UK digital marketing agencies are growing fast, but the talent market hasn't kept up. Sense’s staffing report has outlined that 7 out of 10 UK employers are struggling to find employees and fill vacancies in specialist marketing and communications roles. As they struggle, day rates for the experienced freelancers in the industry are climbing, IR35 compliance is a complex feat, and the cost of a direct UK hire, salary, pension, National Insurance, and recruitment fees, is higher than ever.
For a growing number of digital marketing agencies, the answer to this has been an Employer of Record (EOR). An EOR lets you hire full-time employees in other countries, including South Africa, which has become a significant pipeline for UK agencies, without setting up a local entity.
Within the UK marketing hiring market, the demand for specialist skills is high, but the domestic supply of experienced candidates is tight and expensive. This has proven to be a challenge for many digital marketing agencies as they have multiple clients to satisfy. Completing the typical hiring process, which may take up to 3 months, is not ideal when there are tight deadlines across multiple accounts.
Remote hiring has become an answer for many. UK digital marketing agencies are increasingly tapping into global talent, particularly from South Africa, to meet critical skill demands in marketing and communications. This has been because of the strong English proficiency in South Africa, a similar time zone, salaries that reflect local market rates, and experience with platforms like Meta Ads, Google Ads, and HubSpot.
Many digital marketing agencies have chosen to hire freelancers as they’re quick to hire, don’t require contracts of employment, and simply complete and quote for the work as briefed. This may seem like the best choice on the surface, but this is not always true.
According to CalcPros, marketing professionals charge between £200-£600 per day. If we consider a median quote for a freelancer working 5 days a week, this would amount to £104,000 per year. You're also carrying the management overhead: briefing, chasing, coordinating with other freelancers where specialisms don't overlap, and rebuilding context each time someone rolls off a project.
When comparing it to a full-time salary in a similar position, Legends EOR’s salary benchmarking tool reports that UK professionals earn £47,500 per year. But this number is much lower if British businesses were to consider South African talent. Legends EOR’s salary benchmarking tool reports that South African professionals in a similar role earn £16,300 per year. Hiring South African professionals through an EOR also means no employer NIC, no recruitment fee, and no ongoing HR admin cost.
Then there's IR35. If a freelancer works exclusively for your agency, operates under your direction, and is embedded in your team structure, there's a real possibility HMRC would consider them a deemed employee. As the 2025 IR35 guidance makes clear, the responsibility for correct status determination now sits firmly with the end client, not the contractor. An employee misclassification can trigger backdated PAYE, National Insurance, interest, and fines up to 100% of unpaid taxes. For recruitment agencies that supply contractors to end clients, that liability runs up the supply chain.
The EOR route comes in meaningfully cheaper than both alternatives once you factor in the full picture. The EOR option removes the compliance risk premium and management overhead that freelancers carry. And compared to a UK direct hire, the savings are substantial. This is the core EOR benefit for agencies: you get the commitment and continuity of an employee at a cost that works with agency economics. If you're interested in exploring Legends EORs salary benchmarking tool, do so below.
Select role and country to explore salary insights.
Agency growth is driven by client wins. When a new brief comes in, the clock starts immediately. Clients don't wait while you run a three-month hiring process for a dedicated resource.
EORs solve for this directly. Because the EOR already has the legal and payroll infrastructure in place in the target country, onboarding can happen in 48 to 72 hours once a candidate is identified. There's no entity setup, no local bank account, no employment law research required. The EOR's team handles the employment contract, compliant with local labour law, issues it to the candidate, and gets them onto payroll.
Compare this to the alternatives:
For an agency that's just won a new paid social retainer and needs a dedicated account executive on the account within two weeks, the EOR route is the only one that actually fits the timeline.
Since the Off-Payroll Working Rules were extended to the private sector in April 2021, the compliance burden for agencies using contractors has grown substantially. The rules require medium and large businesses, and the supply chain around them, to assess each contractor's employment status and issue a Status Determination Statement. Getting this wrong is expensive.
HMRC can demand backdated income tax and National Insurance contributions going back years. For deliberate or careless non-compliance, fines can reach 100% of the unpaid tax. For agencies, the risk is particularly acute because the working patterns of long-term contractors often start to resemble employment. A contractor who attends your weekly team standups, works exclusively on your clients, uses your tools and systems, and operates under your day-to-day direction is likely inside IR35, whether or not the contract says otherwise.
An EOR removes this risk entirely. When you hire someone through an EOR, they are a compliant employee, not a contractor. There is no IR35 determination to make, no Status Determination Statement to issue, and no ambiguity about employment status. The EOR is the legal employer, takes on the payroll and tax obligations, and ensures everything is handled in accordance with the relevant local employment law.
For agencies that have relied heavily on a pool of semi-permanent freelancers, transitioning those relationships to EOR employment can be both a compliance fix and a way to formalise what is, in practice, an ongoing employment relationship.
One of the lesser-known advantages of the EOR model for agencies is what it does to the talent pool you can draw from. When you're not restricted to UK-based hires, the range and quality of candidates available to you change significantly.
South Africa has become a particularly strong source of marketing talent for UK agencies. Driving factors are a highly skilled English-speaking workforce, familiarity with UK business culture, deep platform expertise in the tools UK agencies use, and a time zone that enables real-time collaboration during standard UK working hours. The salary differential is also significant; competitive local salaries in South Africa translate to materially lower costs for a UK agency, without any reduction in the seniority or quality of hire.
The EOR makes all of this compliant and operationally straightforward. Rather than managing contractors across different jurisdictions, different tax frameworks, and different currency arrangements, you have employees, on proper contracts, receiving statutory benefits, integrated into your team, with all the administrative complexity handled by the EOR.
Freelancers, by definition, maintain multiple client relationships. They're skilled at context-switching, but their incentives are spread across whoever is currently paying them. When a better-paid project comes along, or when a client relationship deteriorates, a freelancer can exit quickly and professionally. That's their right, but it means the relationship lacks the depth and commitment that comes from employment.
EOR hires are your employees. They're on your communication platforms, embedded in your delivery processes, and attend your retrospectives and strategy sessions. They build institutional knowledge about your clients. They develop a professional identity as part of your agency rather than as an independent operator passing through. Over time, they become part of the culture you're building, not a service provider you're buying from.
This matters in agencies because client relationships are built on trust and consistency. Clients notice when the person managing their account changes every few months. They benefit from continuity, someone who understands their brand history, who knows what was tested six months ago, and who remembers the conversation they had at the last quarterly review. That kind of continuity is hard to build with freelancers.
For agencies unfamiliar with the EOR model, it's worth being clear about what it involves operationally.
You identify the candidate, either through your own networks, a recruitment process, or working with a provider that combines recruitment and EOR services. Once you've agreed on terms with the candidate, the EOR issues a locally compliant employment contract. The candidate becomes an employee of the EOR, not of your agency, but they work for you entirely. You manage their day-to-day tasks, their performance, their priorities, and their career development.
The EOR handles everything else: running payroll in the local currency, filing the relevant statutory returns, administering leave and benefits, managing any HR processes that arise, and staying across changes to local employment law. You receive a single monthly invoice in GBP (or your preferred currency), covering the employee's salary, statutory deductions, and the EOR service fee.
The Legends EOR is unique as they offer more than the usual EOR benefits. Legends EOR also offers recruitment benefits, as they will find talent for you. Additionally, Legends EOR offers an HR service, an office space for your employees in Cape Town, South Africa, and IT support if you choose this additional benefit.
The digital marketing agencies that scale well aren't the ones with the biggest offices or the most expensive contractor rosters. They're the ones that build committed, stable teams around client delivery, and do it in a way that works commercially. An EOR gives you the infrastructure to do that internationally. You get full-time employees, not freelancers. You get compliance without entity overhead. You get speed to hire that matches how agencies actually win and resource business. And you get access to a global talent pool that changes the economics of what you can afford to hire.
Legends EOR specialises in helping UK and international agencies build and manage remote teams in South Africa. If you're thinking about your next hire, or want to understand whether your current contractor arrangements carry IR35 risk, speak to the team at Legends EOR.
