Summary
Shared services provide a platter of benefits, and employer of record (EOR) is a lifesaver for anyone who has worked internationally. Integrating EOR solutions with shared services enables companies to achieve cost efficiency, compliance, and scalability. It ensures your brand shines brightest even on the rainiest of days.
Shared services are well-established business models widely used across industries.
Initially started as a concept to support back-office functions such as payroll & accounting, the model has evolved significantly.
Technology advancements in the information technology (IT) and telecommunication sectors are crucial in shaping the services as a robust service model.
Today, you must have seen that shared services are available for several business functions, like human resources (HR), finance, IT, personnel training, and procurement.
This service scope expansion is possible due to technological innovations such as the Internet of Things (IoT), Machine Learning (ML), and Artificial Intelligence (AI).
As a result, communications and automation processes, which are core aspects of the services, can be easily streamlined using enterprise resource planning (ERP) systems and other integrated software solutions.
In this blog, we’ve explained new opportunities for shared services or shared service centers (SSCs) using the most cost-effective employment model: employer of record (EOR).
Also, you’ll learn about the advantages of choosing the right locations for your SSCs by giving India as an example.
Before we dive into these two points, let’s briefly revisit the meaning and key aspects of shared services to get a clear perspective on the uniqueness of the business model.
Shared Services: Meanings and Key Aspects
Several industries, ranging from manufacturing to e-commerce, often rely on shared service providers for various reasons.
Most back-office or non-core business functions across sectors can be effectively streamlined using shared service centers.
Here are the insights into key business functions primarily used for setting up SSCs.
IT Services
IT shared service centers can effectively handle support services, including helpdesk support, application development, network management, and cybersecurity & infrastructure management.
You can leverage economies of scale in handling hardware or software purchases using a single point of contact.
SSCs are the most effective way to provide unified service support and enhance service delivery in the IT industry.
Accounting & Finance
Several functions related to accounting and finance, such as financial reporting, accounts payable and accounts receivable, budgeting, and taxes, can be easily streamlined using SSCs.
With standardized processes, you can exercise better control over financial processes and ensure the accuracy of services related to accounting and finance.
Human Resources Management
Various HR-related functions, like talent acquisition, payroll, employee records management, benefits administration, and personal training, can be handled through shared services.
You can ensure a consistent employee experience by providing uniform HR support and policies.
Sourcing & Procurement
Vendor management, bulk purchasing, and supplier & contract management are major services conducted using shared service centers.
Centralized procurement enables bulk purchasing, greater transparency, and more effective supplier tracking.
Logistics & Supply Chain Management
Using SSCs, you can improve inventory management, optimize logistics support, enhance warehousing, and improve supply chain visibility.
With centralized processes, you can reduce costs and optimize logistics & supply chain management with better coordination and efficiency.
Digital Marketing
Content creation, distribution, and promotion through various social media platforms can be streamlined using SSCs.
With centralized campaign management, SSCs enhance content creation, optimize SEO/SEM strategies, and unify social media efforts.
Using integrated analytics and standardized reporting, you can conduct a comprehensive performance analysis and improve the digital marketing team’s efficiency.
Data Analytics
Using centralized data warehouses, SSCs ensure consistency and compliance fulfillment in data collection and management.
SSCs help improve decision-making and strategic planning by pooling specialized analytical expertise and advanced tools such as AI and ML.
You can ensure a holistic yet cross-functional insight by implementing standardized governance of predictive analytics, reporting, and dashboards, and data integration.
RD & Engineering
You can foster innovation and competitive differentiation through centralized R&D facilities and engineering support.
Using collaborative platforms and tools, SSCs ensure effective management of R&D projects and engineering services.
Customer Services
You can set up shared service centers for various customer services, like call center operations, customer relationship management, and support services.
Having centralized customer service support is key to a better customer experience, and it can handle their needs effectively.
Build a High-Impact Shared Services Center with Remunance
Streamline operations, reduce costs, and improve efficiency across IT, HR, finance, and more with a well-structured Shared Services Center. Remunance helps you build and manage SSCs that scale with your business.
India: A Key Destination for Shared Services
India has been a key destination for setting up shared service centers for years due to its unique opportunities.
Cost efficiency and talent availability are key factors that drive global companies to establish SSCs in the country.
Amazon, American Express, Thomson Financial, Siemens, GE, Marriott, British Airways, Citigroup, HSBC, Bank of America, Barclays, Deloitte, AT&T, Compaq, Ford, Ericson, Cigna, Lucent, and Dell are major companies with shared service centers in India.
The country has a large English-speaking population, and its geographical location provides 24/7 service support, making it a global hub for customer service centers.
Let’s elaborate on key factors that create a favorable business environment for shared services in India.
Talent Availability
Once you decide on the location, finding the right talent or highly skilled workforce is key to a successful SSC setup.
India has a vast talent pool with professional skills across industries such as IT, banking & finance, healthcare & pharmaceuticals, human resources, engineering & architecture, and customer care services.
Most Indian professionals communicate in English, making it easier for global companies to set up SSCs in the country.
International clients and company stakeholders can easily connect with Indian talent due to their language proficiency.
Low Operational Cost
Hiring costs for Indian professionals are affordable and much lower than in Western countries.
Also, except for some major metropolitan areas like Mumbai and Delhi, the costs of setting up and maintaining an office in major Indian cities are cheaper than in major global cities.
Additionally, the Indian government provides a range of incentives, such as subsidies and tax breaks, to foreign companies establishing SSCs in the country.
These are key reasons for reducing the overall operational costs of having shared services in India.
Economic and Political Stability
With impressive economic growth and a stable political climate, India offers a favorable business environment for global companies.
Being one of the fastest-growing economies globally, the country provides a stable environment for long-term business planning and attracts foreign investment.
Given its robust banking and financial systems, India emerged as the preferred destination for finance-sharing services and a haven for business operations despite global economic uncertainty and escalating geopolitical tensions.
India’s friendly relations and existing international trade agreements with major global economies make it easier for global companies to start providing services.
Unique Opportunities of Using EOR for Shared Services in India
Global businesses often outsource to third-party experts or form a subsidiary to provide shared services.
Compared to business models like outsourcing and subsidiary incorporation, Employer of Record, or EOR, is a relatively new model in India that offers the most economical employment arrangement.
EOR offers unique benefits for global businesses having multiple operational units across diverse geographical locations.
Unlike outsourcing, an EOR builds a new team of experts related to your service requirements and ensures you have better control and management over your team.
When using EOR services, you don’t need to form a subsidiary company for your service operation and avoid the fund blockage required in subsidiary incorporation.
Also, you don’t require upfront capital investment to work with an EOR partner.
Here are the insights into EOR’s unique offerings for businesses planning to establish shared services in India.
Recruitment
Hiring a remote workforce with the right talent for shared services in India can be daunting and time-consuming.
EORs have a deep knowledge of the local job market, employment practices, and cultural nuances of hiring Indian talent.
EORs have established networks and follow streamlined recruitment processes that reduce the time and effort required to hire new employees.
Your EOR partner takes full responsibility for recruitment, including scouting, shortlisting, and interviewing potential candidates for onboarding.
Compliance Assurance
Navigating regulatory compliance when establishing an SSC in a foreign jurisdiction like India can be challenging for global businesses.
You must ensure that all employment practices and service operations comply with the local laws and regulations.
However, this is easy when you’ve got an EOR partner, as EORs take sole responsibility for handling compliance matters, such as tax and payroll, on your behalf.
EORs have a dedicated legal team that keeps abreast of new updates in local labor laws and employment regulations.
With EOR support, you can operate your service with minimal legal and compliance risks.
Payroll & Employee Benefits Administration
Handling the payroll and benefits for your employees in India comes easily with EOR services support.
EORs handle payroll processing and taxation for your team in compliance with local laws and regulations to ensure employees receive their monthly salary on time.
Also, EORs offer competitive benefits packages, including medical benefits, health insurance, retirement plans, and other incentives, to ensure employee job satisfaction and retention.
IT & Office Infrastructure Support
Setting up a shared service center in India requires IT support and office infrastructure setups.
Once you decide on a location for your service center, EORs help you find an office space and set up office infrastructure for your employees in the target city.
Also, EORs provide a range of IT support services, including purchasing devices and delivering them to your employees.
Moreover, EORs offer flexibility in service offerings that enable quick adjustments to your IT and office requirements as business needs change.
Expat Transfer Support
With EOR support, you can install your team for shared services in India under the guidance of your senior employees.
EORs provide logistics support such as work permits and visas, as per compliance with immigration laws.
EORs ensure a smooth relocation of your employees and their families by providing quick and effective expatriate transfers.
Launch Your Shared Services in India with an EOR—Fast & Compliant
Set up and manage shared services in India without forming a subsidiary. With EOR support, you get compliant hiring, payroll, infrastructure, and operations—all handled seamlessly and cost-effectively.
Conclusion
Shared services are needed more than ever, as global companies increasingly seek to expand their operations across geographies to pursue new business opportunities.
The rapid integration of advanced technologies in shared service centers has improved service delivery efficiency, transparency, and cost reduction across operational units.
Finding a location with lower operational costs and the availability of the right workforce are critical to the successful operation of shared services.
Due to cost-efficient operations and a pool of talent, India has become a global hub for various SSCs, including customer care services.
EOR services provide an all-in-one solution for global companies to ease talent hiring in India.
Provide compliance assurance, execute payroll & employee benefits, support IT & office infrastructure, and facilitate expat transfers to ensure a smooth assembly of a remote team and the successful operation of shared services in India.
About Remunance
Remunance is an Employer of Record (EOR) services provider in India, helping global companies hire, manage, and support full-time employees without setting up a local entity. We take care of HR, payroll, compliance, and benefits so businesses can focus on growth while building their teams in India with confidence.
Remunance enables businesses from UK, Australia, Canada, France, US, and the Middle East to recruit, hire, and manage workforce and benefits in India.
