Transcript
Charlie McGinn: Yeah, okay. Well, hopefully it's relevant then, you know. So so I would say I mean y you know and essentially yes, but but there's a a different element to it, right? Because both of them are deeply ingrained in compliance, right? That's why you engage into an EOR or to a a PEO, it's 'cause you wanna ensure you're operating compliantly. 'Cause yes the benefits, the cost, the feature benefit there is huge, but ensure y a lot of these might be processing their own payroll in house on spreadsheets, whatever it might be. So ensuring all those elements are in place, you know, your various workers' comp, what's required by state, so on and so forth. So so they're definitely from the benefit side, but also from the compliance side. The exact same on the EOR, but EOR is evolving today, and I'll I'll kind of explain to that a bit more. But the way EOR started out, like what you were solving for was always compliance, but the easiest sense that I say was the fear of the unknown. Right, to your point exactly, like, hey, like in Germany, there's great engineers and I've got a project or going over there or I wanna expand, or even I just need coverage in and I'm struggling to find talent in my little world. Historically before EOR, how do you do it? Well, you gotta go register a company in Germany. We gotta go over to Germany, you gotta speak German. You're dealing with everything that applies to that local market. So EOR opens it up for you, but with confidence because of that. Fear of the unknown, you know, we're providing a compliant employment solution. So it turns from a payroll standpoint for the client to an invoice. They fund an invoice with the f with the comfort knowing that everything's being paid out. Where it's starting to shift, I will say, is as staff leasing and EOR start coming closer together. And by staff leasing, you know, you've had temp staffing for a long time. Right. That people want to engage people under a contingent nature, because of whether it's fixed term, project based, whatever it might be, but they have an entity. And again, look at the US. How many companies that are US based that still use temp staffing agencies because a it's access to talent, it's getting them on quickly, it's making sure, you know, from a product of a customer, whatever project standpoint, we stay on task without the hey, I've gotta do them full my full onboarding, I gotta expand them all all over, so on and so forth.
Charlie McGinn: So you're seeing those starting to come together, which means EOR now is starting to become a lot more prevalent here in the US because you got Europe expanding over and the vi the inverse, but you have companies that are used to an EOR that want something similar in the US but want that talent layered in, so on and so forth. So it's it's a bit of a merging animal and you're seeing it with the evolution of AI. Like what is the support behind AI in order to keep evolving? Well it's building up data centers, it's a specialized technicians, it's You know, things like that. So and then you get into your larger companies. Like they they have a massive budget for contingent workforce. And sometimes they don't care where it is, but again, it's separating that direct higher budget versus contingent. So what that I view is, is EOR started out exactly what you said. I wanna expand internationally, I just wanna do it compliantly, I don't want to register an entity, I got a few workers, that's all I want. EOR has evolved. People are looking at EOR as a growth strategy now to say, hey, I want ten to fifteen to thirty people in country, but they're wising up, right? It can't be just the lowest cost provider because the lowest cost provider, that's all well and good until s a worker doesn't get paid. Who's hearing that? Then client. but then also taking into consideration what your activity in country is doing, what the effect of that. And that turns into permanent establishment corporation tax, so on and so forth. So again, it's all kind of come together and evolving because the world of staff leasing solves for when you have that entity. That gives you that temporary outsource to be able to say, hey, I want to, you know, I got an influx coming in, so on and so forth. EOR. Generally don't have the entity, right? And so I just want access in the country. But again, it can only last for so long because your activities are going to dictate what that local government views you doing. And if they view you as corporate tax, the only way to solve for that is to start registering your entity. So i again, it's a moving beast and an animal that are all starting to come together, which is really interesting.
