Important Steps When Hiring in India

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India has the second-largest labor force in the world, and it’s expected to reach the number one spot by 2027, taking over from China. Due to the increasing skills developments in India’s educational system, it has shed its reputation as a low-cost, outsourcing destination. You can find great talent in all domains of the labor force in India, which is one of the main reasons why so many businesses are expanding to India. Although the most prominent trend is in tech, it is not limited to that sector.

If you want to tap into the Indian labor force, there are a few important steps you can take.

Identify Your Business and Hiring Needs

Before you go through resumes and applicant profiles, it’s important to identify your business and hiring needs. The first thing you need to determine is whether you only want to hire from India or if you want to establish a business in India. If you are only looking to hire from the Indian workforce and get them the requisite visas for your country, the compensation and benefits might be closer to the labor force you already have access to (locally). Even if there is a difference, it might be negated when you go through the extra steps of hiring in another country.

If you are hiring remote workers, the process might be significantly simpler because you can hire your remote employees without establishing a local entity by using an employer of record (EOR). But if you are establishing a business in India, you will need to take several important steps before you hire your first employee in the country. Whether you are seeking to establish an Employer of Record or are interested in setting up a legal entity in India, Aadmi can support your business through all expansion processes.

Once you have established that, you need to identify your hiring needs (short-term and long-term). If you are hiring for a project, you may need a temporary workforce. But if you plan to put down roots in the local market, you may have to approach hiring differently.

Understand The Labor Laws

India has a set of four labor codes, which consolidate over forty labor laws. These codes are associated with wages, social security, industrial relations, and safety and working conditions. Understanding these laws and codes is crucial before you start hiring so you do not breach compliance. You may bypass this process by hiring through an Employer of Record or working with a local hiring partner. But it’s still a good idea to have your hiring and work practices match the labor laws so that you are legally compliant.

Familiarize Yourself with The Work Culture

Work culture is different in every country, and India is no exception. You may see a significant divide between relatively young graduates comprising an educated workforce, and a blue-collar labor force in India. The former might be more flexible and will easily adapt to your work culture, but the latter may need more guidance and assistance to ensure that they match your vision and corporate culture. This is another area where partners familiar with the country might come in handy. Aadmi has a network of in-country partners in India who can guide your approach.

Learn About the Benefits and Compensation Trends

If you want to hire the best and brightest, you should be ready to offer above-market compensation and benefits. However, the difference shouldn’t be so large that you alienate your B2B peers and disrupt the local market. Understanding the country’s current benefits and compensation trends can help you take the right approach in this regard. The Indian workforce is also rapidly adapting to remote/hybrid working conditions, and it’s one benefit you can offer prospective employees.

Register Your Business Entity

Once you know whom you want to hire, why you want to hire them, and how much you would likely spend on your workforce, it’s time to register your business in India. That can be a lengthy and complex process depending on your understanding of the local system. In addition to obtaining important identification numbers and certificates, including Director Identification Number (DIN), Permanent Account Number (PAN), Digital Signature Certificate (DSC), and company seal, you will also need to register for VAT and have adequate medical insurance. Like any other country, you need to choose the right business entity that matches your business needs and gives you the best chance to hire the right people in India.

Choose The Right Labor Pool

India is massive, with numerous ethnicities and languages. There are significant cultural divides, differences in compensation expectations, and differences in the quality of the workforce in India. When you are hiring in India, you need to keep all these differences in mind to ensure that you have the best workforce at an optimal price. You may have a lot of flexibility in this regard if you have a full or partial remote working model. But if you are setting up a manufacturing plant in India, you must choose the region carefully. And the right labor pool is not the only important variable in this regard.

Initiate The Hiring Process

The actual hiring process can differ greatly in time, effort, and cost based on how you approach it. You can outsource the entire process or part of the process to foreign expansion partners specializing in the region such as Aadmi, who can help your business engage the right talent and ease the onboarding experience. Or you can control the entire process yourself and if you want to ensure the best results in this part of the process, familiarity with the local work and job-seeking culture is quite important.

Interviews, Job Offers, and Onboarding

Once you have adequate job applications, you can start sorting and shortlisting the candidates. If you are using screening software, make sure it’s calibrated to local parameters and keywords. You can conduct job interviews with the shortlisted candidates. Usually, language is not an issue in India since most of the population speaks English, but in some instances, you may need a translator or a local individual present in the hiring process. You can make the job offer to the candidates you like and initiate the onboarding process.

The hiring process in India can be time and resource-consuming, especially if you are doing it on your own without a trusted expansion partner, so schedule a free consultation with Aadmi today.

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