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Can local Canadian companies also take advantage of EOR services in Canada?

While horizons and breaking into new markets stands as a testament to a company’s growth and adaptability. This endeavor, however exciting, is laden with complexities. One key aspect that presents challenges at every turn is human resource management, especially in a country as expansive and diverse as Canada.

Historically, global enterprises venturing into foreign territories have leaned on the expertise and efficiencies of experienced Employer of Record (EOR) service such as Pivotal HR Solutions. The reliance on expert EORs isn’t just a matter of convenience; it’s a strategic move to navigate unfamiliar terrains, especially when it comes to hiring and compliance. With such evident advantages in international contexts, it’s intriguing to delve into the potential of EORs for Canadian businesses looking to expand domestically. Pivotal HR Solutions has decades of experience helping Canadian companies to expand through EOR services and other outsource HR services, such as HR Management, Payroll services, and expert Recruiting.

In this feature we highlight why EORs, a cornerstone for expanding global companies, can be just as advantageous for local Canadian expansions.

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The True Cost of Hiring Employees in Canada

At first glance, hiring appears straightforward: advertise the position, interview, select, and onboard. However, the true cost of hiring is multifaceted and extends far beyond the apparent salary package.

Benefits form a significant proportion of these hidden costs. The Conference Board of Canada in 2019 highlighted that benefits typically account for about 10 percent of the total employer costs, which translates to an average of $9k per employee[1]. These aren’t just limited to health and insurance. We’re talking about a spectrum that includes paid leaves, supplemental pay, retirement provisions, mental health coverage, and even savings plans.

Companies, on average, spend approximately $4,129 just to fill an open position. And that’s not counting the 42 days it typically takes to close that position. The dynamics change with the duration of the search and the nature of the role. For instance, executive roles might demand more rigorous search endeavors, escalating costs.

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Training is another element. Preparing a new recruit to align with the company’s ethos, equipping them with the required skills, and ensuring they can actively contribute takes resources. The 2018 Training Industry Report[2] underscores this by indicating an average spend of $986 per learner. And this figure isn’t static; it fluctuates based on the company’s size and the intricacies of the role.

EOR in the Canadian Landscape: An Untapped Potential

While the costs associated with hiring and training are substantial, they are a necessary expenditure for companies looking to thrive. But what if there was a way to optimize this process, especially for Canadian companies aiming to spread their wings in different provinces?

Employer of Record (EOR) services, commonly associated with international expansions, are also profoundly relevant in the Canadian context. When a company in British Columbia, for instance, wants to branch out to Quebec, the differences in provincial regulations, culture, and workforce dynamics present challenges reminiscent of entering a new country. This is where EOR can act as a bridge, smoothening the process.

Why EOR for Local Expansions?

The allure of EOR isn’t merely rooted in its global applicability. Instead, it’s the tangible benefits that these services offer, making them an attractive proposition for businesses of all scales. Let’s delve deeper into the specific advantages Canadian companies can expect when considering EOR for intra-Canada growth.

1.   Cost Efficiency

At the heart of business decision-making lies the evaluation of costs and returns. The hiring process, despite its paramount importance, can often become a significant financial drain. The complexities of recruiting, vetting, and onboarding talent come with their set of costs, both direct and hidden.

EORs, having established a foothold in the industry, possess relationships with vast talent networks. This not only reduces the costs associated with scouting and recruiting but also ensures quality hires. Moreover, by allocating the intricacies of HR tasks to EORs, companies can channel their resources and energy towards their core competencies, ensuring higher productivity and better returns.

2.   Regulatory Compliance

Canada’s vastness isn’t just geographical; it extends to its diverse provincial regulations too. Each province, with its unique set of employment laws, presents a labyrinth of rules and regulations. Navigating these without expertise can be both time-consuming and risky.

Here’s where EORs shine. Their primary function revolves around ensuring compliance, which means they’re constantly updated on inter-provincial employment laws. By partnering with an EOR, companies can rest easy, knowing they’re compliant and shielded from potential legal complications.

3.   Flexibility and Speed

In today’s fast-paced business world, agility and speed are more than just advantages; they’re necessities. Expanding to new markets requires a swift transition, especially in the initial stages of setting up operations.

EORs, given their entrenched presence across provinces, can facilitate quick setups. Their networks, resources, and expertise mean that companies can hit the ground running, ensuring they capitalize on market opportunities without unnecessary delays.

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Redefining Local Expansion for Canadian Companies

For Canadian businesses, the expansive geographical landscape coupled with distinct provincial nuances presents both opportunities and challenges. Growth, while essential, requires careful maneuvering through a maze of regulatory, cultural, and logistical barriers. EOR services emerge as a trusted partner in this journey.

By leaning on the expertise of EORs, companies can convert potential challenges into advantages. The cost, time, and resources saved in the process can be reinvested into the business, fostering innovation and growth. More importantly, it allows businesses to remain agile, tapping into new markets with confidence and speed.

In the rapidly evolving Canadian business ecosystem, embracing EOR for local expansions might very well be the differentiator between companies that grow and those that struggle with unexpected challenges. Canadian companies, both established and emerging, should recognize this untapped potential, ensuring their growth story is one of strategic advantage rather than reactive adjustments.

Do you have a question about expanding in Canada with EOR services? Contact the experts at Pivotal HR Solutions:

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[1] – Calculating real costs of hiring in Canada

[2] – Training Industry Report


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