Hire Employees in India

Hire Employees in India

Hire Employees in India? – An Ultimate Guide

India offers excellent opportunities to hire remote employees for global businesses, with many companies already establishing their offshore centers in major cities. With a population of over 1.4 billion, the country boasts a vast talent pool, attracting the idea to hire employees in India. Each year, around 5.8 million graduates join the workforce, providing a substantial supply of skilled professionals.

Being the second largest English-speaking country worldwide ensures seamless communication with international partners and customers. India’s impressive tech talent is evident from its home to over 1,70,000 IT companies and its recognition as the top destination for offshore IT services. These advantageous factors position India as a prime destination for accessing a diverse and proficient workforce, strengthening global operations.

Overview of India

Capital: New Delhi
Currency: Indian rupee (₹) (INR)
Languages: Hindi, English
Population: 1428.63 Million (1st in world population)
Payroll frequency: Monthly
Timezone: GMT+5:30
Cost of living rank: 191st out of 197
GDP per capita: $2601

Insights into top talent trends in India

EY’s Future of Pay Report 2023 reveals notable talent trends in India which is promising and surprising for global organizations.

  1. India has a large working-age population, with engineering and technology undergraduates demonstrating a 55% employability rating. Computer application graduates have around 29% employability.
  2. The growing Indian economy intensifies talent competition. Firms focus on branding, benefits, and retention to attract high-quality employees.
  3. Gig economy: In 2020-21, 76 lakhs (7.6 million) workers engaged in gig work.
  4. By 2029-30, the gig workforce is expected to reach 2.4 crore (24 million) workers.
  5. Gig work empowers workers with flexible scheduling and structuring of their days.
  6. Rising freelancing apps and job crises make gig jobs more desirable for Millennials.
  7. Only 38% of employers believe gig workers will significantly grow in their organizations in the next two to three years.

Remote hiring India trends

The remote work culture has been changed and strongly adapted by the major talent pool across India in recent years. On the grounds of SCIKEY Tech Talent Outlook Studies, the remote hiring data are as follows:

  1. 82% of individuals acknowledge a preference for remote work over office-based work.
  2. 64% of individuals report increased productivity while working from home and a reduced sense of stress.
  3. Over 67% of companies acknowledge that finding skilled individuals willing to work exclusively in office settings is becoming progressively challenging.
  4. Within the next two years, 74% of executives plan to harness crowdsourced talent for certain aspects of their business operations.
  5. 81% of executives report utilizing digital ecosystems to source talent from remote locations.
  6. The trend of freelancing is poised to experience ongoing rapid growth.
  7. The workforce will comprise a blend of remote, independent, and permanent employees.
  8. Distributed teams are now common for companies serving clients across multiple locations. They prioritize a diverse talent pool over cost-efficiency, valuing strong skills over low expenses.

Employability percentage of Indian talent

As per the India Skills Report 2023 by WheeBox, the employability of Indian talent is improved impressively from 2017 to 2023. The employability rate was 40.44% in 2017, and it reached 50.3% in 2023.

Employability as per academic domain

Here is the data showing the percentage of employable talent in India for the year 2023, categorized by academic streams, as per the same report. The highest employable stream is Bachelor of Commerce, while the lowest is Polytechnic.

Academic stream Employability
Bachelor of Technology or Engineering (B.Tech/B.E) 57.44%
Master of Business Administration (MBA) 60.1%
Bachelor of Arts (B.Arts) 49.2%
Bachelor of Commerce (B.Com) 60.62%
Bachelor of Science (B.Sc) 37.69%
Master of Computer Applications (MCA) 30.64%
Industrial Training Institute (ITI) 34.2%
Polytechnic 27.61%
Bachelor of Pharmacy (B.Pharma) 57.51%

Engineering courses wise employability

Given the high demand for engineering courses in the global business landscape, let’s analyze the disciplines and employability rates as follows:

Engineering discipline Employability
Information Technology (IT) 65.02%
Computer Science (CS) 62.67%
Engineering and Communication Engineering (ECE) 60.21%
Electrical Engineering (EE) 58.00%
Mechanical Engineering (ME) 43.57%
Civil Engineering (CE) 34.41%

Top 10 high-paying jobs and salary data

Below is the list of the top 10 high-paying jobs and the average annual salary in India, as provided by Glassdoor.com. Employers can find valuable insights into the job market rates for professionals in the country here.

Job Title Avg. Salary/Yr. (in INR) Avg. Salary/Yr. (in USD)
Project Manager 2,200,000 26,400
AI/ML Engineer 1,230,000 14,760
Data Scientist 1,432,500 17190
Software Engineer 1,140,000 13,680
Product Manager 2,200,000 26,400
Marketing Manager 1,375,000 16,500
Solution Architect 2,800,000 33,600
Data Engineer 1,100,000 13,200
Cloud Architect 2,193,650 26,324
Chartered Accountant 1,106,760 13,281

Employment Laws in India- Important Considerations

1. The Industrial Disputes Act, 1947

The Industrial Disputes Act oversees solving issues like layoffs, retrenchments, and dismissals. It sets rules for resolving disputes, using arbitration, and fixing grievances.

2. The Employees’ Provident Funds and Miscellaneous Provisions Act, 1952

  • Consider these three payroll deductions for Indian employees: Employees’ Provident Fund (EPF), Employees’ Deposit Linked Insurance Scheme, and Employees’ Pension Scheme.
  • 12% of salary designated for EPF, serving as post-retirement pension.
  • The law mandates equal contributions from both employer and employee.
  • Employer’s EPF contribution: 3.67% to EPF, 8.33% to EPS.

3. The Employees’ State Insurance Act, 1948

The 1948 Employees’ State Insurance Act is vital in India, offering medical and cash benefits to workers and dependents. It includes the Employees’ State Insurance (ESI) scheme, providing medical aid and financial support for sickness, maternity, and job-related injuries.

4. The Payment of Gratuity Act, 1972

This act is applicable to firms with ten or more employees. It grants workers 15 days‘ wages per year of service, capped at Rs. 10,00,000.00. Eligibility requires five years of service, and employees can claim it upon resigning.

5. A special payment of bonus act 1965 in India

  • The Payment of Bonus Act 1965 is a key Indian labor law governing employee bonuses.
  • This applies where 20+ employees are present any day in a year (excluding some miscellaneous workers).
  • Requires bonus payment of 8.33% of salary or Rs. 100, whichever is greater.

6. The Maternity Benefit Act, 1961

  • The maternity act protects the rights of female employees during pregnancy and childbirth.
  • Provides 26 weeks of paid maternity leave with job security.
  • Offers unpaid leave and nursing breaks as necessary.
  • 12-week maternity leave for mothers of two kids and those adopting under 3 months.

7. The Minimum Wages Act, 1948

The Minimum Wages Act establishes the lowest pay employers must provide to workers in specific jobs. Central and state governments update rates regularly for fair compensation.

8. The Contract labour (Regulation and Abolition) Act, 1970

This act governs contract labor, ensuring fair wages, and benefits, and imposing obligations on engaging employers.

9. The Equal Remuneration Act, 1976

This act guarantees pay equality between genders for similar work, forbidding wage and job discrimination to advance workplace gender equality. Know more

10. The Factories Act, 1948

The Factories Act oversees factory working conditions, including hours, overtime, sanitation, and worker welfare.

11. The Shops and Establishments Act

Shops and Establishments Acts in India regulate work hours, holidays, and conditions for employees in various businesses.

Know more on Employment Laws and Mandatory Benefits in India

Why do companies hire from India?

A strong technical talent pool

India has a vast pool of skilled IT professionals, including engineers and developers, proficient in software development, AI, data analytics, and cloud computing.
The Indian education system prioritizes STEM fields, yielding a steady flow of qualified graduates annually.

Multilingual and multicultural skills

Linguistically diverse nation, with a multitude of languages spoken across different regions.
Enable companies to cater to specific regional markets and offer customer support in multiple languages.

Competitive cost structure

The cost of living and labor costs are relatively lower compared to many Western countries.
Access to top-notch talent without compromising on quality, while also optimizing operational expenses.

Respect for hierarchy and authority

Indian work culture emphasizes respect for hierarchy and authority figures, which contributes to a disciplined and organized work environment.
Helps maintain clear lines of communication and ensure efficient decision-making processes within companies.

Related read: Top 9 Reasons to Hire Employees from India

3 Best ways to hire employees in India

There are three optimal approaches for hiring employees in India for global companies. The choice of which method to pursue depends on various factors. These include long-term business plans, budget, time availability, required workforce type, and the number of employees.

a) Establish an entity in India

Establishing an entity in India involves creating a legal presence for your business within the country. This provides a solid foundation for conducting operations, hiring local talent, and engaging with the Indian market. By setting up a formal entity, you can navigate local regulations, and build stronger relationships with clients and partners. This practice is feasible if the business is having long-term growth plans in India. If companies seek short-term, small virtual teams in India without long-term plans, this strategy is not practical.

b) Partnering with Employer of Record India

Partnering with an Employer of Record in India offers a strategic and smart solution for companies. An EOR serves as a local employer for your staff, handling payroll, benefits, compliance, and administrative tasks. This approach streamlines market entry, minimizes legal complexities, and accelerates hiring processes. By collaborating with an EOR in India, businesses can swiftly establish a compliant presence and access local talent. Certainly, this will enable companies to focus on their core operations while the EOR handles crucial employment responsibilities.

c) Hiring independent contractors in India

Engaging with independent contractors in India offers a flexible and efficient approach to accessing specialized skills and services. This method allows businesses to tap into the expertise of professionals without the commitments associated with traditional employment. Independent contractors provide a versatile solution for short-term projects or specific tasks, enabling companies to optimize resource allocation.

Yet, companies must focus on the risk of misclassifying contractors. Such misclassification can result in issues like backpay, penalties, legal fines, damage to reputation, and other consequences.

Cost to hire employees in India

The hiring expenses in India encompass more than just the employee’s salary and bonuses. Various other direct and indirect costs are factored into the overall calculation of this hiring cost. The cost includes (but is not limited to):

  1. Registration fees for setting up an Indian entity
  2. Costs related to employment agencies if outsourcing is chosen
  3. Expenses for arranging or attending hiring events
  4. Advertisement expenditures for job postings
  5. Travel costs for hiring managers visiting India
  6. Recruiter’s salary and time
  7. Candidate’s salary and bonus/incentive
  8. Relocation fees for new employees
  9. Fees for third-party background verification and reference checks

Global Squirrels: Empowering companies in the Indian talent hunt

Discover the dynamic partnership that Global Squirrels offers to revolutionize your employee recruitment journey in India. Our innovative AI-powered platform ensures seamless access to the finest talent, streamlining your expansion plans.

Are you prepared to initiate this game-changing hiring strategy in India?

Let’s connect and explore endless possibilities together!