In India, the average time taken to hire employees is 32 days. Thus, companies should budget two months for onboarding an employee from when the position was first advertised.
India's workforce faces challenges in terms of education and skills. However, with a population of nearly 1.33 billion, India offers a large pool of potential candidates. Despite the low gross enrollment ratio in tertiary education, there are around 48.8 million young adults attending higher education institutions in India. Highly educated individuals can be found in industries like technology, IT outsourcing, retail, finance, healthcare, and tourism. Agriculture is the largest employer, followed by the services and manufacturing sectors.
Many Indian employees, especially younger ones, are comfortable changing jobs. Around 56% of Indian workers have chosen to switch employment after a short period. Reasons for job-hopping include better opportunities elsewhere or dissatisfaction with their current job. Job-hopping can be seen as a way to diversify skills and improve resumes. While this provides a larger candidate pool, it also requires efforts to retain top talent through competitive salaries and job title changes.
Because of all the allowances many employees receive on top of their basic pay, negotiating compensation packages in India is a complicated procedure. These allowances amount to so much that an employee’s base income accounts for only 40% of their overall compensation. These benefits may include:
Some of these allowances are taxable, while others are exempt from taxation up to a specific amount. Choosing the appropriate quantities to include in an employee’s remuneration package is complex, so overseas firms may wish to consider outsourcing HR for their Indian staff. Employees will seek a specific wage and a compensation plan arranged in the most tax-efficient manner possible.
It should be noted that while India does not have a national minimum wage, it does grant local governments the right to set minimum wage rates. The rates vary depending on region, industry, sort of job, and age of the employee.
Navigating India's tax regulations can be challenging for multinational employers. India recently implemented a new tax code that eliminates 70 tax breaks and offers lower tax rates. Employees can choose between the old and new systems, both of which are progressive. Those earning below a certain amount are exempt from income tax.