Manpower agency or Employer of Record? A straight answer for offshore operators
If you found the person, you probably shouldn’t be paying someone else to supply them.
That sounds obvious. It isn’t how most offshore projects run. A drilling superintendent your team has worked with on three campaigns gets rehired for the fourth, and the contract still goes through a manpower agency. The agency didn’t find him. It just bills for every day he’s on board.
There are good reasons to use a manpower agency. There are also good reasons to stop. The difference comes down to one question: do you need someone to find the people, or just someone to employ them properly?
Quick answer: use a manpower agency when you need it to find people for you, fast and in volume. Use an Employer of Record when you’ve already chosen the person and just need them employed legally in a country where you don’t have a company. Most offshore operators get the best result by using both.
What does a manpower agency actually do?
A manpower supply company recruits workers and places them on your project. It sources candidates from its own pool, takes care of hiring, onboarding and payroll, and charges you a rate per person per day. That rate covers the worker’s pay plus the agency’s costs and margin.
For some jobs, that’s exactly what you want. A shutdown that needs 40 ratings in three weeks. A rig that’s lost two mechanics mid-campaign. Roles where you don’t know anyone and don’t have time to find them. Paying for sourcing makes sense when sourcing is the hard part.
The catch is that the margin doesn’t switch off once the hard part is done. It’s baked into the day rate for as long as the person works. On rotational contracts that run for years, that adds up.
What does an Employer of Record do?
An Employer of Record (EOR) becomes the legal employer of someone you’ve already chosen, in a country where you don’t have your own company. It issues the local employment contract, runs payroll, deducts the right taxes, pays social security and handles statutory benefits. You run the work. The worker reports to your offshore installation manager or project lead, like anyone else on the crew.
What an EOR doesn’t do is find people. That’s the whole point. You bring the name, the rate and the start date. The EOR makes it legal to employ them.
Manpower agency vs Employer of Record: side by side
| Manpower agency | Employer of Record | |
|---|---|---|
| Who finds the worker | The agency | You |
| Who sets pay and terms | Mostly the agency | You, within local law |
| How you pay | Day rate with margin built in | Employment costs plus a service fee |
| Who the worker deals with day to day | The agency and you | You |
| What you can see | Your invoice | What the worker is paid, line by line |
| Best for | Volume, speed, roles you can’t fill yourself | Named specialists, repeat crew, long rotations |
Why does the contracting chain matter more offshore?
Oil and gas contracts stack up. Operator, main contractor, subcontractor, agency, sometimes an offshore payroll company at the end of it. Every link is another place where tax and social security can go unpaid without anyone at the top noticing.
The UK found this out the hard way. From April 2014, HMRC brought in rules for offshore employment intermediaries that apply when someone is employed on the UK Continental Shelf in oil and gas by or through an offshore intermediary that isn’t operating PAYE. Under the related National Insurance rules, the oil field licensee can be on the hook for unpaid employer contributions unless the offshore employer holds an exemption certificate from HMRC. When the changes landed, KPMG estimated they would cost the industry £100 million.
The UK is one example, but the pattern holds elsewhere. Tax authorities are less interested in who signed the contract than in who benefited from the work. A long chain doesn’t move the risk away from you. It just makes it harder to see.
An EOR shortens the chain. One employer, in the country where the work happens, registered with the local authorities and paying what’s owed every month.
When should you keep using a manpower agency?
Stick with an agency when:
- you need people quickly and don’t have names
- the roles are short, interchangeable and high volume
- you want the agency to carry replacement risk if someone walks off the job
None of that is a criticism of agencies. It’s what they’re built for.
When does an Employer of Record make more sense?
Switch to an EOR when you’re paying for something you no longer need. Usually that looks like:
- your team recruited the person, or they’ve worked with you before
- the rotation runs for months or years, not weeks
- you’re working in a country where you don’t have an entity, and don’t want one
- you want to know exactly what each crew member is paid, not just what you’re invoiced
- the role needs a visa or work permit sorted before mobilisation
For an FPSO programme, that often covers the specialists who follow the unit from the fabrication yard through commissioning and into production. The same people, across several countries, for years.
Do you have to pick one?
Most offshore operators shouldn’t. Keep the agency for volume and short-notice roles. Move your core crew, the people you’d rehire on the next campaign anyway, onto an EOR. You keep the flexibility where you need it and stop paying sourcing fees on people you sourced yourself.
Where AgileHRO comes in
AgileHRO is an Employer of Record, payroll and global mobility provider working in 150+ countries. We don’t recruit. You choose the specialist, and we employ them compliantly in the project jurisdiction, run payroll from approved timesheets, and sort visas, permits and mobilisation.
We built Employer of Record for FPSO programmes for exactly this setup, and our energy workforce team handles rotational rosters and offshore allowances across multiple countries.
Talk to an offshore specialist →
Frequently asked questions
Is an Employer of Record cheaper than a manpower agency?
For people you found yourself, usually yes, because you stop paying a recruitment margin on every day they work. For roles you can’t fill alone, the agency’s sourcing is what you’re paying for, and that has value.
Does an EOR recruit offshore workers?
No. An EOR employs people you’ve already selected. Recruitment is a separate service.
Who manages the worker under an EOR?
You do. The EOR is the legal employer on paper. Your team directs the work offshore.
Can an EOR pay day rates and rotational crews?
Yes. AgileHRO runs payroll from approved timesheets, so days on board, overtime and overstays are paid as worked.
Who is liable for unpaid tax on the UK Continental Shelf?
Under HMRC’s rules, the oil field licensee can be liable for unpaid employer National Insurance where an offshore intermediary doesn’t pay it, unless that intermediary holds an HMRC exemption certificate.