Hire in India

How to Hire in India

Here's a roadmap to guide you with global hiring in India:

• Showcase your company culture, career growth opportunities, and competitive compensation packages to attract top talent in India's competitive market.
• Utilize a mix of online job boards like Indeed, Naukri, etc. 
• Contact local recruitment agencies or search for candidates on networking platforms like LinkedIn to hire talent in India.  
• Consider the candidate's cultural fit with your team.

Moving on, let’s explore the best ways on how to hire employees in India: 

How to hire employees by setting up a local entity

• Best for companies with a long-term commitment and plan to hire from India.
• Process: Establishing a branch office, liaison office, or subsidiary allows direct control over HR processes. However, this involves legal and tax complexities and can be a lengthy bureaucratic process.
• Benefits: Offers complete control over hiring, payroll, and employee management.

How to hire employees via EOR

• Best for: Companies seeking a faster and more streamlined hiring experience, especially for fewer employees.
• Process: Partner with an EOR (employer-of-record) like Skuad, who acts as the legal employer for your Indian staff. The EOR handles payroll, taxes, and compliance, reducing your administrative burden.
• Benefits: Faster setup compared to a local entity, reduced administrative work, and lower initial investment.

How to hire contractors through AOR

• Best for: Short-term projects or specific needs where you want to hire remote workers in India.
• Process: Partner with an AOR (agent-of-record) like Skuad, which helps you find and manage independent contractors in India. The AOR handles aspects like payments and basic compliance, but you're responsible for managing the working relationship.
• Benefits: It is the most flexible option, ideal for short-term needs.

Eventually, the best way to hire employees in India depends on your specific needs and goals. Here are some factors to consider

Cost of Hiring in India

Various reports have attempted to define the average cost per hire in India (at INR 25,500 a month), but cost calculations to hire in India involve multiple expenses and vary per industry and job role: 

• Recruitment: Job board postings, recruitment agency fees, travel and accommodation for interviews
• Pre-employment steps: Aptitude tests or skills assessments, medical examinations (if required)
• Salary and benefits: Base salary, performance bonuses (if applicable), social security contributions, provident fund contributions, group health insurance
• Onboarding process: Training and development programs, relocation assistance (if applicable), office supplies and equipment

More recently, companies have been hiring remote workers in India to reduce the overall cost. 

Furthermore, the table compares the cost of hiring an employee in India based on two main approaches: setting up a local entity vs. EOR/AOR.

A Brief About Employment Laws in India

The constitutional power in India to legislate on HR & labor activities is shared between central and state governments. 

Previously scattered across numerous laws, 29 central labor legislations are being streamlined into four comprehensive codes:

• Code on Wages, 2019
  It ensures the right to minimum wages for all workers, including those in the unorganized sector. The law requires you to pay wages on time, either by cash, cheque, or digital mode. It prohibits discrimination in wages and ensures equal wages for equal work. 
• Code on Social Security, 2020
  As the name suggests, it covers the laws related to social security benefits like provident fund, maternity benefits, gratuity, etc. It expands social security coverage to gig and platform workers, as well as unorganized sector workers.
• Code on Occupational Safety, Health and Working Conditions, 2020
  It covers laws related to workplace safety, health, and working conditions. Applies to all establishments with 10 or more workers, and some provisions to smaller establishments as well. Under this code, you must provide welfare facilities like drinking water, first-aid, and crèches to employees.
• Industrial Relations Code, 2020
  It consolidates 3 existing laws related to trade unions, industrial disputes, and standing orders. This code requires prior notice and negotiation before retrenchment, layoff, or closure for establishments with 300+ workers. It also simplifies the registration process for trade unions.

These new codes overall aim to simplify compliance, introduce protections for new types of workers (like platform workers), and offer benefits for both employers and employees. However, multiple state legislations remain in force for specific sectors and industries. 

Can a Foreign Company Hire Employees in India?

Yes, the Indian market is highly receptive to multinational companies. A foreign company can hire employees in India, but it is not as straightforward as hiring in their home country. 

The biggest hurdles are staying updated with evolving labor laws in India, deciding on operational setups, tapping into a highly competitive labor market, and adapting to local work culture.

Challenges of Hiring in India

Let’s explore three challenges of hiring employees in India: 

1. Intense hiring competition

• International companies diving into India's job market encounter a tough battleground for talent. The competition is fierce, with everyone vying for the best minds out there. 
• Standing out amid the crowd becomes a real struggle. Crafting a unique image as an employer that clicks with Indian job seekers is no walk in the park. 
• And then there's the challenge of offering perks and pay that really resonate with locals. Plus, nurturing an environment where career growth feels like a promise rather than a pipe dream is quite the balancing act.

2. Diverse employment laws

• Despite the new labor codes in India, the national government and individual states legislate on labor rights, along with variations by industry. 
• Conducting thorough background checks on potential candidates to hire in India can be limited due to the non-availability of data. 
• Employee misclassification risks are due to easy access to remote workers and independent contract services. 
• You may need to adapt hiring practices and employment contracts to align with Indian norms within the legal framework.

2. Payroll complications

• India enforces various direct taxes and deductions on employee salaries, including income tax, provident fund contributions, and education cess. Understanding these calculations and ensuring timely deposits with the relevant authorities is difficult.
• Some payroll components, like minimum wage and professional tax, can vary by state or industry, adding another layer of complexity for companies operating across multiple locations in India.

• Integrating Indian payroll data with your company's global payroll system to ensure consistent reporting can be challenging.

3. Competitive talent landscape

• The Indian workforce could experience a 22% churn in the next five years. 
• While you can benefit by accessing a wider talent pool with the latest skill sets, you must design training programs to address the expanding skill gaps. 
• Moreover, with nearly 75% talent scarcity globally, hiring remote employees in India will require a targeted approach. 

Meanwhile, timely addressing the hiring challenges can avoid labor law violations, employee legal actions, and reputational damage. 

Moreover, you can establish standardized employment practices that comply with regulations in India using an employer-of-record solution like Skuad. It ensures fair treatment, higher morale, productivity, and lower employee turnover rates. 

Hire in India with Skuad

Building a global team shouldn't be stalled by complex legalities. Skuad empowers organizations to hire employees in India and manage teams in over 160 other countries. 

Skuad's comprehensive platform covers everything from payroll and benefits to tax filings and local contracts, ensuring a smooth and compliant hiring experience for you and your new Indian recruits. 

Leveraging Skuad's EOR/AOR solutions, you can tap into the vast Indian talent pool and assemble a world-class team without the burden of local entity setup. 

Sign up for your free demo and embrace the possibilities of a global workforce with Skuad. 

FAQs

Q1. How can I find an employee in India?

A1. You can leverage nearly 10% (5 million workers) of India’s vast talent pool, employed in the organized sector through online job boards and local recruitment agencies. Conducting university-level campus recruitment drives helps attract new educated talent into the workforce. You can also explore professional networking platforms like LinkedIn to hire talent in India. 

Q2. How much does it cost to hire an employee in India?

A2. The cost of hiring an employee in India varies depending on factors like recruitment methods, salary and benefits, and the chosen approach (setting up a local entity vs EOR/AOR). Various reports suggest anything above INR 50,000 as recruitment costs, with additional ongoing expenses for salary, social security contributions, and potentially EOR/AOR service fees.

Q3. What is the average time to hire in India?

A3. The average time it takes to hire experienced employees in India depends on the notice period. While there is no fixed term, companies can generally have 15 days to even six months of notice period after filing termination papers. For fresh recruits, the total time to hire depends on the company's recruitment policy. 

Q4. How can I legally hire an employee in India?

A4. The common ways to hire an employee legally in India include setting up a local entity and taking full employee responsibility or partnering with an EOR like Skuad to outsource HR compliance for a fee. You can consider AOR solutions like Skuad to hire independent contractors for short-term needs.