Quick answer: Lateral hiring means recruiting experienced people from other organisations into a similar or more senior role, instead of training freshers. In India a lateral hire usually has a contractual notice period to serve or buy out, an existing PF account to carry over through their UAN, and a counter offer to resist. Each adds cost and time.
- A lateral hire keeps one Universal Account Number (UAN) across jobs, so their PF moves with them.
- Since April 2025, most PF transfers on a job change no longer need the employer to approve.
- New hires can give the new employer salary details from a previous job in the same tax year under section 392(4) of the Income-tax Act, 2025.
- A post-employment non-compete from the old employer is void under section 27 of the Indian Contract Act, 1872.
How is lateral hiring different from campus hiring?
Experience in, training out. You pay for skills someone else has already built.
Campus hiring brings in graduates in batches, on the college’s timetable, with months of training ahead. Lateral hiring fills one role at a time, at any point in the year, with someone who can contribute within weeks.
The catch is the wait and the price. Lateral entry at mid or senior level in Indian tech usually means a 60 or 90-day notice period and a salary jump on the candidate’s current pay. Our comparison of hiring internally vs externally weighs the trade-off.
What does a lateral hire really cost in India?
The offer is only the start. Notice, a buyout and a possible counter all sit on top.
Let’s say you hire a Bengaluru engineering lead now on ₹24 lakh a year. You offer a 30% rise, so ₹31.2 lakh, or ₹2,60,000 a month gross. She has 90 days’ notice and her employer agrees to release her after 30.
| Item | Amount |
|---|---|
| New annual CTC | ₹31,20,000 |
| Two months’ shortfall at her current pay (₹2,00,000 a month) | ₹4,00,000 |
| Joining bonus you offer to cover it | ₹4,00,000 |
| First-year cash cost before employer PF and gratuity | ₹35,20,000 |
So the first year runs about 13% above the headline offer. Not small.
A notice period buyout funded through a joining bonus is taxed as salary in her hands, so many employers cap it or gross it up only partly.
What should you check before day one?
Four items, all routine.
- Her relieving letter, or an accepted resignation if it has not arrived yet.
- Her UAN, so PF continues on one account.
- Salary already paid this tax year, so TDS is right from the first month.
- Any training bond or in-term exclusivity clause still binding her.
How does lateral hiring work under an EOR?
The EOR employs the lateral hire and takes over the paperwork.
It issues the appointment letter, links the existing UAN, takes previous-employer salary details for TDS and pays any buyout or bonus you approve. You run the search and set the pay with salary benchmarking.
How does Remunance onboard lateral hires for your India team?
Remunance runs background verification, UAN linking and TDS set-up for each lateral hire, then pays salary from its Indian entity at a flat fee from USD 99 per employee per month. We are ISO/IEC 27001:2022 certified, so the CVs, payslips and PAN details you share stay protected. See our ISO certifications, then book a lateral hiring consultation.
What else do people ask about lateral hiring?
What is the lateral hiring meaning in HR?
It is recruiting someone with relevant experience from another organisation into a peer or senior role. The opposite is entry-level or campus hiring.
Is lateral hiring better than internal promotion?
Neither is better everywhere. Lateral hires bring new skills and outside knowledge, while internal moves are faster and keep loyalty, so most teams mix both.
Does a lateral hire need a new PF account?
No. One UAN follows the person for life, and an Aadhaar-validated member can even correct their own profile online, as the Labour Ministry’s January 2025 EPFO release explains.