When hiring internationally, companies face an important question: should we hire employees directly or work with an Employer of Record (EOR)? For businesses expanding into the Netherlands or hiring global talent, this decision impacts compliance, flexibility, and speed.

In this article, we explore the key differences between employer of record vs. direct hiring, helping HR professionals and decision-makers assess which path fits best. Whether you’re navigating Dutch labor laws or simply need to onboard an international employee fast, understanding the benefits of EOR vs. direct hiring can save your company time, money, and risk.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organization that officially employs talent on behalf of your business. While you manage the day-to-day work of the employee, the EOR takes care of the legal employment, payroll, benefits, and tax compliance.

When a company acts as your EOR in the Netherlands, they directly employ the individual and assign them to work for your company.

 This approach is especially valuable for hiring employees abroad without setting up a local entity.

With an EOR, companies maintain operational control over employees while the EOR ensures full compliance with local labor regulations—minimizing administrative burdens and legal risk.

What is Direct Hiring?

Direct hiring means your company employs the individual directly and handles all HR, legal, and payroll responsibilities internally. While this provides full control, it also places the burden of compliance with Dutch employment law on your organization. To directly hire in the Netherlands, foreign companies typically need to set up a local legal entity and register for payroll tax to employ non-EU talent.

For companies with an established presence and HR infrastructure, direct hiring may be a viable option. But for businesses entering a new market or hiring a single international employee, it can be complex and time-consuming.

In those cases, Broadstreet, part of our holding, can assist with setting up a Dutch B.V. and managing the necessary registrations and compliance steps.

What Are the Differences Between EOR and Direct Hiring?

When comparing employer of record vs. direct hiring, several key differences stand out—especially for international companies operating in or expanding to the Netherlands.

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In some Dutch licensing situations, using an EOR isn’t just a preference—it’s a requirement. That makes global employment solutions like Employor essential for compliant onboarding.

When to choose EOR and when to choose direct hiring?

Choose an EOR when:

• You don’t have a Dutch legal entity.
• You’re testing the Dutch market or hiring one or two employees.
• You need to move quickly and ensure compliance.
• You require immigration support (e.g. IND sponsorship).

Choose direct hiring when:

• You already operate in the Netherlands.
• You have in-house HR and legal expertise.
• You’re hiring multiple employees and plan to grow a long-term presence.

The decision between direct hiring vs. global employment solutions depends on your company’s stage, resources, and goals.

Why choose Employor as your EOR in the Netherlands?

At Employor, we provide transparent, compliant, and efficient EOR services tailored to your needs. We ensure your company can hire the right talent—without the headaches. Here’s what sets us apart:

• Fast onboarding: We help your employee start just as quickly as with direct hiring.
• Clear pricing: A fixed monthly fee and no salary-based commissions.
• Compliance-first: Full adherence to Dutch labor law and collective labor agreements.
• Tax and accounting support: As part of the Broadstreet Group, we offer additional services beyond payroll.
• Personal contact: You'll have a dedicated contact for ongoing support.
• Registered IND sponsor: We can handle residence and work permit applications for non-EU employees.

The smart way to hire international talent

Understanding the differences between employer of record vs. direct hiring is key to making smart hiring decisions—especially in a regulated market like the Netherlands.

If you need speed, flexibility, and full legal compliance, an EOR is the clear solution. And when your business is ready, we can help you transition to direct hiring or set up your local entity.

Hiring employees abroad doesn’t have to be complicated. Contact us today to explore how our EOR services can simplify your next hire.