Companies are struggling to find enough qualified candidates to fill their open positions. It doesn't matter if you're in tech, healthcare, or manufacturing — skills gaps, an aging workforce, and tightening immigration rules have all collided to create one of the toughest hiring markets we've seen in decades.
Waiting around for policy changes or hoping the perfect candidate magically appears in your backyard? That's not a strategy. But there's another option that more companies are discovering: building a global workforce with an Employer of Record (EOR).
Employer of Record services enable businesses to legally hire workers in different countries without the headache of setting up local entities, which means you can tap into global talent pools you couldn't access before — and do it faster and cheaper than undertaking a traditional international expansion.
Key takeaways:
- Widening skills gaps, an aging workforce, and lower birth rates are driving labor shortages across industries in the U.S.
- New H-1B visa fees have jumped to USD 100,000 per application, making it prohibitively expensive for most companies to sponsor foreign workers in the U.S.
- EOR services streamline global expansion and reduce administrative burdens — no local entity setup, lower compliance risks, and the flexibility to scale your team up or down as business needs shift.
The Current U.S. Labor Shortage: What's Driving It?
The labor shortage isn't just a matter of bad luck or a temporary blip. It's the result of several structural problems that have been brewing for years, and traditional recruitment approaches aren’t working.
Skills Gaps and Rapid Technological Change
Technology moves fast. Too fast for the domestic workforce to keep up, honestly. Companies need people with specialized skills in AI, cybersecurity, and advanced manufacturing, but there just aren't enough workers with training or real-world experience in these areas.
Manufacturing is feeling the impact particularly hard. The sector has bounced back fairly well since 2020, but the U.S. is expected to face a labor shortage of 1.9 million manufacturing workers by 2033. Healthcare is in a similar bind. The industry desperately needs everyone from biotech researchers to health informatics pros, but universities and training programs aren't churning out enough qualified graduates. If your business is in one of these sectors, you don't have years to wait for education systems to catch up.
The Retirement Wave
Baby boomers are retiring in massive numbers. We're talking about needing to hire more than 240,000 people every single month just to replace everyone who's leaving between now and 2030. Healthcare alone is expected to lose 2.1 million workers. Manufacturing? 1.8 million. Construction? Almost 1.3 million.
Younger generations entering the workforce can't make up for these losses. The current U.S. birthrate is roughly half of what it was in 1950, creating a fundamental imbalance in the worker replacement rate. Companies that bet solely on domestic hiring are likely to find themselves competing for a shrinking talent pool.
Immigration and Visa Barriers
For years, immigration has helped fill labor gaps. But recent policy shifts have made bringing international talent to the U.S. way more expensive and complicated. The big shock came in September 2025 when H-1B visa application fees skyrocketed to USD 100,000 — up from a previous range of USD 2,000 to USD 5,000.
This means a company sponsoring 10 H-1B workers annually is now looking at USD 1 million just in visa fees — and that's before filing fees, premium processing, and compliance costs. For small and medium-sized businesses, that's often a dealbreaker.
Even before the fee hike, the H-1B system was tough to navigate. There's an annual cap of 85,000 visas (65,000 regular spots plus 20,000 for advanced degree holders), which means that plenty of qualified candidates never get approved. Companies lucky enough to secure visas still faced long processing times and the very real possibility that their critical hire might not be able to start when needed.
All of this has prompted companies to ask a different question: What if we didn't need to bring workers to the U.S. at all?
How EOR Services Solve the Global Hiring Challenge
An Employer of Record (EOR) enables businesses to employ people internationally without jumping through all the usual hoops. The EOR becomes the legal employer on paper — they handle payroll processing, compliance, and benefits — while you stay in control of the actual work and day-to-day management of the employee.
Simplifying International Employment
Setting up a legal entity in another country is no easy task. You're looking at months of work and tens of thousands of dollars. There are local employment laws to decode, office space to secure, and bank accounts to open. You'll need local accountants and lawyers to ensure compliance. When you need to fill a critical role quickly, that timeline simply doesn't work.
EORs cut through all that red tape. With a partner like RemoFirst, you can hire in foreign countries without establishing local entities. The EOR already has the necessary infrastructure — including registered entities, payroll systems, and compliance frameworks — all ready to go.
Instead of spending months on entity setup before you even start recruiting, you can find the right candidate and have them working within days. When you're competing for top talent, that kind of speed makes a huge difference.
Ensuring Legal Compliance and Risk Mitigation
Every country has its own local labor laws, tax rules, and employment regulations. Make a mistake and you're facing penalties, back payments, and legal headaches. When companies attempt to decode foreign labor laws on their own, mistakes occur — and they're costly.
EOR providers specialize in ensuring companies' compliance across multiple countries. They track regulatory changes, handle tax withholdings, maintain the required documentation, and manage statutory benefits in accordance with local laws. An EOR’s expertise also protects companies from contractor misclassification risks, which governments worldwide are cracking down on.
Hiring in multiple countries? The compliance challenge multiplies exponentially. Meanwhile, an EOR gives you one point of contact for global employment compliance everywhere, so you can focus on running your business instead of becoming an expert in international labor laws.
Reducing Administrative Overhead
International hiring generates a veritable mountain of administrative work. You've got payroll in multiple currencies, different benefits systems to navigate, various employment contracts to manage, and compliance paperwork to maintain. For smaller businesses without dedicated international HR teams, all of this eats up time and resources that you can’t spare.
EORs handle all the busywork — employment contracts, onboarding, global payroll, local benefits, and record-keeping. Everything. This means you can scale your international team without having to scale your HR department at the same rate.
This is especially valuable if you don't have existing international operations. Instead of building expertise in foreign labor law, tax systems, and benefits administration from scratch, you leverage what the EOR already has in place. Even small teams can compete for global talent on equal footing with big multinationals.
Adapting Quickly to Market Needs
Business priorities shift. Projects ramp up, then wind down. New markets appear promising, but conditions can change. You need workforce flexibility without getting stuck with permanent infrastructure in every country where you operate.
That's where EOR services shine. Want to test a new international market? Hire a small team without committing to a local entity. If it works out, scale up quickly. If priorities change, adjust your team size without being stuck with infrastructure you're not using.
This flexibility is perfect for project-based work. Say you're launching a new product and need specialized expertise for 12 to 18 months. Rather than hiring domestically for roles that might not exist long-term, you can bring on international specialists for the project, then adjust as needed when it wraps up.
Real-World Scenarios: When EORs Make Sense for Employers
So, when does using an EOR actually make sense? Here are some situations where it's a smart move:
A tech startup in Austin needs senior engineers but struggles to match the compensation packages offered by big tech companies. By hiring developers in Eastern Europe or Latin America through an EOR, companies can access comparable talent at market rates for those regions — eliminating H-1B visa costs and the associated complexities.
A biotech company needs specialized researchers for a clinical trial. Instead of waiting months for visa approvals or limiting themselves to local candidates, they hire qualified researchers in countries with strong scientific talent pools. The EOR handles all the local employment requirements while the research team collaborates seamlessly.
A manufacturing company can't find experienced quality control specialists domestically. Rather than compromising on experience or leaving the position empty, they hire seasoned pros from countries with strong manufacturing traditions. The EOR manages local compliance while these specialists help maintain production standards.
A financial services firm needs customer support across multiple time zones. Instead of paying premium shift differentials for overnight coverage, they build a distributed team through an EOR. Better service continuity and better employee engagement.
Build Your Global Team with RemoFirst
Labor shortages aren't going anywhere. Demographic trends, skills gaps, and visa restrictions will continue to make hiring challenging across industries. The companies that'll come out ahead are the ones willing to look beyond domestic borders for talent.
RemoFirst lets you hire workers in 185+ countries without setting up local entities. We handle all standard HR functions — including payroll, benefits, compliance with local regulations, and even equipment shipping. You get one dashboard to manage your entire global team, no matter where they are.
Need more flexibility? We also handle global contractor management, allowing you to work with independent contractors worldwide while minimizing misclassification risks. Full-time employees, contractors, or a mix of both — we've got solutions that fit your setup.
And this isn't just for U.S. companies. RemoFirst works with businesses based anywhere, from London to Toronto to Singapore. We help you access the talent you need, regardless of where they, or your business, are located.
Book a demo to see how RemoFirst can help you build a global team that actually solves your talent shortage problems.
