Top 10 HR Trends For 2026 Workplace

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Gino Peters

Written By:

Gino Peters

Reviewed By: Belinda E.

May 17, 2026 2:09 am

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!

A Deep Dive into the Top 10 Trends of 2026

With 2026 coming up fast, HR workers need to keep up with changes at work. Today, we’re going to talk about the 10 most important HR trends that are shaping the future of work. Because of these trends, businesses are changing a lot about how they run and handle their employees. For instance, they hire people based on their skills, give them more freedom, and report on ESG problems. If HR pros follow these trends, the workplace will be happier and more effective. This will help them get and keep the best employees.

1. Employee mental health support in the workplace

Now more than ever, companies all over the world need to care about the mental health of their employees. It is clearer now than ever that people need more help with their mental health, especially since COVID-19. Companies now know that mentally healthy employees are involved, hardworking, and effective. Therefore, companies are setting up a lot of programs to increase the mental health of their employees. Some of these programs are designed to help the employees or to offer training for managers on mental health, and flexible work plans. Companies can make the workplace a healthy, friendly place for everyone by putting the mental health of their employees first.

2. Advantages of skills-based hiring in the modern workplace

Businesses that want to stay competitive in today’s fast-paced business world need to hire people based on their skills. The old ways of hiring people based on standard qualifications and knowledge are no longer sufficient. When companies use skills-based hiring, they can find people who have the right skills for the job, no matter what schooling or work experience they have. Further, it allows companies to find more qualified applicants, increase diversity and inclusion, and make sure that new hires have the skills they will need in their positions.

Including diversity, equity, and inclusion (DEI) factors in hiring processes based on skills has become important for companies that want to create a diverse and welcoming workplace.

3. Best practices for implementing workplace flexibility

Nowadays, it is more common to have flexible working hours. People want more flexibility over their work hours and the chance to work from home. Companies that let workers choose their own hours can not only get and keep the best workers, but they also get more work done and itâs proven that those employees are happier. Therefore, companies that offer flexible work should have clear rules and policies. Furthermore, they should provide the employees with the right technology and tools and promote a culture of trust and responsibility. Letting employees work from home can help them be more flexible also for the future.

4. The impact of ESG reporting on talent acquisition

News about the environment, society, and government (ESG) has grown a lot in the past few years. Businesses must now be open and honest about how they treat people and the world around them. It also says much about their hiring process. As more people look for jobs, the ESG responsibilities of a company are becoming more and more important to them. Using ESG reports as part of the hiring process can help businesses find people who share their values and goals and are driven to do their best. There will be less negative press about the company, and the business plan will be more sustainable and future-wise.

5. The importance of human skills in the evolving workplace

Undoubtedly, people skills are very important in the workplace, even though AI and technology are getting better all the time. No longer are smarts the only thing that sets you apart from others. Employers now want to hire people who have strong interpersonal skills and who have skills like emotional intelligence, creativity, critical thinking, and a good and open communication. You need these skills to get along with others, work well with others, and adapt to new situations. Businesses that focus on skill development can create workers who are ready for the future and can do well in a world that is connecting and becoming more complicated.

6. Redesigning physical office spaces for the future

Changes are also happening in the physical office space. Companies are rethinking the way offices are usually set up and making spaces that encourage teamwork, creativity, and health. Some of the new trends in office design are open floor plans, flexible workstations, and areas set aside for working together. Additionally, businesses are adding natural elements like plants and natural lighting to make the workplace more pleasant and stimulating. By changing the way offices look, companies can make their workers more productive, engaged, and happy.

7. Implementing a blended workforce strategy

Full-time workers, freelancers, agencies, contractors, and gig workers can all be part of a “blended workforce,” which is becoming more popular. Many businesses are starting to understand how useful it is to have a diverse network that can be easily expanded or contracted as needed. Companies can become more flexible, get access to specialized knowledge, and cut costs by using the skills and knowledge of both internal and external employees. It does, however, take careful planning, good communication, and strong project management skills to manage a blended workforce. Further, also cross-functional teamwork is being encouraged by businesses in 2026 through projects involving people from different departments, workshops for teams, and online tools for sharing knowledge. Employers in 2026 will have an advantage over their competitors if they can successfully use a blended workforce strategy.

8. Addressing the HR burnout crisis

Without a doubt, there is a burnout crisis in the HR field. According to a study from Forbes, 98% of HR professionals are suffering or show signs of burnout. They are often in charge of managing complicated tasks, dealing with problems from employees, and making sure that rules are followed. This could cause a lot of stress and burnout. To stop the HR burnout crisis, companies should put the health and happiness of their workers first, give them the tools and help they need, and encourage them to have a good work-life balance. HR professionals should also take care of themselves and look for ways to improve their skills and careers. Companies can make their HR function last and do a good job by addressing the HR burnout crisis.

9. Building up soft skills in the workforce

People skills, which are also called “soft skills,” are becoming more and more important in the workplace. Some of these skills are leadership, problem-solving, communication, and working as a team. Soft skills are necessary to get along with others, work well with others, and get through difficult work environments. Companies that emphasize developing “soft skills” encourage employees to do better teamwork and do a better job. Organizations can improve the soft skills of their employees by offering mentorship programs, training programs, and ways for employees to give and receive feedback such as an annual performance review.

10. Developing leadership skills for the future workplace

To make an organization successful in the year 2026, you need to be a good leader. In the next decades, leaders are needed who can inspire and motivate their teams, deal with uncertainty, and push for new ideas. Spending money on leadership development programs that teach skills like emotional intelligence, strategic thinking, and good communication is a good investment for businesses. Also, businesses should find and train the leaders of the future by mentoring them and planning for their eventual replacements. Organizations can build a strong pipeline of talent and ensure their long-term success by helping people learn how to be leaders.

Conclusion

Nowadays HR professionals have a one-of-a-kind chance to shape the future of work. By following the top 10 HR trends we talked about, companies can make the workplace a good place to work that attracts and keeps good employees. By putting mental health support for employees first and making the workplace more flexible, companies can build a strong and adaptable workforce that is ready to take on the challenges of the future. By following these HR trends, companies can become leaders in their field and make the workplace a place where people are free to think outside the box, work together, and grow.

FAQs

What are the top HR trends for 2026?

The top HR trends for 2026 encompass prioritizing employee well-being, embracing skills-based hiring, enhancing workplace flexibility, integrating ESG reporting into HR strategies, and adapting to the rise of automation in the workforce.

How is employee well-being prioritized in the workplace?

Employee well-being is prioritized through holistic wellness initiatives, flexible work arrangements, and fostering a culture of psychological safety and support, ensuring employees feel valued and supported in both their personal and professional lives.

What is skills-based hiring, and why is it gaining popularity?

Skills-based hiring focuses on assessing candidates based on specific competencies rather than traditional qualifications, ensuring better alignment with organizational needs, fostering diversity, and enabling organizations to meet the evolving demands of the workforce.

How is flexibility evolving in the workplace?

Flexibility in the workplace is evolving through hybrid work models, results-oriented environments, and agile workspaces, empowering employees to manage their schedules and workstyles while promoting collaboration and work-life balance.

Why are corporate academies re-inventing their approaches?

Corporate academies are re-inventing their approaches by offering personalized and continuous learning opportunities to develop future-ready skills, address evolving business needs, and foster a culture of lifelong learning and innovation within organizations.

What is the significance of ESG reporting in HR?

ESG reporting in HR signifies a commitment to sustainability, social responsibility, and ethical governance, influencing talent strategies, performance evaluation, and employer branding, and aligning organizational values with employee expectations and societal demands.

Why are human skills becoming crucial for the future of work?

Human skills such as communication, collaboration, and emotional intelligence are becoming crucial for the future of work, enabling adaptability, innovation, and effective teamwork in an increasingly complex and interconnected business environment.

How is hybrid working shaping the future workplace?

Hybrid working is shaping the future workplace by combining remote and in-office arrangements, leveraging technology for seamless collaboration, promoting work-life balance, and adapting to changing employee preferences and expectations for flexibility and autonomy.

What changes are expected in the physical office environment?

Changes in the physical office environment include agile office design, wellness-centric spaces, and technology integration to support collaboration, creativity, and employee well-being, fostering a dynamic and adaptable workplace culture.

How is HR adapting to the rise of automation in the workforce?

HR is adapting to the rise of automation by leveraging AI-powered solutions for recruitment, training, and data management, while also focusing on upskilling and reskilling initiatives to prepare the workforce for the future and ensure continued relevance and competitiveness in the digital age.