Great talent is everywhere. And with a seismic shift to remote working, many companies are looking beyond borders to hire the top-tier talent they need. When recruitment, hiring, and onboarding can happen from any corner of the globe, the world is your oyster. One popular outsourcing destination is India — offering a large pool of highly skilled professionals in one of the fastest-growing economies in the world.
But how do you even start hiring from India if you're not based there yourself? An employer of record (EOR) can be ideal for companies looking to hire, manage, and pay talent around the world without the legal and administrative hassles that usually come with it. An EOR comes well-versed in local employment laws and regulations of any country you could want to hire from, making it possible to build out distributed teams quickly and compliantly while focusing on the important stuff: growing your presence in India.
For example, did you know that there is no statutory minimum wage for organizations in the private sector in India? If this is news to you, take this as your sign to continue reading to learn more about how an EOR solutions provider can help you legally expand your global reach and ensure crucial laws aren’t overlooked.
This article will walk you through the reasons, processes, and advantages of hiring employees in India through an EOR.
Why Hire Talent in India?
Rapid Growth
India is the fastest-developing country in the world with a growing economy and a wealth of highly educated individuals. Home to many technology professionals, the Indian market is an excellent option for companies looking to go global and expand into Asia.
In fact, according to a report in the India Times, the country remains the favourite destination for global outsourcing among Fortune 500 companies. This is particularly true of tech talent - India houses a well-established IT infrastructure and produces millions of graduates with degrees focused in the fields of Science, Technology, Engineering, and Math (STEM).
What’s more, onboarding remote, globally distributed teams is seamless with India-based talent. Why? India is widely known as one of the largest English-speaking populations in the world, which means for North American companies going into the market, the language barrier is virtually non-existent.
Plus, you’ll benefit from a time zone that is complementary for team members who live all over the world, from Central Europe to New Zealand and more. Need more convincing?
India Offers a Fresh Perspective
India’s vibrant culture promotes understanding, communication, and adaptability. By hiring employees in India, companies promote seamless business interactions, increased customer satisfaction, and a more positive company culture. Additionally, employees in India offer new perspectives that can enrich creative tasks and team problem-solving abilities. That’s a great thing for innovation. India is Cost-Effective
Another significant factor to consider is the cost of hiring employees in India. Salaries in the country remain well below US and Canadian averages, at about $428.49 USD per month. Because the cost of hiring employees in India is much lower than hiring employees in Europe, the United States, and Canada, you’ll be able to save money without sacrificing talent.
How Can I Legally Hire an Employee in India?
To hire new employees in India, your business must have a local legal entity. The process of establishing a local entity can be a legal nightmare and may only be worthwhile if you are going to set up long-term operations in the country.
Local Labor Laws and More
This is where EORs come in handy. An EOR acts as a broker for hiring talent outside of your home country. An EOR will already have an entity set up and the legal framework in place to do the hiring for you. This gives you more time to focus on managing relationships with your employees and growing your business.
Going through an EOR is a simple way to hire talent in India without all the legal hassle. For help navigating Indian labour laws and more, contact Borderless today.
What Does an EOR Do?
EORs take care of the legal aspects of international recruiting while you manage your employees. The legal frameworks for hiring in India can be quite different from those in the US and Canada; EORs handle worker visas and work permits, employment contracts, payroll, local compliance, termination, and any other HR services.
To learn more, check out everything there is to know about EORs.
Employment Contracts and Documentation
An EOR will handle the tedious administration work involved in preparing and collecting documentation as a legal employer. This includes employment offers, signed contracts, banking information, and even a written employment contract, among others.
Employee Insurance and Benefits
When the world is your competition, it pays to incentivize new and existing hires with attractive global benefits like medical, dental, vision care, life insurance, and retirement savings plans. A comprehensive EOR will have those kinds of employee benefits built into its service offering.
Vacation and Public Holidays
India has three national holidays for which employers are obligated to observe for both short-term and full-time employees.
These include:
- January 26: Republic Day
- August 15: Independence Day
- October 2: Gandhi Jayanti
However, it’s not unified across the country. India is home to 28 states and eight union territories, so entitlement to vacation and public holidays varies depending on where employees are domestically located. India has an extensive list of Public and Government holidays, ranging from religious festivals to birthdays of historically significant individuals, as well as days commemorating the foundation of different states.
Festivals also form an integral part of Indian culture, varying from state to state and from city to city, each one practicing its own set of customs and traditions. Preference for time off may not be mandatory under the country’s employment laws. An EOR can help you determine which holidays your employees are legally entitled to by state.
Taxes
Employers in India pay a range of taxes in addition to social security contributions, both of which are calculated based on the employee’s salary. This includes the government-managed retirement savings plan known as the Provident Fund and health insurance.
Individual income tax ranges from 5% to 30% and is calculated progressively. India's income comprises two regimes, the New Personal Tax Regime (NPTR) and the old regime, giving taxpayers the option to choose either one.
Understanding the tax laws in India can be a long and complicated process but it is necessary to ensure you are paying employees compliantly and abiding by employment laws specific to the country. An EOR is here to handle the logistics and ensure that payroll is processed properly and per the regulations in your country of operation.
What Are Your Responsibilities?
While an EOR handles matters relating to legal and HR processes, other employment aspects remain under the purview of the employer. You’ll still need to take care of your remote, global staff in the same way you would local hires. That means search and recruitment, company onboarding, training, management, day-to-day communications, assessing local labour laws, progress tracking, and so on.
Although the relationship with the employee won’t be all that different through an EOR, you’ll need to be clear with your staff on the legalities of their contracts. Of course, retention is also up to you. It’s important to consider how you help your staff grow and succeed in their new roles at your organization.
What Are the Advantages of Going Through an EOR in India?
Using an EOR to hire talent in India will save you time, money, and risk exposure.
Setting up an entity for hiring in India is time-consuming, and frankly, can be a huge headache. Because EORs are already set up to hire employees in foreign countries, it is often faster and easier to start hiring right away with them. In fact, the process isn’t that much different from hiring locally.
Working with an EOR can save you money, as the set-up and HR costs of hiring international talent alone can be quite high. You will also be paying lower salaries than you would be in the US and Canada, so you’re bound to see some positive impact on your bottom line.
Most importantly though, you’ll be mitigating the risks associated with non-compliance. Because EORs have extensive experience in navigating complex local HR policies for remote work in India, you won’t have to worry about any issues arising from improper hiring practices.
How Much Does an Employer of Record in India Cost?
Hiring an Employer of Record to manage your remote Indian team can cost anywhere between a couple of hundred dollars to a couple thousand, depending on the scope of services you need and which provider you choose.
It’s important to note that while investing in an EOR service can be an additional expense for your company, it is still a much more economical option than expanding internationally through permanent establishments. Traditional expansion is an expensive and often cumbersome process, fraught with legal considerations and regulatory hoops to jump through. An EOR service will handle the administrative burden for you, making your grand entrance into the Indian market worth every penny.
How Do I Choose the Right EOR for Me?
Here are four things to consider before selecting an employer of record:
1. Local Experience
Does the EOR have experience hiring in India? As discussed, one of the biggest advantages of hiring through an EOR is the assurance of compliance. This requires a lot of past experience, so check the EOR’s track record in the country.
2. Service Scale
Do you need someone who offers a full suite of services? If you want happy employees that you can retain in the long run, then you may need to offer them benefits like insurance and other supplementary benefits. Some EORs have systems in place for this, but others may not. Also, keep an eye out for EORs that offer consulting services to optimize your global hiring practices.
3. Data and Systems Security
Protecting intellectual property in a remote working environment is critical. Ensure your vendor of choice has a specific agreement outlining the ways in which they plan to keep your sensitive information safe and secure. In the same way, you develop safety and security policies and procedures to ensure your employee systems remain secure, ensure your vendors are also doing their due diligence, too.
4. Collaboration
Ensure your vendor’s approach to communication and collaboration with its clients aligns with your organization. Do you need a reliable point of contact person that you can reach at a moment's notice? Perhaps you’re an asynchronous aficionado who only needs access to a Slack channel to view vendor updates and ask questions at a time that suits you best. Whatever the communication style, ensure your vendor can meet your needs and have an honest discussion about what level of account management they can provide. Many EOR service providers only provide light touch round-robin support, which may not be enough for your organization and its unique needs.
EOR Service Providers in India
So, now that you know a little bit more about the benefits of using an EOR to hire in India, you’re ready to start searching for an official partner. Borderless is proud to be a trusted employer of record in India. We can help you establish a business entity in the country – giving you access to a massive talent pool without the headaches that come with traditional global expansion.
Borderless: The Employer of Record your Company Needs
Unlike other EOR solution providers, Borderless doesn’t charge any deposits or setup fees for your international employees or contractors. The Borderless advantage means you:
- Pay no upfront costs;
- Experience no hidden costs;
- Benefit from a transparent cost structure
Plus, you receive a dedicated account manager who will get to know the ins and outs of your organization, its goals and preferred communication style so all of the support you need is just a call or click away.
Speak with our team today and see how we can help you quickly and easily hire, onboard, pay and retain the talent your organization needs.
Disclaimer: Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
