Making the right choice when your team is your most valuable asset.
Expanding internationally is no longer just a question of how fast, but how well.
For product-led companies in the UK, the pressure to scale engineering capacity without compromising delivery quality, culture, or governance is growing. Many start by looking at common models like Employer of Record (EOR) or Professional Employer Organisations (PEO) to bypass legal setup and speed up hiring. These models offer payroll and business compliance services, but they don’t always deliver the strategic, embedded teams needed for long-term success.
The truth is: your ability to scale depends less on how quickly you hire, and more on how deeply your team integrates with your product vision, tools, and standards.
In this blog, we’ll clarify the key differences between EOR, PEO, and the Tech Hub model, helping you decide which approach best supports your scale-up goals and long-term delivery.
What Is an Employer of Record (EOR)?
An Employer of Record is a third-party company that hires and manages employees on your behalf. They handle payroll, local employment law, taxes, benefits, and compliance, essentially becoming the legal employer while you retain control over day-to-day work.
When to consider EOR:
- You want to hire abroad without setting up a legal entity
- You need quick access to talent in a new market
- Your focus is on short-term hiring or testing new markets
However, here’s the catch.
While EORs provide a fast entry point, they lack the infrastructure and alignment needed for long-term product development.
Most EORs are designed for compliance, not collaboration. That creates limitations:
- You don’t own the employer-employee relationship
- You don’t shape the culture or retention incentives
- Your delivery quality depends on external HR processes
- IP protection and operational governance may sit in a grey area
EORs are a good starting point, but they rarely serve as a sustainable solution for tech scale-ups building cross-border product teams.
What Is a PEO (Professional Employer Organisation)?
A Professional Employer Organisation (PEO) offers a co-employment model, where your company and the PEO share employer responsibilities.
PEOs typically handle:
- Payroll and tax filings
- Employee benefits
- HR administration
- Risk management
- Regulatory compliance
While this is useful for small and mid-sized companies operating domestically (especially in the US), PEOs aren’t suited for international operations unless they also offer EOR services in specific countries.
Key limits of PEOs:
- You must already have a local legal entity in the country
- Responsibility and liability are shared, not transferred
- HR support is bundled, but delivery ownership is not
- Cultural and strategic team alignment is not guaranteed
In short, PEOs provides HR outsourcing solutions, not a delivery structure. They help you manage people, but not scale product development.
EOR vs PEO: A Quick Comparison
| Feature | EOR | PEO |
|---|---|---|
|
Legal Entity Needed |
No |
Yes |
|
Employment Relationship |
Third party is legal employer |
Co-employment |
|
Talent Ownership |
None |
Shared |
|
Compliance & Payroll |
Fully managed |
Shared responsibility |
|
Use Case |
Fast international hiring |
Small business HR support |
|
Strategic Delivery Focus |
Low |
Low |
But What If You Need to Scale a Tech Team?
While EORs and PEOs help hire, they don’t help build. This is where the Tech Hub model comes in.
Tech companies need more than compliant employment contracts, they need a dedicated, embedded team that understands their product, shares their vision, and delivers at pace.
What Is a Tech Hub?
A Tech Hub is a fully managed delivery services built by a partner like INSCALE. It gives you a strategic location and embedded team without needing to set up your own legal entity.
Unlike EOR and PEO, a Tech Hub is designed for delivery, not just employment.
INSCALE’s model handles:
- Talent sourcing
- Onboarding
- HR and compliance
- Local infrastructure (facility & amenities)
- Performance management
- Daily integration into your tools and workflows
The difference? You don’t get just the right hire, you get a high-performing team.
EOR vs PEO vs Tech Hub: Key Differences
| Feature | EOR | PEO | Tech Hub (INSCALE) |
|---|---|---|---|
|
Entity Required |
No |
Yes |
No (we provide the structure) |
|
Team Integration |
Low |
Low |
High – fully embedded |
|
Ownership |
None |
Shared |
Full, with BOT transfer option |
|
Delivery Capability |
Minimal |
None |
Core focused |
|
Governance & IP |
Shared / unclear |
Shared |
Fully protected |
|
Cultural Alignment |
Varies |
Low |
High – designed with, and for you |
|
Strategic Scalability |
Limited |
Limited |
Built for long-term growth |
Why Tech Hubs Fit Product-Led Companies
If you’re a CTO, COO, or Head of Engineering in a UK-based scale-up, and your goal is to build a high-performance engineering function abroad, Tech Hubs offer what EORs and PEOs can’t:
- Full team integration
- No entity burden
- Strong cultural alignment
- Transparent cost structures
- Clear ownership path
- Faster onboarding and lower turnover
At INSCALE, we build embedded engineering teams in strategic locations like Portugal, Malaysia, and North Macedonia that plug into your roadmap and accelerate your delivery.
And when you’re ready to take full control, our Build-Operate-Transfer (BOT) model enables seamless transition to in-house ownership.
When to Use Each Model
Use an EOR if:
- You’re testing a new market
- You need 1–2 hires quickly
- You’re not ready to commit to long-term delivery
Use a PEO if:
- You already have a legal entity
- You operate domestically
- You need HR support but not delivery help
Use a Tech Hub if:
- You’re scaling product delivery abroad
- You want full integration without an entity
- You need dedicated engineers who stay and grow
- You care about cultural alignment and governance
- You want to de-risk your hiring with a path to ownership
Not ready for a tech hub?
INSCALE also provides Remote Teams, a delivery for distributed, embedded teams across Europe and Asia, with the same delivery standards and support as our Tech Hubs.
This is ideal for companies with remote-first cultures who want access to embedded talent without the infrastructure.
Final Thoughts: Scale With Strategy
There’s no one-size-fits-all solution when expanding globally. But knowing the difference between EOR, PEO, and Tech Hub can save your business time, risk, and cost.
If you’re aiming to grow your tech team while keeping control, performance, and culture intact, a Tech Hub is your strategic advantage.
At INSCALE, we don’t just build teams. We build delivery engines.
Together we become more.
