Restructuring the Workforce in a New Age of Uncertainty: Why EOR Has Become a Global HR Strategy Post-COVID
A World Yet to Stabilize
In 2025, just as the world seemed to have moved past the COVID-19 pandemic, fresh outbreaks in countries such as the U.S., parts of Europe, and Asia are raising concerns about a new wave of instability. Coupled with prolonged inflation, disrupted supply chains, and mass layoffs from tech giants like Meta and Amazon to startups, global companies are being forced to restructure their HR strategies. In this context, the Employer of Record (EOR) service has emerged as a strategic solution—not only to navigate the crisis but also to build a flexible and sustainable workforce, especially in Southeast Asia.
Post-COVID: A New Perspective on Human Resources
The COVID-19 pandemic has permanently changed how businesses manage their workforce. A 2024 McKinsey report revealed that 60% of global companies have adopted either hybrid or fully remote work models, a trend expected to continue through 2030. Companies are reducing fixed costs by shutting down offices or downsizing branches in non-core markets—such as Twitter (now X), which closed several offices across Asia in 2023 to focus on remote operations. Remote work is no longer a temporary solution, with 48% of the global workforce now preferring hybrid models, according to Gartner (2024). Moreover, amid a global talent shortage—projected to cost the economy $8.5 trillion by 2030 (Korn Ferry)—companies are turning to flexible contracts to attract and retain top talent while meeting personalized needs. A notable example is FinScale, a fintech firm in Singapore, which shifted its entire customer support team to remote work in 2022, cutting office expenses by 40% and increasing employee satisfaction by 30% thanks to flexible work policies.
EOR: From Compliance Solution to Operational Strategy
An Employer of Record (EOR) is a third party that legally employs workers on behalf of a company, handling payroll, taxes, insurance, and local legal compliance. Previously, EOR was mainly used as a temporary solution to enter new markets. However, in today’s uncertain climate, EOR has evolved into a core HR strategy. With EOR, companies can hire employees in a new country within 48–72 hours without setting up a legal entity—41% faster than traditional processes, according to Deel (2024). EOR also handles complex tasks like income tax, social insurance, and employment contracts, reducing legal risks. For instance, in Vietnam, EOR services ensure compliance with the 2019 Labor Code regarding mandatory social and health insurance. More importantly, during new outbreaks or economic volatility, EOR enables rapid workforce adjustments—from onboarding temporary staff to terminating contracts—without legal complications. According to Business Research Insights (2025), the global EOR market was valued at $5.23 billion in 2024 and is projected to reach $9.17 billion by 2033, with a CAGR of 6.8%. In the Asia-Pacific region alone, EOR demand rose 30% in 2024, reflecting the model’s growing popularity amid economic uncertainty.
Why EOR Is Especially Suited for Southeast Asia
Southeast Asia—with its young population, competitive labor costs, and high-quality talent in fields like IT, digital marketing, and customer service—is an ideal destination for global businesses. However, the region's legal and cultural diversity across countries like Vietnam, Thailand, Indonesia, and Singapore presents challenges. EOR stands out as the optimal solution, offering access to affordable yet skilled labor. In Vietnam, for example, the average salary for a software developer is just one-third of that in the U.S., according to TopDev (2024). Each Southeast Asian country has unique labor regulations—Thailand requires 5% social insurance contributions, while Indonesia has complex religious holiday rules. EOR ensures full legal compliance without requiring in-house legal teams. Additionally, fast-growing economies such as Vietnam and Indonesia (with 2024 GDP growth rates of 6.8% and 5.0%, respectively, according to Source of Asia) present opportunities for scalable workforce expansion. One practical example is TechNova, a Canadian tech firm that sought to expand its software development team in Vietnam in 2024. Instead of spending 6–12 months setting up a legal entity, TechNova used Skuad’s EOR service to hire 15 software engineers in just one month—ensuring labor contract compliance, managing social insurance, and offering competitive benefits—saving 45% compared to setting up a subsidiary. Deel (2024) reports that EOR contracts in Southeast Asia rose 35% between 2023 and 2024, with Vietnam and Indonesia leading due to high demand in tech and services.
EOR: A Long-Term Workforce Strategy
The resurgence of COVID-19, combined with inflation and economic instability, is forcing businesses to be more agile than ever. EOR is no longer a stopgap solution for crisis management—it’s now a long-term HR strategy that helps companies build global teams, reduce costs, and ensure legal compliance. Especially in Southeast Asia, where opportunities and challenges coexist, EOR is the key to leveraging abundant talent and adapting to dynamic markets.