Are you a US company looking to hire software developers? Hiring a top software developer from the US usually comes with a hefty price tag. For instance, according to the platform Uplers, a software developer with 5+ years of experience will command an average pay of around $8000. But, what if you can hire an Indian software developer with a similar expertise for a fraction of the cost - at around $2000?

Moreover, India has produced some of the world’s best tech minds and is continuing to do so. According to a NASSCOM study released in Feb 2022, India had the second largest tech talent pool in the world, at 3.8 million in 2021, and an annual influx of 2.14 million STEM graduates. An AIM India report states that in 2022, Indians were the highest H1-B visa holders, which is expected to grow substantially every year. 

The pandemic and technological advancements have led to the boom of remote hiring, which fuelled cross-border hiring. This phenomenon, in addition to the availability of a huge pool of qualified talent, makes India one of the favored global hiring destinations. 

In this article, we’ll show you how to hire developers in India, delving into the steps to follow, factors to consider, and strategies for overcoming potential challenges.

3 Ways To Hire Talented Software Developers in India

A US company can hire Indian developers through the following ways. 

1. Setting up a local entity

You can establish a subsidiary or branch office in India, adhering to local laws and regulations and obtaining necessary licenses. This enables you to build an HR infrastructure to hire and manage the right talent. 

Pros:

• Complete control over your operations
• Ability to hire and train a dedicated team with cultural fit 
• Deeper market penetration and long-term growth

Cons:

• More complex and time-consuming to set up and manage
• Risk of non-compliance with local laws and regulations
• Costly to manage a full suite of HR functions like payroll, benefits, etc.
• Requires heavy investment in technology and infrastructure 
• Expensive to hire legal experts to ensure compliance 

2. Employing contractors and freelancers

Hiring freelancers and contractors is a cost-effective alternative to setting up a legal entity in India. It’s ideal for short-term projects with specific skill requirements. Unlike full-time employees, individual contractors work on their own terms, provided they meet the deadlines. They are also not entitled to work equipment and employee benefits.

Pros:

• Flexibility for short-term projects
• Faster access to a vast talent pool through numerous platforms
• Cost-effective for project-specific or skill-specific roles

Cons:

• Limited control over work schedule and process
• Requires careful contract drafting to clearly define their scope of work and expectations
• Not ideal for long-term projects

3. Partnering with an Employer of Record (EOR)

An Employer of Record acts as the official employer of the Indian developers you hire, handling legal and administrative tasks like onboarding, payroll, benefits and compliance. However, you maintain operational control over your hires. 

This approach allows you to bypass the legal complexities of establishing a legal entity while providing greater control compared to hiring independent contractors. 

Pros:

• Simplifies and streamlines hiring, onboarding, and other administrative processes
• Reduces legal and compliance risks, as EOR firms are experts in local employment law
• Offers more control over the development team 

Cons:

• Additional fees associated with EOR services
• Less control compared to establishing your own entity

Gloroots is an experienced EOR service provider, operating in more than 140 countries. We handle onboarding, payroll, benefits, compliance, and other administrative functions. Partnering with us offers significant cost savings and minimizes legal and compliance risks, allowing you to focus on your core business operations.

How to Hire Developers in India

Follow the steps below to successfully hire Indian developers.

Step 1: Define your needs

Take some time to clearly define your requirements to set the stage for a successful hiring process. Outline specific skill sets—technical and non-technical— as well as any project-specific requirements. Also, determine the level of experience you require, whether you need entry-level, mid-level, or senior developers.

Step 2: Craft a compelling job description

After identifying your requirements, craft a clear and compelling job description to attract the most suitable candidates. It should be explicit and elaborate, including the following elements:

• Key skills: Clearly outline the technical skills required, such as proficiency in specific programming languages, frameworks, databases, or tools. Additionally, highlight the importance of soft skills like communication, problem-solving, and collaboration abilities.
• Educational qualifications: Specify the necessary degrees, certifications, or training required for the position.
• Experience level: Indicate your desired level of experience, including years of experience, industry expertise, and relevant projects.
• Roles and responsibilities: Outline the specific day-to-day tasks associated with the position.
• Cultural fit: Describe your company culture, values, and work environment
• Compensation and benefits: State the salary range and other perks offered

Step 3: Leverage the right platforms

To increase your chances of finding talented Indian developers, use a combination of these sources below. 

• General job boards: Platforms like Naukri, Monsterindia, and Indeed India have a large pool of candidates. Moreover, posting jobs and managing applications on these platforms is easy. 
• Specialized professional boards: Leverage platforms that focus on IT and tech talent such as Dice, Hired, and Wellfound, etc. 
• Freelance Marketplace: Explore freelance platforms like Fiverr, Freelancer, and Upwork, where you can hire international contractors and freelancers from India. 

Focus on portals that have a strong presence in India. Also, customize the job description for each platform to reach a large pool of qualified candidates.

Step 4: Screen and shortlist candidates

To identify the most promising candidates, carefully review the applications for the required skills and experience. Also, reach out to their previous employers to verify their work history, performance, and professional conduct. Then, compile a list of candidates who will move forward in the hiring process.

Step 5: Conduct technical assessments and interviews

Assess the shortlisted candidates’ technical skills using coding tests. Also, interview them to evaluate soft skills such as communication, teamwork, and problem solving, and assess their cultural fit with your organization. 

Involve a diverse team of interviewers, including managers who will work closely with the candidate, to gain different perspectives. 

To ensure seamless communication, leverage online conferencing tools like Google Meet or Zoom.

Step 6: Onboard and integrate

After selecting the right candidate, seamlessly onboarding them is crucial for successful integration with your existing team. This includes providing them with employment contracts and completing all necessary documentation in compliance with local laws and regulations. Additionally,  communicate the role expectations and company policies, provide them with the tools and resources required to perform their job effectively, and introduce them to team members. 

Partner with an EOR service provider to streamline the onboarding process for your Indian software developers. They handle legal and administrative tasks for you, saving you time and resources, and allowing you to focus on integrating new employees into your team seamlessly.

Top Destinations to Hire Software Developers in India

India boasts a vast pool of tech talent and a thriving technology ecosystem, fueled by world-class educational institutions and favorable government policies. In addition to many IIMs and IITs, numerous global companies have established Global Capability Centres (GCCs) across various tier-1 and 2 cities. 

Here are some top cities to explore when hiring developers in India.

1. Bangalore

Known as the “Silicon Valley of India”, Bangalore is a prominent IT hub. The city is home to top institutes such as the IIT-B, the Indian Institute of Science (IISc), and the National Institute of Design (NID). 

The local government also provides a favorable business environment with tax exemptions, subsidies, and special economic zones (SEZs). Along with a staggering talent pool, the city offers top-notch technical and transportation infrastructure, including numerous tech parks.

2. Hyderabad

Hyderabad offers a vibrant tech atmosphere and has seen remarkable growth in the IT sector. Institutions like IIT-H, International Institute of Information Technology Hyderabad (IIIT-H), etc., have created a vast pool of qualified tech talent in the city.

Business-friendly policies, such as single-window clearance for IT companies and other incentives, play a huge role in this development. 

Hyderabad is an excellent destination for hiring talents in specialized fields like AI and cybersecurity. 

3. Pune

Pune is a tech powerhouse, thanks to its strong engineering talent pool, affordable cost of living, and focus on work-life balance. Notable institutions like the Indian Institute of Science Education and Research (IISER), College of Engineering Pune (COEP), and Symbiosis Institute of Technology (SIT) contribute to the city’s talent pipeline.

Pune is known for its focus on research and development in various streams, earning it the moniker “Oxford of the East”. The state government offers favorable policies and top-notch infrastructure support for tech companies.

4. Mumbai

As the financial capital of India, Mumbai is home to various IT companies with a  focus on banking and financial services. IIT-B, the University of Mumbai, and Veermata Jijabai Technological Institute are important contributors to the city’s talent pool.

The state government offers a friendly business ecosystem and top-notch infrastructure. The city boasts excellent international connectivity, favoring global companies.

5. Chennai

The southern state is known for its international automobile and IT companies, making it a magnet for talent from across the country. IIT-M, Anna University, and College of Engineering, Guindy (CEG) are some noteworthy institutions.

The government not only offers tax breaks and subsidies for IT companies but also promotes skill development programs. The city enjoys a lower living cost, compared to the other metros.

In addition to these tier-1 cities, abundant talent is available across many tier-2 and 3 cities like Kochi, Coimbatore, Jaipur, Bhubaneswar, and Indore. Many international companies and GCCs are expanding to these tier-2 cities to leverage the cost advantage. The rise of remote working has also made these cities attractive tech hotspots. 

Considerations and Challenges in Hiring Indian Developers

While hiring talented software developers from India can provide US employers with access to a vast pool of skilled professionals and potential cost savings, cross-border hiring comes with unique considerations and challenges.

Below, we explore key issues you should be mindful of to mitigate potential risks and enjoy the benefits of a global workforce:

• Cultural fit and time zone differences

Cultural alignment is as crucial as technical skills for the smooth functioning of a team. During the hiring process, assess candidates’ understanding of cultural nuances, communication practices, and working styles. Prioritize candidates with international experience and the ability to adapt to diverse team dynamics.

Additionally, consider the vast time difference between the US and India, which can impact team communication and collaboration. Establish clear protocols and leverage project management tools to ensure seamless coordination across time zones.

• Legal and compliance requirements

US companies hiring Indian developers should adhere to India's employment laws and regulations, such as the Code on Social Security, Code on Wages, Industrial Relations Code, and the Health and Working Conditions Code 2020. These laws govern aspects such as working hours, overtime norms, minimum wage, leave policy, and tax regulations. 

Employers must understand and comply with these laws to avoid potential legal issues. Partnering with an EOR, like Gloroots, can streamline compliance, making the process hassle-free for you.

• Compensation and benefits

Although India has lower labor costs than the US, US employers should still offer a competitive compensation and benefits package to attract and retain top Indian talent. Companies should research industry standards based on various factors like location, experience, and role requirements. Use tools like Gloroots’ Global Salary Calculator to determine fair compensation in line with market rates. 

In addition to basic benefits like health insurance, paid time off, and retirement plans, offer perks like flexible work arrangements,  learning and development opportunities, and wellness initiatives to improve job satisfaction and retention.

• Employee misclassification

Rightly classifying employees and independent contractors is crucial for compliance. Employment terms and benefits are different for employees and independent contractors. Misclassifying employees as contractors and vice versa can attract hefty fines and legal repercussions. 

You can use Gloroots’ employee misclassification risk calculator to avoid the risk of misclassification.

Why Hire Software Developers in India

Hiring software developers in India offers a lot of competitive advantages to companies abroad. Let’s discuss the significant reasons.

• Access to a matured tech talent pool

India is home to a huge number of developers, with exposure to global projects. They have great expertise in various technologies and programming languages. 

• Cost-effectiveness

The goal of any business is to hire top-quality talent at competitive costs. Although cost should not be the only defining factor in hiring candidates, budget plays a significant role. India offers considerable cost advantages compared to hiring from the US and UK. This makes India an appealing choice for tech companies in the US.

• Strong technical education

India has a strong foundation in STEM education with many top-notch institutions and L&D initiatives of top IT companies. India has the second-largest number of engineers, next only to China, making it a global tech talent hub.

• English language proficiency

Communication is a crucial aspect of the success of a business and a major factor when it comes to global hiring. India has huge English-speaking talents as English is one of the major languages used to communicate in India. 

How Much Does It Cost To Hire Developers in India?

The cost of hiring a software developer in India depends on numerous factors, including:

• Candidate experience: Salaries and benefits will vary for junior, mid, and senior-level candidates.
• Project complexity: Simple projects with a well-defined scope of work will cost less compared to complex projects involving ad-hoc requirements.
• Location: The cost of living is different for the tier-1 and 2 cities, so the salary package will also vary based on the city.

Additional costs:

• Benefits: In addition to salary, competitive benefits will help attract and retain top talent. 
• Recruitment fees / EOR fees: Partnering with a recruitment firm or an EOR will have an additional cost impact.

Cost structure for EOR services

EOR firms can make hiring Indian developers easier by handling legal, compliance, and other admin functions. They typically charge in 2 ways:

• Fixed monthly fee: This fee is based on the services availed, such as payroll, compliance, and onboarding.
• Percentage-based rate: EOR firms might charge a fixed percentage (5 to 15%) of your total compensation package.

Hire Developers in India with Gloroots

Partnering with an EOR firm is a strategic solution for US companies hiring Indian developers. These EOR firms are experts in local laws and regulations, and you can avoid the risks of non-compliance. They also take a majority of the administrative burden, such as payroll, benefits, and tax administration. 

Gloroots is your one-stop EOR solution, empowering you to build a high-performing software development team in India. You can save time and resources by streamlining your hiring process. 

Contact us today to quickly and compliantly build your dream software development team in India!