The idea is bold. The product, groundbreaking. Your vision? To go global. The world is calling you and you’re ready to change the game. However, one thing still stands in between you and your breakthrough – finding the right talent, to bring your vision to life – and here’s where things get tricky.
Globalization and technological advancements have significantly blurred the borders, allowing businesses to tap into international markets much earlier in their lifecycle. What was once the domain of more mature companies is now accessible to younger firms as well. This growth is particularly evident in the tech sector. The Indian SaaS market, for example, is expected to capture an 8-9% share of the global market, generating a substantial revenue of USD 30 billion by 2025.
However, as the growth continues, the business landscape is becoming fiercely competitive, putting Indian companies under pressure to compete and catch up with global industry leaders. To maintain a competitive edge, organizations need a team of highly skilled, passionate, and innovative individuals who can turn their ideas into reality. This has led companies to increasingly turn to global talent pools to access top-tier talent with specialized expertise and deep local knowledge.
However, global hiring isn’t as simple as posting a job listing.
Challenges in Global Hiring:
While the benefits of global hiring are clear, it also brings with it a set of legal and administrative roadblocks for HR teams, which can often take months to navigate. These include:
Complex Labor Laws: Complying with each country's unique labor laws, hiring practices, wages, benefits, and employee rights, can quickly turn international hiring from an opportunity into an operational nightmare. The frequent changes in these regulations make it even harder to keep up.
Payroll and Tax Compliance: Managing payroll for a globally distributed workforce can lead to delays, errors, and employee dissatisfaction. Differences in tax structures, salary cycles, and mandatory benefits in other countries add to the burden.
Setting Up Legal Entities: Establishing legal entities in each country a company wants to expand into can be a lengthy and resource-intensive process, delaying talent acquisition and diverting resources from core business activities.
Without in-depth knowledge of local laws, businesses risk non-compliance, which can lead to hefty penalties, legal repercussions, and reputational damage. This is where Employer of Record (EOR) emerges as a crucial solution.
What is an EOR?
An EOR is a third-party service provider that acts as the legal employer for a company’s workers. Think of it as your global hiring ally, taking up full responsibility for managing the administrative and legal aspects of hiring, so you can focus on the business. This includes payroll, benefits, tax compliance, local labor law adherence, and more. By partnering with an EOR provider, businesses can hire employees in international markets without the need to establish a legal entity in each country.
The process to prepare for expansion into a new country can take HR teams several months of research of local and federal tax requirements, labor laws, hiring regulations, and other compliance obligations.
Consider a scenario where an Indian software company wants to hire a developer in Germany. By partnering with an EOR provider that already has a legal presence in Germany, the company can easily employ the individual, ensuring full compliance with German labor laws. EOR experts take care of all the complex paperwork, from local employment contracts to payroll management, allowing the company to focus on its business objectives. Freeing up time, lightening the workload, and sparing you from the compliance chaos!
Let me give you a real-world example of Pixis, a tech firm specializing in AI-powered marketing solutions. While expanding its global presence across APAC, MENA, the U.S., and Europe, Pixis faced serious delays in onboarding employees overseas, which would take up to 10-15 days. This resulted in the company losing talent to competitors. With an EOR model, this time was reduced to just 30 minutes, allowing the company to hire faster and secure the best talent.
Moreover, offering competitive and compliant employee benefits across various countries while managing payroll can be cumbersome, error-prone, and cause salary delays. EOR experts ensure employees are paid on time and in full compliance with local laws. This reduces administrative burden and improves employee satisfaction.
Additionally, businesses often need to hire various types of workers like full-time employees, contractors, or freelancers, but managing different employment scenarios can lead to complex administrative challenges. With EOR, businesses can easily hire a mix of full-time, temporary, and contract workers. This flexibility enables companies to scale their workforce as needed, without the administrative complexity of managing each employment type independently.
The EOR model offers businesses a streamlined solution to global expansion, enabling them to tap into talent worldwide without the traditional complexities. By outsourcing employee management, companies can focus on their core objectives while scaling quickly and compliantly. As the global workforce becomes increasingly integral to business success, this ensures that companies are not only compliant but also agile, positioning them for long-term growth in a competitive landscape.
About Sumit Sabharwal, Country Leader, Deel India
Sumit Sabharwal is the Country Leader for India at Deel, the all-in-one payroll and HR platform for global teams. With over 35,000 clients across 150+ countries, Deel manages in-house, in-country payroll teams and provides a wide range of services, including Employer of Record, contractor management, immigration support, and HRIS solutions globally. In his current role, Sumit is responsible for managing and expanding Deel's operations in India.
With over 20 years of experience in leading HR and technology solution companies, Sumit began his career in sales operations and has since held several leadership positions at global and Indian corporate giants. He has served as Managing Director and CEO at organizations such as Excelity Global and OCS Group UK. Additionally, he has led senior leadership teams in renowned companies, including Godrej Group, HDFC Bank, Essar Group, and Equifax. Prior to joining Deel, Sumit was the CEO of TeamLease HRtech Ltd.
An engineer with an MBA, Sumit has studied International Business at Institut d’études politiques de Paris, France, and done a management program in BFSI Finance Sales from IIM Kozhikode. He is also a PhD scholar in Management from NMIMS and has done an organizational leadership program at Harvard Business School. Sumit also holds an honorary PhD from an international university in South Korea