India is a large country with a workforce of over 400 million. Hiring in India is ideal for finding professional and hardworking employees. The country has a fast-growing economy that provides highly skilled workers in technology, IT, finances, healthcare, etc.
Before hiring in India, you must know local laws and employee expectations. Below we will guide you through the steps you should be mindful of and summarize important labor laws.
Hiring in India: Key Points to Consider
It is essential to understand local corporate culture and the work environment that employees in India expect. This kind of in-depth knowledge can reduce future problems and simplify your work space.
Loyalty is both valued and rewarded in Indian business culture. It is common for employers to increase salaries by 10% or more after one year to encourage retention. Additionally, employees expect to receive bonuses outside of their salary.
These rewards, or extra allowances, often cover rent, transportation, children’s education, etc. A job offer that includes bonuses will be more attractive to potential Indian employees.
Helpful market-research studies on employment trends have also shown that Indian youth are often quick to switch jobs. Typically, this could be due to low starting wages or a desire for better work experiences. A positive work environment that promotes growth and a diversity of skills will likely increase employee commitment.
The Cost of Hiring In India
The estimated cost of hiring workers in India for employer is 25500 Indian rupees. This cost considers employee salary and other expenses during the process. These could be things like recruitment consultant costs, recruiting website fees, and background checking fees.
The Basics of Indian Labor Law That You Need to Know First
The average workweek in India is 40-45 hours, though overtime is common. Employers need to compensate overtime at 200% of regular wages.
While the state covers a basic level of health care, many employers in India also offer additional medical care benefits to their employees. Employees in India should receive 12 days of paid sick leave annually. During sick leave they should also receive 70% of their salary.
Any employee who has worked al least three months for a company will receive 15 paid vacation days per year.
Maternity leave is 26 weeks in India; mothers during this time leave must receive 100% of their salary.
Both employees and employers must contribute 12% of their salary towards social security. Not making these payments will result in costly fines, usually for the employer.
How to Hire People in India
To hire in India, you first need to establish a legal structure that would allow you to be an employer. You could achieve this via one of two methods:
- You can set up a branch or local entity of your company. This way may require a lot of forethought and extra time. The permits and permissions necessary for this process could take a while to complete. While you go through these procedures, you also risk delaying your operations.
- Alternately, you can partner with a global Employer of Record (EOR) or PEO. This option would mean you can hire workers in India quickly and with the assurance of total legal compliance.
To find professional talent in India, some of the more commonly used recruiting sites are Naukri, Freshers alive, and Indeed.
A global PEO in India or EOR services can assist you by streamlining recruitment. An outsourced payroll provider in India can boost efficiency and reduce costs. They typically offer recruitment services that cover all aspects of hiring with just one point of contact. Furthermore, long-term HR outsourcing solutions help to boost structural efficiency.
Work contracts in India must include all details of compensation and benefits and comply with local industry laws. Although much of the Indian population is fluent in English, many would require negotiation in Hindi or other regional languages.
Depending on the location of your company and the candidates chosen, you may need to hire a translator for clear and concise communication.
Hiring Remotely in India
Due in part to COVID-19 the popularity of working remotely has been on the rise. This trend seems to be continuing either due to necessity or convenience. A telling study conducted in 2022 revealed that 82% of respondents preferred working at home to going back to the office.
Indian workers have been noted for their flexibility and willingness to adapt to remote work. These characteristics make them ideal candidates if you are looking to hire remotely.
In order to hire remotely in India, you will still need to ensure legal compliance with local relevant regulations. This might mean still needing a separate local entity, or partnering with an EOR in India. Remote workers that are full-employees must also be paid in the local currency. They also still receive standard benefits in accordance with local laws.
How INS Global Can Help You Hire in India Easily and Efficiently
India’s teeming population boasts a vast talent pool of competent and skilled workers. INS Global can help you locate employees that match your requirements and align with your company’s vision of global expansion.
Our legal experts are well versed in the nuances of Indian labor laws. Their knowledge of local practices and business culture will keep you from making costly errors.
We offer both PEO and employer of record services in India, alongside a full range of HR services and payroll outsourcing. Our team of advisors can offer constant advice to guarantee that both you and your new employees are satisfied.