Recruiting the right employees, and building a team, is an integral part of setting up business in India.
Over 99% of staff employed by UK firms operating in India are hired locally. Of course, with its vast population, India has a large talent pool from which to recruit, with many highly-skilled individuals.
However, the sheer size of India and its workforce, combined with cultural differences and attitudes to employment, can make it difficult to find the right staff for your business. In particular, with the growing number of international companies competing for talent it can be challenging to find experienced senior executives.
If you are aiming to fill positions that require specific experience or particular skills, recruitment firms can be extremely useful and are often necessary to make sure you find the right staff. To help companies entering the Indian market manage their recruitment effectively, the UK India Business Council provide recruitment support where we manage the process and the recruitment agencies from start to finish. We also provide UK companies with our insights and experience in recruiting in India. If you’re interested in finding out more about how we can help you hire staff click here.
RECRUITMENT CULTURE IN INDIA
- English is the main language of business, and job interviews would typically be conducting in English.
- UK Companies need to be sensitive to India’s different cultural and religious norms that affect HR practices. You can find out more about Indian business culture here.
- In comparison to the UK, relationships between managers and staff in India are more formal and hierarchical. Although this is changing as more MNCs establish in the country.
- It is not unusual for candidates to address interviewers as ‘Sir’ or ‘Madam’.
- Indian employees value secure and long lasting jobs. As a result contract jobs are often seen as a last resort and “freelancing” is not as widespread as in UK, or seen as a particularly desirable state of employment.
- Job titles and designations are very important. For much of the population their employment forms the basis of their social status, eligibility for a mortgage, and even marriage prospects. Indian candidates are extremely sensitive about the role they accept, their designations, and even the company’s status as a brand. In this regard UK companies have soft advantage as products and services and brands from the UK are generally viewed positively.
- Senior Indian professionals have an international outlook and think globally. They most likely speak English as their first language, have often been educated abroad, and look for clear career progression and career paths before accepting a job offer.
TAILOR YOUR RECRUITMENT STRATEGY ACCORDING TO LOCAL MARKET PRACTICES, AND FOCUS ON INTERNAL TRAINING AS INDIAN EMPLOYEES HAVE EXPECTATIONS OF CONTINUOUS CAREER AND SALARY DEVELOPMENT
As in the UK, executive search firms in India find talent for senior level management positions which require specific skills and expertise. Working exclusively on behalf of the client company, they use their insight and industry expertise to scope out the market and find the best possible candidate. International executive search consultancies first entered India in the mid-90s. Their services are becoming increasingly popular and well established. Fees are paid as a retainer and can vary between 30% and 40% of the annual package.
CONTINGENT FIRMS IN INDIA
Contingent firms are typically used when filling mid-level positions and do not get paid until the position is filled. Recruiters often work with a large number of job openings at any one time, and, using a database of CVs, they will look for suitable candidates to send to the client. These companies are often organised by city although they may have some sector expertise. One can expect fee levels at 10% – 18% of salary.
India’s estimated 3,300 business schools churn out tens of thousands of management graduates each year. On-campus recruitment and online applications are used to recruit these fresh graduates. Despite the abundance of educated graduates ready to be recruited, they may lack appropriate skill-sets for the workplace. It is important to assess candidates not only on academic achievements, but also on soft skills too. Top companies tend to target graduates from the most sought after business schools and technical institutions such as IIM, IIT and Delhi University.
INDIA’S ONLINE JOB PORTALS
India’s online job sites are an efficient and cost effective way to find recruits, particularly if you are looking for junior to mid-level staff. These portals offer a wide choice, however be prepared to receive high volume of responses. To save time and avoid unwanted applications, be as specific as possible about the job duties and the qualifications you’re seeking.
SOCIAL MEDIA BASED RECRUITMENT
Recruitment through social media in India is certainly on the rise and the trend is expected to continue. It is an effective tool to reach a significant number of people quickly and easily but it may not be suitable for all types of jobs or Industries.
CHALLENGES FOR RECRUITING IN THE INDIAN MARKET
- With such extraordinary growth, India has a large number of rapidly growing emerging sectors. As a result, each year a sector or sectors conduct a large amount of hiring, resulting in attrition across other industries. Reasons for high attrition include compensation, learning and development, and future career progression. Focus on internal training and give employees clear career growth paths to prevent attrition.
- The demand for an increase of 25% to 30% on salary is standard in the current market. Don’t be shocked. This is often a starting point rather than a hard and fast requirement. Real salary expectations need to be established early in the process.
- The gap between the CEOs and entry-level graduates is wide in India. In some cases, the top management draws as much salary as their UK counterpart. There is a growing concept of “Global Executives, Global Salaries” in India. Thus, India is no longer a place of cheap management.
- The tax system and, consequently, remuneration packages (known as Cost to Company or CTC) are often complicated. Individuals will have differing tax requirements and different staff numbers result in differing requirements such as Provident Fund. Rules change annually. It is wise to engage a payroll accountant as soon as hiring commences.
- Salary packages in India are known as CTC (cost to company). This includes all elements of pay. Your tax accountant should design a corporate structure as a template.