From Chaos to Control: A Tale of Transitioning from Outsourcing to EOR

One day, I received an email with a straightforward yet intriguing request: “I understand you have experience helping foreign companies in India. I’d like to discuss a problem I’m facing with my outsourcing vendor.” Intrigued, I promptly scheduled a call with Jeff, the sender.

During the call, Jeff explained his situation. He had been working with an outsourcing firm in North India for over two years. Over that time, he had built a team of close to 20 people, including some highly skilled senior members who effectively shepherded the team. Jeff was happy with their output and deeply valued the senior resources who kept the team aligned.

However, the outsourcing model came with significant challenges. Attrition among mid- and junior-level team members was alarmingly high, forcing Jeff to invest time and resources in retraining replacements. Frequent rework disrupted project timelines, and Jeff suspected the compensation paid to employees was disproportionately low compared to what he was paying the vendor. The senior resources, though dedicated, were stretched thin, doubling up to train and mentor new hires.

Jeff didn’t want to establish a subsidiary due to the high costs and complexities. At the same time, he was keen to retain the team he had painstakingly built. So, he asked me if there was a better solution.

I suggested exploring the Employer of Record (EOR) model. Jeff wasn’t familiar with how it worked, so I walked him through the process and its benefits—retaining his team, gaining operational control, improving employee satisfaction, and reducing costs. He was intrigued and decided to test the waters by consulting with his senior team members.

I later joined Jeff in a call with the team leaders. They had plenty of questions—about legalities, job security, continuity, and changes to their roles. While I could address most concerns, the legal aspect required a detailed review of their appointment letters. I collaborated with a labor lawyer, who confirmed that transitioning to EOR was legally feasible.

With the green light, I presented a step-by-step transition plan. I outlined how their compensation and benefits would improve, proposed enhanced insurance plans, and suggested refined employee policies. Transparent communication and addressing every doubt instilled trust among the team. Jeff also ensured that the team’s questions and requests were heard and addressed, reinforcing confidence in the new arrangement.

Over multiple rounds of discussions, the leadership team gradually engaged the rest of the group. Employees who were ready to make the switch transitioned to the EOR model one by one. Within six months, the team stabilized. Jeff hired new members to strengthen the group further, creating a solid, cohesive unit.

The results spoke for themselves. The client reduced costs, employees received better salaries and benefits, and the team operated with enhanced morale and efficiency. The transition from outsourcing to EOR turned out to be a win-win situation for everyone involved—a shining example of how the right model can transform business challenges into success.