This article is published as a part of a partnership with Recruitery. Recruitery is an all-in-one hiring platform that provides headhunt, payroll, taxes, and compliance solutions for remote teams in SEA.

The rising cost of living puts immense pressure on families and individuals as they struggle to meet their basic needs. This problem originates from several factors, including inflation, the increasing cost of essential goods and services, and wage stagnation. The living situation is especially acute in developed countries, where the cost of living is rising faster than wages.

As a result of this tendency, businesses globally are confronted with various difficulties, particularly in staff cost reduction.

For example, several Silicon Valley and Southeast Asia companies such as Zenius and LinkAja recently terminated the employment of hundreds of talents to restructure their human resources departments. The layoffs vary, but those ones cite a need to streamline operations and reduce costs.

So besides layoffs, is there any alternative to save costs other startup founders are applying?

Hiring international employees

It’s also where you hire. Recruiting international employees, particularly in countries with low employment costs (such as Indonesia, Vietnam, and India), is the initial strategy of many companies in the modern era; however, the quality of the workforce has remained the same, even better.

Carro, Singapore’s unicorn, is one of the best case practices. Though their headquarter is in Singapore, their engineering staff is mainly dispersed in Vietnam and Indonesia. According to the founding team, the formation of tiny groups across various regions was not deliberate but rather the outcome of restrictive recruiting conditions.

Also Read: Winter for tech startups is here? Here’s how to deal with it

“It is really tough to get A players with affordable costs here,” says Co-Founder Kelvin Chng, “so we decided to go where the talent is, instead of being fixed on just one nation.”

Top three low-cost countries in South East Asia

Each country in Southeast Asia is at a different stage of development, but they all provide many chances to introduce new technology and establish business models. The market is now determined by the consumption quality of a constantly expanding middle class.

The population’s engagement in the digital world is increasing due to the development of affluent consumers. Therefore, now is an excellent opportunity to enter and ride the present economic wave. Numerous markets are still in their infancy, and the chances for disruptive technologies are excellent. Its enormous GDP is the second most intriguing market after the United States.

In 2022, the gross domestic product of the five largest nations of the Association of Southeast Asian Nations would increase by 5.1 per cent.

Innovation’s robust foundation is providing a tremendous boost to company development. Moreover, incentives offered by the government for creating new tech businesses are a further aspect contributing to this phenomenon. Therefore, it is hardly surprising that foreign IT titans establish headquarters and regional centres in Southeast Asia.

Indonesia

Indonesia is one of the largest populations in the world, with more than 275 million people inhabiting its archipelago. With a median age of 28 years, the country also has a comparatively young workforce. The following are some of the other labour market advantages of Indonesia:

The cost of living in Indonesia is also inexpensive, being roughly 50 per cent less than the U.S. average and 56 per cent less than Singapore.
Most organisations hiring hidden talent from Indonesia seek programmers, designers, and data entry specialists. In addition, numerous locals provide tech assistance for firms in the United States and Europe.
The majority of Indonesian university graduates have a very high level of English proficiency.
In Indonesia, the IT sector is a tailwind generating demand for expertise. Artificial intelligence, DevOps, data, and programming are the dominant topics of discourse.

Indonesia’s monthly minimum pay and cost of living, combined with its large population, make it an excellent location for employing remote workers. The monthly minimum wage ranges from IDR 1,765,000 (US$127) to IDR 4,416,186 (US$317), depending on the job region.

Vietnam

Over the last decade, Vietnam has achieved such success in the software outsourcing industry that many nations see it as an outsourcing hotspot in Southeast Asia.

Here why:

Because of its outstanding mitigation techniques, Vietnam effectively battled diseases, pandemics, and infrequent typhoons. This demonstrates remarkable resilience and commitment to business continuity.
According to MarketInsider, this is the fifth-best nation for outsourcing. In addition, multiple U.S. corporations have claimed that outsourcing to Vietnam may save them up to 90 per cent of the entire cost, particularly in software development.
Many talents are now willing to experiment with new AI, machine learning, and blockchain technologies.

It can be said that if you’re looking for cost-effective solutions with cutting-edge technology, Vietnam is the best place.

India

Like Vietnam and Indonesia, India is one of the leading centres for remote workers, particularly in the ICT sector, with over 1.3 billion inhabitants. Other remarkable advantages include:

India has one of the world’s fastest-growing populations and the highest literacy levels. Moreover, with over 125 million, India is the world’s second-largest English-speaking country after the United States. So it’s no surprise that so many multinational corporations prefer to use India as a remote workforce.
India’s unemployment rate has naturally increased due to the recession caused by the COVID-19 virus in 2020. However, there has also been a growth in demand for sophisticated abilities in artificial intelligence, machine learning, and data scientists due to the increasing shift toward digitalisation.
The Indian workforce is highly educated and uses English as one of its official languages.
According to figures compiled by the specialised employment firm Xpheno, the IT industry in India added over 500,000 new positions in FY22, twice the predicted net increase in its active workforce for the fiscal year. These numbers demonstrate the expansion of the IT employment sector.

Firms consider highly valued non-salary perks and the primary wage when calculating remuneration in India. Having a good work title is desirable and maybe just as crucial as negotiating pay.

Also Read: Hiring made easy: How to survive the talent war against tech behemoths?

Employers are obligated to provide statutory bonuses if they have at least 20 workers, and the employee earns less than INR 10,000 (US$128) per month. The sum varies between 8.33 per cent and twenty per cent of the employee’s income or INR 100 (US$1.29), whichever is greater. In addition, workers may anticipate significant salary increases and promotions after their yearly evaluations, with 15 to 20 per cent or more gains.

The significant advantages of employing remote employees in India are their low wages and extensive skill sets. In addition, with the technology industry’s growth over the past few decades, the demand for highly qualified IT developers and engineers will continue to rise.

How to start hiring globally

First, founders must collaborate with local recruiting or global hiring solutions. One of the key advantages is saving your time and human resources as they are usually equipped with the requisite expertise and direct relationships with the talents you’re looking for.

What happens after you hire successfully in local countries where you don’t have the local entity? Both ways for you to consider:

Signing independent contractors
Using a third party to hire your employees compliantly.

Each option has its own pros and cons. The first one will help you waive employment costs such as taxes or insurance, but it would not be intriguing to top-tier talents. The second one can cover the weakness. However, they require substantial expertise in local compliance to master the labour risks.

In addition to being concerned with legality and ensuring retention, businesses must also provide effective onboarding and payroll administration. Working with a third party to perform these tasks should be the primmest way to assist you in alleviating your strain and guarantee that everything is completed correctly.

–

Editor’s note: e27 aims to foster thought leadership by publishing views from the community. Share your opinion by submitting an article, video, podcast, or infographic.

Join our e27 Telegram group, FB community, or like the e27 Facebook page

Image credit: Canva Pro

The post Why a recession is a good time to start hiring globally appeared first on e27.