Most businesses use internal HR to find and employ the right talent. However, setting up your HR department needs time and money. Startups, new companies entering India, and small and medium-scale enterprises can find this process daunting.
At such times, instead of sticking to conventional hiring methods, it is a smart move to work with a credible EOR service provider in India. Since both methods have benefits and constraints, it is essential to understand which approach is better for your organisation.
Before you start to compare an EOR solution provider with conventional employment methods, it is crucial to have a better understanding of your goals, needs, and available resources.
Here’s a brief comparison of EOR service providers vis-a-vis traditional recruitment processes.
Conventional Hiring: The Typical Route
In this approach, employers recruit employees directly. This is done either through their internal HR team or external agencies.
The approach offers complete control to the organisation over the recruitment process. The organisation dictates the employment terms. However, there are challenges.
- Staying Compliant Can be a Hassle
Labour laws of India can make compliance difficult. To top it off, the laws are diverse and increasingly evolving. Organisations need to follow the local taxation laws and regulations. For example, employee benefits. This can prove to be costly and time-consuming.
- Administrative Burden
The organisation must address administration-related issues like tax filings, payroll management, etc. The internal HR team gets overburdened in the process and is, therefore, unable to focus on productive activities.
- Higher Costs
When you hire directly, you will need to bear the burden of not just salaries but also other costs related to employee benefits, legal compliances, and setup.
EOR Solutions: The Alternative Approach
EOR or Employer of Record service providers in India handle all employment-related activities and responsibilities, like payroll, legal matters, etc. They do so on behalf of your organisation. An EOR service provider in India can provide multiple benefits to organisations like –
- Compliances become simpler
An India PEO service provider ensures that all activities comply with India’s labour laws. They ensure that local regulations and tax compliance are met. The employment contracts are drafted accordingly. All of this helps minimise legal risks.
- Cost-Effective and Scalable
Foreign businesses find it easy to hire employees with EOR solutions. They do not need to establish a local entity in India. This becomes a big saviour for their investment, and they can scale up their workforce requirements without much hassle.
- Faster Onboarding
An EOR service provider in India assists with a faster onboarding process, where employees are onboarded within days. This helps save weeks and even months that are typically consumed by conventional hiring methods.
Which Is Right for You?
If your internal HR is already robust, Conventional hiring is good for you. However, EOR solutions can make a big difference to new entities, small and medium-sized enterprises, and foreign businesses entering the Indian market for the first time.
