As the cost of employing staff in the UK continues to rise, many international businesses are now rethinking how they hire in Britain. One solution is gaining traction fast: Employer of Record (EOR) Services.
What’s driving the Shift?
From April 2025, the UK government increased employer National Insurance (NI) contributions from 13.8% to 15%. On top of that, the threshold at which employers start paying NI has dropped from £9,100 to £5,000 per year. In short, companies are now paying more NI on more of their employees’ wages.
This has a serious knock-on effect for businesses.
According to the British Chambers of Commerce, 82% of firms say the NI hike will impact their plans. Over half expect it to affect recruitment, and more than a third anticipate reducing investment.
It’s not just the numbers telling the story—employer confidence has hit historic lows, says the Chartered Institute of Personnel and Development, with rising costs and ongoing economic uncertainty taking their toll.
EORs: A Smarter Way to Hire in the UK
So, what are foreign companies doing instead?
Enter the Employer of Record (EOR) model. An EOR allows international businesses to hire UK-based staff without the need to set up a UK legal entity. The EOR handles payroll, taxes, and compliance—yes, including those ever-growing NI contributions.
It’s a streamlined, cost-effective way to build a UK presence without the headache (and overhead) of launching a subsidiary.
The Bottom Line
With EOR services, companies can:
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Quickly hire UK talent without local incorporation
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Stay compliant with tax and employment laws
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Reduce administrative and financial burdens
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Adapt faster in a changing economic climate
As the employment landscape evolves, so too must hiring strategies. For many global businesses, EORs aren’t just an option—they’re becoming a necessity.
Want to learn more about how EOR solutions can work for your business?
Reach out to Adam Drew at adam.drew@darwinrecruitment.com or call +44 1277 638973.
