When to Own EOR Infrastructure
Matt Drozdzynski, CEO and co-founder of Plane, on global payroll post-COVID
Owning the EOR stack matters most when EOR is the core product, because the economics and service quality of that business are shaped by who controls the local entities, payroll rails, and compliance workflows. A vertically integrated provider can remove partner fees, launch country specific workflows faster, and fix problems inside one system. But Plane is built around the broader job of running a whole startup team, where EOR is often a small share of headcount and wide coverage matters more than owning every country operation.
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Plane frames the average startup workforce as mostly US employees and contractors, with only 5% to 10% in EOR. In that mix, the product win comes from one interface for W2 payroll, contractors, international payroll, and EOR, not from building owned entities in every long tail country.
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Deel shows why ownership pays off when EOR volume is large. By replacing third party EOR partners and local payroll processors with its own entities and payroll engine, it improved margins and scaled into a much larger payroll and HR platform.
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The practical trade off is coverage versus control. A partner model lets a platform support hiring in more countries sooner, while a native entity model can be cheaper and smoother when a customer is specifically shopping for an employee in Germany, France, or another single jurisdiction.
The market is moving toward full stack payroll platforms that cover domestic payroll, contractors, global payroll, and EOR in one system. As these products converge, providers with enough EOR volume will keep pulling more infrastructure in house, while startup focused platforms will keep using partnerships where that helps them cover the whole team from day one.