Nearshoring Talent Via Employer-of-Record Definitely Isn’t Exploitation... Right?
Nearshoring through EOR promises efficiency but hides exploitation. If they’re good enough to hire, they’re good enough to hire for real.
On the surface, nearshoring is a win-win. Singaporean firms looking to “scale efficiently” while “empowering regional talent” reach across the water to Indonesia, Vietnam, or the Philippines. The pitch is loaded with optimism: “high-skill, low-cost, time-zone aligned professionals” just waiting to be “hired.” Sounds fair. Right?
But peer under the hood and that hiring starts to look suspiciously like a mirage. These workers aren’t employees in any meaningful sense. They’re looped in via an Employer of Record (EOR), that lets companies dodge the duties of actual employment. No CPF, no inclusion, no long-term incentive plan.
What you have is the optics of hiring with none of the substance. This is administrative sleight of hand. A cost centre masquerading as a colleague. The worker contributes to the Singaporean balance sheet, yet remains structurally locked out of it.
Let’s look at what happens when companies outsource value while keeping power, opportunity, and dignity firmly in-house.
Employer of Record: Because Commitment Is Scary
Somewhere in the liminal space between accountability and convenience lies the EOR model, built for companies that want the benefits of global talent without the guilt of actual responsibility. Think of it as the corporate world’s version of ‘situationship.’
Let’s say you’re based in Singapore and you spot brilliant tech talent in Indonesia. You could sponsor their relocation, pay them a market-aligned Singapore wage, cover CPF or EPF contributions, onboard them properly, and make them part of the team. Or... you could simply sign a contract with an EOR firm in Jakarta, keep the talent where they are, and pay someone else to be their “official” employer.
The worker reports to your managers, uses your tools, follows your roadmap, works your hours, joins your retros, and helps ship your product. But if they burn out, want parental leave, or ask for a promotion? That’s between them and a faceless intermediary you pay to say, “we’re not responsible.”
It’s evasive in its ability to let companies extract value without incurring duty. A model built to deliver “talent solutions,” while also sidestepping concepts like inclusion, upward mobility, or legal protection.
And if anything goes wrong? There’s always a fallback line: “They’re technically not our employee.”
So yes, it’s hiring. Just the commitment-free kind. The talent gets a job; the company gets the output; everyone wins… except the person doing the actual work.
Value Creation Without Value Transfer: A Modern Masterpiece
A developer in Jakarta, working through an Employer of Record, ships the same code, fixes the same bugs, and deals with the same mystery tickets as a Singapore-based counterpart. They may even push the release, stay up for the on-call alert, and get a muted thumbs-up emoji from the product manager.
But come payday, things diverge. The Singapore dev walks away with S$7,000. The Jakarta dev? A generous IDR 15 million. That’s around S$1,300, and yes, before tax.
Cue the corporate rationalisation machine: “We’re paying above market.” As if morality is measured in percentage points above an arbitrarily low baseline. As if adding 5 juta to an underpaid role suddenly transforms exploitation into empowerment.
This is about who captures the value. And in this arrangement, the value largely flows upward: to the buyer, to the EOR, to the margins; not to the person doing the work. The worker gets a job; the company gets a deal.
But if someone is skilled enough to contribute to a global product, serve a Singaporean customer base, or meet international quality standards, why are they not good enough to receive opportunity on par with that contribution?
Because it’s cheaper not to.
Because it means avoiding relocation.
Because work visa forms have checkboxes and salary floors.
Because treating people as equals costs more.
And so, we substitute equity for exposure. “You’re part of a global team,” we say. We just don’t mention which part of the globe gets the stock options.
“If They’re Good Enough to Hire, Then… Just Hire Them”
Singapore isn’t some bureaucratic fortress when it comes to global talent. In fact, it has one of the most functional visa systems in Asia. Between the Employment Pass (EP) and S Pass, it offers structured, scalable ways to bring in skilled professionals, complete with published salary thresholds, transparent quotas, and a self-service portal.
But real hiring comes with real responsibility. And that’s where the enthusiasm suddenly tapers off.
Because if you actually hired that brilliant developer in Jakarta, you’d be signing up for a few things.
A competitive Singapore wage.
Statutory benefits, levies, performance reviews, stock options,
And that dangerous thing called career development.
You might even have to remember their birthday.
So instead, we get clever. We keep them technically “remote,” functionally full-time, and emotionally adrift. A well-oiled arrangement where the value flows in, but the commitment stays out.
Meanwhile, their Singaporean counterparts on the same projects, with the same deadlines, get invited to offsites, praised in all-hands meetings, and considered for promotions. The EOR worker? They get a muted mention in the final deck slide.
This is the modern twist on inclusion: everyone belongs, but not everyone benefits. And so, the person contributing just as much becomes something less than equal. Not because they lack skill, but because the company lacks willingness.
If someone’s good enough to be on your team, they’re good enough to be on your team.
How We Justify This to Ourselves (Without Gagging)
Nearshoring through an EOR model comes with a predictable playbook of justifications. The kind you’ll find carefully rehearsed on procurement calls, HR briefings, and LinkedIn posts with stock photos of smiling Southeast Asian developers on Zoom. These justifications are designed not to convince the worker. They’re designed to help the decision-makers sleep at night.
“We’re empowering talent in emerging markets.”
Absolutely. By keeping them in a permanent holding pattern outside the payroll perimeter, cut off from equity, bonuses, and real inclusion. Nothing says empowerment like outsourcing someone’s future to a third party.“They earn more than they would locally.”
This one gets a lot of air time. As if being slightly underpaid in a high-value context becomes virtuous if the baseline is low enough. Yes, they’re doing better than average. That doesn’t mean they’re being treated fairly. “Better than the local market” is not the same as “proportionate to the value they create.”“We’re providing international exposure.”
Right. Exposure to late-night meetings, decisions they don’t influence, and an HR function they’ll never interact with. Exposure, in this case, mostly means seeing the perks and promotions they don’t get.“We can’t afford to pay Singapore wages.”
Curious, considering the company can afford to close Singapore-priced deals, raise Singapore-sized funding rounds, and list on global markets. When it’s time to reward the people doing the work, somehow the budget disappears into a fog of “local market benchmarking.”
These aren’t reasons. They’re rationalisations. Smoke signals sent up from a moral grey zone, hoping no one looks too closely.
No one’s asking for sainthood. You don’t have to fly a developer from Surabaya to Singapore tomorrow and drop them into a CBD apartment. This isn’t about full wage parity or rewriting global economics in one procurement cycle.
It’s about recognising the imbalance for what it is. Someone is building your product, serving your customers, and contributing to your roadmap. If they’re good enough to carry that responsibility, they’re good enough to carry a real employment status. Not “worker of convenience.” Not “cost line in the EOR invoice.” A real employee. With rights, stability, and a nameplate in the org chart.
And if you truly can’t hire them in Singapore? Then start investing in fairness where they are. That means more than paying slightly above market. It means a living wage with surplus, access to promotion, real benefits, predictable schedules, and a say in their working life.
We don’t need more “global talent strategies.” We need less hypocrisy.
At StratEx - Indonesia Business Advisory we help companies build ethical employment structures in Indonesia. Contact us to move beyond EOR dependency and build direct, sustainable talent pipelines