Introduction
India’s vast population of over 1.4 billion is becoming an attractive destination for international investors. Many booming industries are looking to expand their operations in the country. The Indian business landscape has been experiencing rapid growth since the government has made flexible laws for foreign companies to enter the local market.
As these new companies are entering the diversified Indian business market, they are facing challenges to manage and hire the workforce.
But navigating the complex landscape of establishing and running a business in India requires expertise.
The backbone of every business lies in its talented workforce.
But hiring, managing, and training the Indian workforce to work in coordination with foreign companies is a task.
Here is when Professional Employer Organization (PEO) and Employer of Record (EOR) play a vital role. The rapidly booming EOR service providers carry flexible solutions for foreign companies to expand their operations.
The EOR service providers in India are assisting companies to overcome the complexities of compliance, payroll benefits, training and hiring, insurance, and other employee benefits.
In an EOR partnership, the company signs an agreement with the client and the employee. The top EOR Indian companies have provisions to do e-signing of documents for a quicker onboarding process.
In modern-day Employers of Record (EOR), service providers have become invaluable partners of every foreign entity entering the Indian business market.
In this article, we will define the structure of EOR, common FAQs about EOR, and how to grow your business by joining hands with EOR service providers in India.
Decoding EOR: Understanding the concept of Employer of Record
An Employer of Record (EOR) is a third-party company that takes care of the administrative and legal responsibilities of the hired workforce on behalf of the client company. The EOR is a formal employer service provider for a contingent workforce. It serves as a legal employer of local employees hired by international companies.
An EOR handles all hiring, managing, payroll, employee benefits, HR-related tasks, and compliance, allowing companies to focus on their day-to-day operations.
The invaluable employee outsourcing services provided by EORs keep compliance with local labor laws. The EORs significantly assist companies in their internationalization.
An EOR service provider simplifies employment for foreign companies. They save time and money for companies expanding their operations in India. In the international scenario, employee hiring, management, taxes, and policies vary from country to country.
Any MNC cannot study these various country-specific regulations every time. To enter a new market, a company cannot spend its great resources only on employee management research.
Here comes the third party, the Employer of Record. It helps in reducing costs and saving time.
The EOR manages the employee benefits system efficiently. But how can businesses achieve that desirable revenue growth by joining hands with an EOR service provider in India? The answer lies in the innumerable benefits offered by top-notch EOR service providers.
If you have witnessed many medium-scale companies maximizing business growth, they have aligned their business goals with EORs wide range of services.
Multiple Services Offered by Employer of Record (EOR) Service Providers in India
- Drafting, exchanging, and signing a compliant employment agreement with the client company.
- Looking out for potential candidates for the desired position through multiple employment channels.
- Going through the pre-screening process, assessing candidates, selecting and hiring the most eligible through various in-depth assessments.
- Sending offer letters to chosen candidates and handling the complete onboarding procedure.
- Drafting an employment contract as a third-party employer for the client company for the chosen employee.
- EOR will process accurate payroll after deducting appropriate taxes and provide technical software to companies by keeping track of funds distribution.
- Further, EOR follows all statutory laws of the country and keeps the contract updated according to changes related to unions, insurance, and compensation.
- EOR will further take care of the promotion of the employees. It will arrange for a work visa, or work permits in case the employee needs to visit the headquarters of the client company.
- The EOR service provider will also be exclusively responsible for the termination of employees and settlement with the company.
EOR Service Providers in India VS Traditional Employment Agencies
The Employer of Record and staffing agencies operate in different ways. There is a common misconception that a client can use one of them.
Aligning with business objectives, both EOR and traditional employment agencies can be used simultaneously. But it’s important to understand what draws them apart from each other.
Below we have listed some differences between EOR service providers in India and traditional employment agencies.
Legal Employer
An EOR service provider becomes the legal employer of the foreign company. It handles all aspects of employment on behalf of the client, like hiring, payroll, insurance, employee benefits, etc.
In contrast with the defined structure of an EOR, a traditional employment agency acts as a middleman. It simply connects employers with potential candidates. The employment agency does not play any role as a legal employer. The main job of a staffing agency is to find the right fit for the business.
Hiring Process
An Employer of Record service provider typically practices a simplified hiring process. They take care of employment functions on behalf of the client company. These can be screening, recruiting, onboarding, training, and termination.
A traditional employment agency will exclusively provide details of the pool of candidates. The complete selection, hiring, and onboarding responsibility lies on the client’s shoulders.
Risk and Compliance
The EOR service providers provide legal and regulatory assistance to associated client companies like employment, compliance, and follow-ups with all labor laws, taxes, and HR tasks.
In the traditional employment system, the agency does not cater to all these risk and compliance responsibilities. They may not handle legal compliance matters to the same extent as an EOR.
Employee Benefits
EOR service providers offer employee benefits packages to client companies beforehand. It includes health insurance, retirement plans, leaves, work permits, visa application handling, etc.
In the case of traditional employment setup, the agencies generally do not provide employee benefits to any of the candidates as they are not the legal employer of the client.
Leading EOR Service Providers In India
Companies are looking to adopt a new global hiring approach.
The EORs use many automation tools, video interviewing, social media recruitment, and analytic recruitment methods. These digital tools simplify the hiring process.
The Employer of Record service providers are making international expansion and remote hiring a seamless procedure.
Here we are listing the top leading EOR service providers in India. The below-mentioned companies are selected, according to their industry experience, number of countries, number of clients, and adoption of digital HR tools.
MME
Having a broad spectrum of experience in its kitty, MME has established a top-notch position among leading EOR service providers in India. It has been a local EOR partner with many foreign companies. The company has its headquarters in the capital city of the country.
Many multinational and medium companies have been linked to the network of clients that MME has handled over the years. MME has a comprehensive infrastructure and extensive experience in providing EOR services to companies. Moreover, MME offers low-cost savings and faster EOR service operations in India to new clients and budding companies.
MME has handled Fortune 500 companies’ employee management processes in India. The team at MME has strongly showcased that PEO (Professional Employer Organization) and EOR are secret outsourcing tools to scale the global business faster.
With an experience of over three decades, MME has revolutionalized payroll and EOR management in India. The three-tier communication structure followed by the company has assisted employees of client companies at every step for seamless operations.
MME’s highly competent team follows the steps below to provide smooth EOR functionality in the domestic market.
- Onboard remote workforce for foreign companies
- Prepare and start the EOR operations within days
- Follow all necessary compliance and labor laws
- Execute monthly payroll and taxes on behalf of the client company
- Empower the workforce with software and engaging team-building support
- Provide continuous information about employee progress to headquarters
The MME team completely handles and executes the employment management. They make it easy for businesses to hire distributed talent in India.
Husys
A renowned name in PEO and EOR sector, Husys was established in 2002. It had the mission to help companies outsource their HR services. Over 21 years, Husys has catered to more than 5000 domestic and international companies with remarkable EOR services.
Husys is a leading HR technology and solutions that offer Employer of Record services in India to global clients. The software ApHusys is the cloud platform to track and manage employees. It brings outsourced HR operations to the fingertips of the client.
The company is also part of People 2.0, a global workforce deployment platform. It has integrated the platform’s expertise into its domestic workforce management while executing its EOR operations. The company has built a business culture among its EOR workforce that drives employee satisfaction and creates high performance.
The experienced team at Husys has helped many fortune-listed companies to build a successful global remote workforce. These companies have established businesses in India and overseas with much-needed flexibility provided by the team.
Husys has helped international companies to expand their operations in India while adhering to statutory labor laws and overcoming unwanted procedures. With Husys, foreign companies have legally hired employees without setting up a legal entity in more than 100+ countries worldwide.
PaySquare
Paysquare is India’s fastest-growing payroll management and Employer of Record service provider. The company headquarters are in Pune. It has been helping clients with employee management services for the last 23 years.
PaySquare has simplified workforce management for many foreign companies that have hired a talented pool of candidates through Paysquare EOR services.
They have the expertise to manage global teams. Their on-time compliance has ensured that international businesses can enter the Indian market smoothly.
PaySquare cloud-based software DeliziaHR simplifies HR management for its EOR and PEO clients. It provides automated reporting tools, payroll processing tools, centralized document storage, and effortless query management digital tools.
These comprehensive suites of tools keep the client company updated about the outsourced EOR services. With their extensive experience and wide-ranging international network, Paysquare has been the first choice of many US-based companies.
The team of HR professionals has always ensured that the company operations are always compliant with evolving Indian laws. Paysquare is a people management powerhouse in the Indian EOR industry.
Insource India
Banglore-based Insource India is the booming EOR service provider in the domestic market. It offers comprehensive Employer of Record services in compliance with Indian laws. The company provides end-to-end solutions like HR, payroll, and insurance.
Insource India has been providing robust and scalable solutions to manage a workforce in compliance with local regulations. The company has hiring knowledge about domestic employment practices.
Insource India is leading the EOR service providers industry by using the latest technology in the recruitment market to ensure the smooth onboarding of employees. It has supported the business growth plans and aligned its services with business objectives.
Insource India has been providing timely and efficient support to clients and employees. It simplifies the employment process for the client company and the remote workforce. The company has helped many large organizations and SMEs in employment operations.
As a business grows across borders, the complexity of laws and hiring become more challenging. Insource India has offered cost saving, faster-paced, and smoother approach to the employee management process.
Insource India not only focuses on EOR operations of foreign companies but also offers PEO, HR, and recruitment consultancy.
FAQs about Global EOR Market Trends and Analysis
Market trends and analysis forecast the future of the specific industry in terms of demand for the product, supply, and anticipation of its growth in coming years. The leading research reports indicate the Employer of Record platform market growth graph, profitable regions, lucrative segments, etc.
In the long run, it helps businesses to make informed decisions.
Below we have pinned down some crucial analytic FAQs that can help to understand the future of EOR service providers in India and globally.
What is the growth market analysis of Employer of Record worldwide?
The global Employer of Record platform market is going to reach US$ 6794.5 million by 2028, according to Valuates reports.
At what rate the EOR market will grow in the coming years?
The employer of the Record market will grow at an annual growth rate of 6.9% from 2022 to 2028.
Who are the key global players in the Employer of Record industry?
The top trending EOR companies in 2023 globally are Adecco, Randstad, Aquent, and Fox Hire.
Which factors make top EOR companies stand out in the crowd?
All top players operating in the EOR market compete with each other because of some outstanding factors. These factors are technology, range of services, product pricing, customer relation, innovation, and development.
What were the key indicators of the CFO Research Survey in collaboration with Globalization Partners about EOR Service Providers?
- 58% of respondent companies agree to already engaging in global EOR to support their international operations.
- 94% of respondent companies agreed that trusted EOR service providers can overcome potential barriers in the international market.
- 83% of finance executives trusted EOR service providers rather than the in-house HR team.
How to maximize business success with EOR Service Providers in India?
Are you trying to expand your business operation in the most booming Asian market? Does a qualified Indian talent pool attract your management to hire them onboard as remote workers?
With the growing Indian economy, is your business trying to tap into a wide range of opportunities in multiple sectors?
The answer to all these questions lies in creating international ties by partnering with the EOR service providers in India. Businesses can grow in multiple ways by joining hands with a reliable Employer of Record service provider in India.
Here we are listing the top benefits and responsibilities of EOR service providers. Also, describing how outsourcing the EOR services can change the complete dynamics of international expansion in India.
Expansion into Indian Business Market
One of the most significant advantages an international company will experience by outsourcing employment services from an EOR service provider in India is access to the global workforce.
A company can hire talented remote employees in India by partnering with an EOR. It significantly speeds up business growth. Many large corporations and medium-scale companies who want to hire candidates without indulging in the complex payroll, insurance, and HR-related tasks can trust EOR service providers in India.
By outsourcing EOR services, companies can gain extraordinary international market growth rates. The companies coming from higher currency markets get to save costs. They can utilize funds in a better way by hiring local talent.
They also get time to focus on project management, inventory management, and establishing new business goals.
Compliance with Indian Employment Laws
India is home to one-third of the population in the world. It is the largest democratic country. Labor laws and legal compliance are mandatory to run a smooth business in the country.
Health, safety, working conditions of workers, tax, insurance, minimum wage, child labor practices, etc., are some core labor laws practiced by the Indian legal system.
As an international organization entering the Indian market, studying, understanding, and complying with these rules and regulations is challenging. The EOR service providers in India simplify all these laws and help companies to expand hassle-free.
Companies without legal entities in India can face many challenges in handling employee management, payroll, and staffing responsibilities by not partnering with an EOR.
They would run a high risk of facing legal hurdles because of their limited knowledge of the compliance laws.
EOR service providers in India help such companies overcome these time-consuming and costly activities.
Access to Indian Talent Pool to Global clients
The Indian workforce is growing by millions each year.
India has low labor costs, witnessing a cultural revolution, and a high English-speaking population has created more demand for global job opportunities.
India is home to many technology professionals. Also, it is a favorite destination for global outsourcing companies. EOR service providers in India help all these large or mid-size companies as a broker to hire a talented pool of employees.
The EOR companies have vast networks and local employment knowledge, allowing them to tap into the diverse pool of qualified workforce. They assist companies to hire skilled employees in India by relying on EOR service providers.
Mitigation of Risk and Liabilities
There is a whole catalog of potential risks a foreign company can face when they enter into the booming Indian business scenario. Many successful companies entering the Indian landscape have overcome these employment risks like mismanaging employment rights or failing to comply with extensive local labor laws.
Often foreign companies without the assistance of EOR service providers have faced long-term legal and financial consequences for not meeting the compliance requirements. The EOR service provider reduces the liabilities of the budding company in the Indian market.
With the extending workforce of the foreign company without a legal entity, there are many potential complications that an EOR deeply considers:
- Corporate Regulations
- Wages, benefit laws, and complying with state mandates
- Workers Compensation
- Employees Insurance and Unemployment Insurance
- Tax liabilities
- State permits and operating licenses
- Remote workforce visa formalities
Manage Recruitment Effectively
There is a rise in demand for automation technology, chatbots, analytic recruitment, social media recruitment, and cloud computing. The EOR service provider manages all types of remote recruitment for the client company. The EOR service providers provide an employee value proposition using recruitment automation tools.
The AI-based resume screeners, mass mailers, and video interview tools help client companies to streamline the hiring process under EOR operations.
The best Indian EOR service providers offer end-to-end HR solutions across the hiring cycle. They use the latest employment technology.
These tools comply with the standard web security protocols and offer centralized databases to foreign clients.
Key Considerations: Deciding on EOR Service Providers in India
The size of the country, the qualified workforce, cultural diversification, and local employment work culture combined with complex labor laws make it difficult for foreign companies to hire Indian employees. Here comes an experienced EOR service provider who can navigate these companies through flexible hiring solutions.
To ensure all the HR practices comply with the legal system, partnering with a reputed Employer of Record service provider in India will be the wise solution.
Below we will expand on key considerations before deciding on the best EOR service provider for your business.
Local Knowledge and Expertise
A reputable EOR service provider will have all government-approved certifications and legal documents to operate in the country. The most important factor while hiring a remote workforce in India is the immense knowledge about the legal operation of foreign companies in India.
The expertise and experience of an EOR can make them the trusted partner of international clients.
Technical Support
To ease the burden of managing a remote workforce, EOR service providers are using certified automation technology and cloud computing.
- Data security automation tools ensure the privacy of valuable information.
- Secure and advanced technology helps in managing employee data and payroll information.
- The recruitment and data maintenance software ensures fast processing.
- Automation software offers industry-standard visualization and reports.
- The online workforce reduces paper clutter and sends on-time notifications to avoid delays.
- EOR service providers build and share branded pipelines with the latest automation software.
To provide a seamless experience, EOR service providers in India are adapting the latest technology. These digital tools are shared with prestigious clients to overcome industry barriers.
Pricing Model
A transparent pricing model and tailor-made contracts are the most considered factors before a company invests in an EOR Service provider.
There are two types of pricing modules usually followed by EOR service providers in India.
One, the employer pays a predefined percentage of the salary to the EOR service provider. Secondly, the employer pays a fixed flat fee every month, irrespective of the number of employees hired.
The employer has to pay the following to the EOR service provider:
- EOR setup fee
- Employee salary and benefits
- EOR service fee
- Currency exchange fee
- Refundable security deposit
- Additional liabilities
Some EOR service providers in India often include hidden charges and taxes after signing the contract, which might affect the overall budget of the client company. It is essential to read the contract terms carefully before finalizing the pricing with the EOR organization.
India EOR Service Providers: Your Top FAQs Answered
India has a qualified talent pool. Foreign employers are keen on hiring a skilled Indian workforce. But if a foreign company does not want to establish its legal entity in the country, will it still be possible to hire Indian employees?
Below we will be decoding some common doubts, misconceptions, and frequently asked questions about EOR service providers in India.
Does EOR protect company sensitive information?
HR data protection is the utmost responsibility of an EOR service provider organization. The EOR is accountable for re-checking the trademarks and the patents. It has to follow all the data protection laws.
The EOR safeguards company information from corruption, misuse, or loss.
Is EOR right for your business?
Businesses of all types and sizes can benefit from an Employer of Record service provider. A large corporation, a medium or small size business, can hire employees from India without setting up a legal entity.
For international expansion, the EOR is the most convenient option.
Working with a professional and certified Employer of Record can save you from transferring your in-house HR team to a new country.
What is the minimum number of Employees the EOR service provider will hire for my company?
The EOR is a legal employer, and there is no co-employment arrangement. The minimum number of employees is one. Whether the company hires one or thousands of employees through EOR, you can outsource services, expertise, and infrastructure from an EOR service provider.
Does EOR help with tax filing on behalf of international companies?
EOR service providers in India are official payroll providers and function on behalf of client companies. Employer of Record HR software automatically calculates and files the client company taxes in India.
How much does an EOR service provider cost in India?
The cost of every EOR service provider depends upon the range of services offered and opted by the client. EOR service providers in India follow two different pricing models.
The first model is a percentage charge, and the second is the flat fees option. The EOR service providers follow one of these pricing models to partner with foreign client companies.
When should my company use EOR services for my business?
There are several situations in which you should decide to outsource services from an EOR service provider.
- The most common is international expansion, when you want to hire local workers without setting up a legal entity in that country.
- The second case could be when your company wants to employ international workers. But this employment should not be time specific contract based.
- Thirdly, when you have to relocate your current employee to handle your international business, you need the help of an EOR.
- When your company has no knowledge about tax policies and employment laws, choosing an EOR service can save you from penalties and fines.
- Lastly, when you need to protect your intellectual property from unknown risks in a new country, you can opt for EOR services.
Conclusion
In conclusion, partnering with an EOR service provider simplifies global expansion operations. It also offers access to valuable analytic data.
Whether managing payroll, ensuring compliance, filing taxes, or handling HR-related tasks.
The EOR service providers offer a wide range of benefits. By partnering with third-party employment companies like EOR service providers, international companies can focus on their core business operations without worrying about employment issues.
These top EOR service providers in India have established themselves as key players. By delivering reliable, compliant, customized solutions and aligning the company goals with their EOR services, these companies have set a benchmark in the EOR industry in India.
It is essential to evaluate the business needs and align them with the services offered by the EOR.
The Employer of Record service providers in India offers foreign companies a comprehensive solution for navigating the complexities of Indian labor laws. It not only saves clients time but ensures there is no mitigated risk associated with employment in India.
If you are still looking for more information on EOR service providers, click the option contact us and speak to our experienced team.