The Growing UK Tech Sector and the Need for Global Talent
The UK’s technology sector has experienced remarkable growth, reaching a combined market valuation of $1.1 trillion in the first quarter of 2024. This expansion has led to a significant increase in employment, with net tech employment reaching approximately 2.13 million workers in 2023, accounting for about 6.4% of the overall UK workforce. The UK’s technology job market has faced notable challenges recently. In the second quarter of 2024, the British technology industry experienced a 13% decline in new job postings compared to the previous quarter, with computer and mathematical occupations accounting for 22% of these postings—a 23% decrease over the prior quarter.
To address these skill gaps, many UK companies are hiring internationally. While global hiring presents opportunities, it also brings legal, financial, and operational challenges. This article explores traditional hiring methods, the role of Employer of Record (EOR) providers, and how UK tech companies use EOR services to simplify international hiring and remain competitive.
Challenges in Hiring Developers in the UK
Expanding a talent search beyond the UK creates new opportunities but also introduces challenges.
Legal and compliance barriers
Employment laws differ from country to country. A contract that complies with UK regulations may not align with laws in Europe, North America, or Asia. Companies must ensure employment agreements meet local labor laws, tax policies, and benefits requirements. Failing to comply can lead to fines, legal disputes, and reputational risks.
Payroll complexities and tax regulations
Paying international employees is more complicated than handling UK-based payroll. Each country has different tax systems, social security contributions, and reporting rules. Setting up a compliant payroll system often requires legal expertise and adds operational costs.
Visa and work permit restrictions
Hiring globally does not always mean employees can work from anywhere. Many countries require work visas or permits, which can be difficult to obtain depending on nationality and employer status. Securing the necessary documentation can be time-consuming.
Managing remote teams effectively
A distributed workforce requires strong remote work policies and effective communication tools. Time zone differences, cultural expectations, and collaboration challenges can impact productivity. Companies need structured onboarding, clear performance metrics, and technology that supports smooth teamwork.
Traditional Global Tech Hiring Methods
Traditional hiring involves recruiting employees directly through job postings, interviews, and onboarding. This approach gives businesses full control over hiring, employment terms, and workplace culture. However, expanding across borders increases complexity.
Companies hiring internationally must navigate different labor laws, tax systems, and compliance requirements. Setting up payroll systems in multiple countries, ensuring contracts meet legal standards, and managing local benefits require significant resources.
Traditional hiring also limits flexibility when scaling globally. Businesses must handle visa sponsorships, relocation assistance, and remote work policies while complying with various employment laws. These challenges can slow expansion and increase costs.
For companies with strong HR capabilities, traditional hiring remains an option. However, many businesses are now turning to Employer of Record (EOR) services to simplify global hiring and reduce administrative burdens.
Employer of Record (EOR): A Modern Approach to Global Tech Hiring
Tech hiring involves navigating employment laws, tax regulations, and payroll systems. An Employer of Record simplifies this process by acting as the legal employer on behalf of a company. This allows businesses to hire international talent without establishing foreign entities or handling compliance issues directly.
An EOR manages employment contracts, payroll, benefits administration, and local labor law compliance. The company retains full control over the employee’s work while outsourcing the legal and administrative aspects of employment. This approach is especially useful for UK tech companies looking to scale globally without the risks of traditional hiring methods.
Overview of Popular EOR Providers in the UK
As UK tech companies expand internationally, choosing the right EOR provider can determine how smoothly they onboard and manage global talent. Providers like Multiplier, Remote, Globalization Partners, Oyster, etc. offer distinct solutions for payroll, tax compliance, and legal adherence.
Multiplier
Multiplier is a global employment platform designed to simplify international hiring across 150+ countries. It enables businesses to onboard talent compliantly without setting up local entities, offering automated payroll, benefits administration, and tax compliance solutions. Companies seeking a seamless expansion strategy often turn to Multiplier for its intuitive platform, real-time cost transparency, and localized contract management. A Multiplier review explores how its technology-driven approach minimizes administrative burdens while ensuring adherence to complex labor laws worldwide.
Remote
Remote is a trusted EOR provider that simplifies global hiring by handling payroll, benefits, and compliance across multiple countries. Businesses expanding into new markets leverage Remote’s expertise to ensure seamless employee onboarding, tax compliance, and localized contract management. Its platform offers automation, cost transparency, and compliance safeguards, making it a preferred choice for managing distributed teams. A Remote review highlights how its all-in-one solution streamlines workforce management while mitigating legal complexities.
Globalization Partners
Globalization Partners is a well-established EOR provider recognized for its fully AI-driven platform and global entity infrastructure, enabling businesses to hire in over 180 countries without setting up local subsidiaries. It differentiates itself with built-in compliance automation, real-time cost forecasting, and localized HR support, ensuring seamless employee onboarding and management. Companies benefit from its comprehensive tax handling, benefits administration, and risk mitigation, making global expansion more efficient and legally secure. A Globalization Partners review explores how its technology-first approach streamlines international hiring while maintaining full compliance with complex labor laws.
Oyster
Oyster is a remote-first EOR provider tailored for distributed teams and fast-growing companies, offering payroll, tax compliance, and benefits management across 180+ countries. It stands out with its equity and stock option support for international hires, localized salary insights, and contractor conversion tools, making it a preferred choice for startups and tech firms scaling globally. Oyster also prioritizes social impact hiring with initiatives that promote fair pay and equitable global employment. An Oyster review explores how its intuitive platform and compliance expertise help businesses expand seamlessly while supporting a diverse, international workforce.
How UK Tech Companies Are Leveraging EOR for Global Expansion
Many UK tech companies have successfully used EOR providers to solve hiring challenges in specific markets. Below are real-world examples of how businesses have streamlined operations, expanded teams, and ensured compliance by partnering with EOR providers.
Expanding without legal hurdles
Setting up a legal entity in a new country is time-consuming and expensive. For instance, Hightekers, a UK-based tech firm, partnered with Rivermate to employ remote workers across Europe without setting up local entities. This allowed them to expand efficiently while complying with labor laws.
Hiring remote talent faster
Speed is essential in the competitive tech industry. Quickly onboarding employees across different countries requires efficient hiring processes and compliance with local labor laws. For example, Embeddable chose Oyster as their global employment partner in March 2022 after experiencing multiple options. They were particularly impressed with Oyster’s fast and seamless onboarding of new hires, which significantly improved their hiring efficiency. This partnership allowed Embeddable to streamline their global recruitment process.
Cost saving
Comnexa, a Salesforce consulting firm seeking to reduce costs, switched EOR providers in just five days. They found the cost of hiring talent in the UK to be high, and by choosing a more efficient EOR provider Bondless, they could lower these expenses significantly. The streamlined transition to a new provider helped Comnexa maintain a more cost-effective hiring process while ensuring compliance.
Final Thoughts: Is EOR the Right Choice for UK Tech Companies?
With a growing tech talent shortage, UK companies use Employer of Record services to hire globally without dealing with legal and payroll challenges. EORs provide a fast, compliant, and cost-effective way to scale teams across multiple countries. Businesses expanding rapidly or hiring in various locations benefit from EOR flexibility and risk reduction. However, companies planning long-term operations in a specific country may eventually need to set up a local entity. The right choice depends on budget, growth plans, and compliance needs. For many UK tech firms, EOR services are a valuable tool for global expansion and staying competitive.
