Owning the local legal stack
Matt Redler, co-founder and CEO of Panther, on building a modern employer of record
The long term winners in global payroll will be the companies that own the messy country by country work instead of just wrapping a dashboard around partners. In employer of record, table stakes are basic country coverage, onboarding flows, contracts, payroll runs, and contractor payments. The real separation comes from who controls the legal entity, compliance process, payroll operations, and money movement well enough to cut errors, speed up onboarding, lower gross margin leakage, and bundle more products on top.
-
A lot of the market still looks like software on the front and services underneath. Papaya openly describes an EOR model that uses vetted local legal and accounting partners, while Remote has emphasized owning the legal infrastructure where it operates. That difference matters because whoever controls the local stack has more direct control over service quality, compliance updates, and margins.
-
Customer facing features quickly become table stakes. The harder moat is operational. Panther described the unit economics of reselling a partner EOR as structurally weak, with roughly $300 per employee per month paid to the underlying provider against a $500 selling price. That leaves little room for sales, support, or product investment, which is why pure aggregation gets squeezed over time.
-
Deel shows what scale looks like when a provider turns hiring into a broader system of record. It started with contractors, expanded into EOR and payroll, and then added IT, immigration, and HR tools. That makes it harder to churn out at the moment a customer graduates from one worker type or geography to another.
From here, the category keeps moving toward unified global and domestic payroll, with compliance and money movement disappearing into one system. The providers that win will look less like marketplaces of local partners and more like deeply integrated payroll infrastructure, with better data, better margins, and more room to layer software and financial services on top.