The World Health Organization now projects a shortfall of 11 million health workers by 2030, revised upward from its prior estimate of 10 million (WHO, Global Strategy on Human Resources for Health update). In the United States, HRSA's Bureau of Health Workforce projects a shortage of roughly 124,180 physicians by 2027, rising to 187,130 by 2037, with the deepest gaps in primary care and non-metro areas (HRSA Physician Projections 2023–2038). AAMC's independent modeling points the same direction (AAMC Physician Workforce Projections).
At the same time, the commercial side of medicine is restructuring. Large pharma is cutting headcount and consolidating, while contract research organizations, digital-health platforms, and medtech companies keep expanding into new geographies. The hiring math — already tight in any single country — is becoming impossible to solve locally.
That is why more medical companies are using an Employer of Record (EOR) to hire globally. This article looks at what is driving that shift, what an EOR actually does for a healthcare or life-sciences employer, where it fits cleanly, and where it does not.
The hiring pressure is structural, not cyclical
The shortage is not a pandemic aftershock. It has been building for a decade and is now locked in by demographics.
A global shortfall weighted toward low- and middle-income countries. The WHO's updated projection of 11 million unfilled health-worker roles by 2030 is concentrated in regions that lack the training capacity to close the gap on their own (WHO Health Workforce). That reshapes where specialized talent — from regulatory specialists to data scientists with clinical-trial experience — is trained and where it lives.
US shortages are sharpest in primary care and non-metro. HRSA projects a primary-care physician shortage of roughly 70,610 by 2038, on top of broader physician gaps (HRSA). Nursing follows a similar pattern, with RN shortages projected at 11% in non-metro areas by 2038 against 2% in metro.
Pharma consolidates; CROs and digital health scale. Public tracking of 2025 layoffs shows broad restructuring across large-cap biopharma, with Novo Nordisk, Merck, Bayer, Bristol Myers Squibb, and others announcing substantial cuts (Fierce Biotech 2025 Layoff Tracker; PharmExec). On the other side, contract research organizations continue to post strong backlogs and are hiring aggressively in new regions to backfill trial capacity that has shifted out of China. Digital-health funding also rebounded in 2025, pulled by AI (Healthcare Dive on Rock Health 2025).
The result is a bifurcated market: sponsor companies are leaner, but their studies and product launches are as demanding as ever. That work is increasingly being done by smaller, faster, more distributed teams that cannot afford nine months of entity setup to hire a single clinical project manager in Poland.
What an Employer of Record actually is (and isn't)
An Employer of Record is a third party that legally employs a worker on behalf of the company that directs the worker's day-to-day output. The EOR handles local employment contracts, payroll, tax withholding, statutory benefits, termination compliance, and in most countries, the work-permit infrastructure.
It is not the same as:
- a staffing agency, which usually sources and places candidates
- a PEO, which co-employs within a country where the client already has an entity
- an agent of record in insurance or benefits broking
- an EOR in medical billing, a separate acronym for Explanation of Review
An EOR does not grant clinical licensure. It cannot transfer a US state nursing license across jurisdictions, and it cannot hold a DEA registration. What it does is take on the legal-employer role in countries where the company has no entity, inside the regulatory envelope of that country.
For a medical company, that distinction matters. An EOR can cleanly employ a regulatory-affairs lead in Switzerland, a biostatistician in Portugal, or a clinical project manager in Brazil. It cannot employ a bedside nurse in Ohio on behalf of a hospital that does not hold the relevant state registration.
Why medical companies specifically are turning to EOR
Four pressures show up repeatedly.
Speed. Opening a legal entity in a new country typically takes three to nine months, plus banking and payroll provisioning. A Phase II trial milestone, a commercial launch window, or an FDA-cleared product rollout does not wait. EOR compresses time-to-first-hire from months to days. For a clinical-stage biotech watching runway, that is often the decisive factor.
Reach into the right talent. Many roles the industry now hires are deliberately remote or regional: clinical research associates, medical science liaisons, medical writers, pharmacovigilance specialists, regulatory leads, health-economics researchers, and SaMD (software-as-a-medical-device) engineers. These are the roles structurally hardest to find at home. Parexel publicly disclosed plans to hire 2,000 staff in India to absorb trials shifting out of China (industry analysis); smaller sponsors are making similar moves across LATAM and Central Europe. EOR is the mechanism.
Misclassification risk. Using 1099 contractors has gotten harder in healthcare specifically. The US Department of Labor reinstated the multi-factor "economic realities" test for classification (DOL: FLSA misclassification), and enforcement in healthcare staffing has been significant — one DOL action in the sector resulted in a $9.3M settlement plus a $700,000 civil penalty (IntelyCare summary). Penalties aside, misclassification exposes companies to back-taxes, overtime, workers' comp gaps, and benefits liability. For a regulated workforce with unpredictable hours and close employer direction, EOR removes the classification question by making the worker a properly contracted employee in their home country.
Capital efficiency. The biotech funding environment remains constrained. Pre-funding a multi-country payroll — the model at many legacy EORs — sits awkwardly against short cash runways. An EOR that invoices in arrears, rather than holding salary deposits, keeps working capital on the balance sheet. This is one of the more quiet reasons finance leaders at clinical-stage companies push for a specific provider.
Where EOR fits, and where it does not
Being honest about fit is the most useful thing a healthcare-focused EOR article can do.
Good fits. Most commercial, R&D, and clinical-operations roles employed in a country where the worker already holds the right to practice — if practice is even required:
- clinical research associates, clinical trial managers, data managers
- biostatisticians, medical writers, regulatory affairs specialists
- pharmacovigilance and safety specialists
- medical science liaisons, health-economics and outcomes research roles
- software, data, ML, and product engineers for digital health and SaMD
- commercial, marketing, and business development hires in new markets
Edge cases. Roles where a license is needed but the scope of work is administrative, advisory, or monitoring rather than direct patient care. MSLs, clinical monitors, and medical writers frequently hold clinical credentials but are not treating patients under the employer's license; these roles are typically EOR-employable, but the provider should confirm local healthcare-practitioner employment rules.
Poor fits. Direct patient-facing clinical work under a US state license — for example, a hospital system hiring a staff nurse or a telehealth company employing a physician who will prescribe. In those cases the regulatory structure is about the license-holder's scope and the employer's registration, not about the employment contract. An EOR can help with non-clinical adjacent hires and with international non-US-licensed clinicians, but it is not a substitute for state-level credentialing or a clinical professional employer organization. Controlled-substance handling and some trial-investigator roles introduce similar limits.
Any EOR promising to make these poor-fit situations disappear is worth a second look.
What to look for in an EOR partner for medical companies
Five criteria separate EORs that work for healthcare and life-sciences buyers from those that do not.
- Country coverage that matches your clinical and commercial footprint. A CRO expanding trials into LATAM needs Mexico, Brazil, Argentina, and Colombia on day one. A medtech entering APAC needs Japan, Singapore, and Australia. Verify the provider holds entities in those specific countries, not just "coverage through partners."
- Owned entities vs. third-party aggregation. Owned entities shorten the chain between the client and the worker's employment. Aggregator models introduce a second legal employer and can create lag on onboarding changes, terminations, and compliance questions.
- Payroll funding model. Some EORs require the client to pre-fund the month's payroll in advance. Others invoice in arrears. For capital-constrained life-sciences teams, the difference is material.
- Support quality and response times. Healthcare hiring cycles are sensitive — a missed payroll or a late work-permit confirmation can cost a trial milestone. Ask for SLA data, named support contacts, and timezone coverage for the regions you hire into.
- Regulated-industry onboarding. Sanctions and OFAC screens, GxP-relevant background verification, GDPR-compliant data handling, and integration with common HRIS, ATS, and clinical-ops systems matter more here than in other verticals.
Borderless AI operates on an owned-entity model across 170+ countries, invoices payroll without requiring pre-funded salary deposits, and runs in-house support from North America — a profile designed for the capital-efficiency and speed constraints this article describes. It is one of several providers healthcare buyers should evaluate; the point is to evaluate against the criteria above rather than on general brand strength.
A practical decision frame
A simple way to decide:
The sequencing matters. Many medical companies use EOR as the first foothold in a country, then graduate specific hires into a local entity once the team reaches a size where owning the entity is cheaper than renting the employment relationship.
FAQs
What is an EOR in healthcare?
An Employer of Record is a third party that legally employs a worker in a country on behalf of a healthcare, life-sciences, or digital-health company that does not have a local entity. The EOR handles local employment contracts, payroll, taxes, statutory benefits, and compliance, while the client directs the work.
What does EOR stand for in healthcare?
EOR most commonly stands for Employer of Record. Separately, in medical billing, "EOR" can mean Explanation of Review — a distinct term unrelated to employment.
Can an EOR manage compliance for healthcare licences?
An EOR manages employment-law compliance: contracts, payroll, taxes, benefits, terminations. It can verify credentials during onboarding and keep employment-side documentation current. It does not grant, transfer, or replace clinical licensure itself — that is regulated by the jurisdiction that issued the license.
Is EOR cheaper than opening an entity?
For the first several hires in a country, yes, almost always. Entity setup runs from roughly $15K to $50K+ plus recurring legal, accounting, and payroll provider costs. EOR pricing is typically a monthly fee per employee. The crossover point depends on the country, but many medical companies find EOR cheaper below 10–20 employees per country and entity ownership cheaper above it.
Can an EOR hire clinical staff for US hospitals?
Generally no, for direct patient-facing roles. US clinical staffing under state licenses is governed by state registration of the employer and the individual clinician's license — outside the scope of an EOR. An EOR can, however, employ non-clinical and international hires supporting US operations.
Where this leaves medical companies
The hiring pressure isn't going to ease. Demographic gaps, sponsor restructuring, and the geographic shift of clinical trials all push in the same direction: medical companies need to hire across borders faster than entity setup allows, inside regulatory envelopes that make misclassification risky. Employer of Record is how most of them are solving it for the roles where it fits, with clear eyes about where it does not.
If you are evaluating EOR for a healthcare, life-sciences, or digital-health workforce, the most useful next step is a specific conversation about country coverage, payroll model, and regulated-industry onboarding — not a generic demo. Borderless AI's healthcare team is built for that conversation.
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