Flags in EOR Providers

You should avoid starting work with an EOR service provider if it has the following signs:

1. Lack of Transparency
2. Slow Response Times
3. Limited Coverage
4. Overly Aggressive Marketing
5. Poor References or Reviews

EOR Service Pricing

Pricing varies by provider, country, and service level. Understanding cost components helps companies budget realistically.

Percentage of Salary: 10–20% of the employee’s gross monthly salary. Common for full-service EORs.

Fixed Monthly Fee: $300–$1,500 per employee per month, depending on country and benefits.

Setup Fees: One-time onboarding charges, often $300–$1,000 per employee.

EOR Global Coverage

EORs differ in geographic reach, which is critical for international hiring.

1. Global Multi-Country EORs

These companies operate in 50 to 150+ countries. They either have their own registered local entities or use trusted partners.

2. Regional or Country-Specific EORs

These companies focus on a single country or region, e.g., Middle East, Asia Pacific. They offer deep local compliance and are good for scaling companies to a specific region.