Employer of Record (EOR) An Emerging Opportunity for The Indian IT/ITES Sector

Abstract

The Indian Information Technology/Information Technology enabled Services (IT/ITeS) companies operate in a minimum of fifteen to twenty countries with the Tier 1 entities going beyond the forty countries mark.  It becomes pertinent that, creation of legal entities viz., Branches, Subsidiaries, partnership firms, firms with teaming agreements become the order of the day to deliver business in a compliant way. The question, the paper raises is, what about those countries and emerging markets where the companies do not have legal entities (permanent entities-PEs)?  How does one operate and ensure delivery of services for clients either in the client location or associates being in a third-party location? Can near shore become an important facet of delivery in the global delivery model (GDM) that is being practiced? Though the Tier 1 entities do manage to ensure delivery, the Tier 2 and Tier 3 entities have their own issues in ensuring delivery of the service offerings.  A total of 108 Human Resources and Compliance related employees of organizations have been contacted to ensure the understanding.  It is here that the facet of Employer of Record (EoR) plays a dynamic role and ensures compliance of the associates who travel to a location where the Indian IT/ITeS organization does not have an entity to deliver the services.  EoRs with a global footprint can send the associates of an entity to different countries where they do not have PEs and ensure delivery of the services in a compliant manner.  The research paper is a study of how the Indian IT/ITeS sector has managed to get EoRs on board and ensure services a rendered in remote locations and countries where they get a one-off or short-term projects to deliver.  True to its nomenclature, an EoR takes on a company’s human resources responsibilities and onboards, pays, and manages employees while the IT/ITeS organizations maintain and control the day-to-day operations.