Is Hiring Contract Workers from India a Smart Move for You?

by Kristan Bella on Wednesday 16 September 2015, 1:01 PM | Category: Business Marketing| View: 669 views

Hiring contract workers from India can often help companies save money while improving customer services. Hiring a contract worker, however, comes with some issues that you will have to confront. Follow this guide to make a smart decision that will help your company succeed.

Paying Contract Workers in India

The amount that you pay your contract workers will depend on what skills you need. Highly skilled people expect to earn more than those completing menial tasks.

Still, wages in India are much lower than those in the United States. The average worker in India makes about $295 per year. The average income in the U.S. is over $56,000 per year. Outsourcing has an obvious advantage when it comes to payroll. 

Sending money to a contract worker in India, however, is a little different than paying someone in the U.S. One option is to use a money transfer to India. This approach will keep expenses low while ensuring that your people get paid on time.

Tax Responsibilities for Contract Workers in India

Contract workers are not your employees. They are completely independent. That means you do not have to pay a portion of their taxes. The tax burden falls on them. This will help you save even more money.

You can only reap this benefit, though, when you treat workers like independent contractors. If you start treating them like employees, then you may have to pay additional taxes.

You can avoid legal issues by making sure your contractors:

  • Have the ability to set their own schedules
  • Get to use their own methods instead of following your specific instructions
  • Are responsible for buying any materials they may need

It also helps to stipulate, in writing, that the person is an independent contractor instead of an employee. Even with this stipulation, though, you must follow the rules.

Finding Contract Workers With the Right Skills

India's colleges and universities graduate about five million people per year. Unfortunately, many of those people do not have the skills they need to find jobs after graduation.

This is a difficult situation for India's employers. It's even more difficult for companies based outside of India.

Before you hire a contract worker, you must make sure that the person has the right skills for the job. Having a diploma does not necessarily mean that the person has the same skills that you would expect from a graduate in the U.S. Differences in the education systems may surprise you.

Many companies ask contract workers to complete tasks before hiring them. If you need a programmer, you might give perspective contractors a piece of code to debug. If you need a blogger, you might ask contractors to send you writing samples based on a unique prompt.

Taking these steps will help you weed out unqualified candidates who could hurt your business.

Hiring contract workers from India isn't as difficult as many business leaders think. There are, however, some challenges. Learning about these challenges should help you decide whether hiring a contract worker from India is a smart move for you.

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