How Companies Avoid Bench Costs by Moving Employees to India EOR Payroll

Introduction: The Cost of Bench Time for U.S. Employers

In today’s competitive business environment, bench costs are a hidden expense for many U.S. employers, especially those dependent on global talent. When employees are stuck in the visa process—whether it’s for H1-B or other work-related visas—they often end up on the “bench.” This means they’re being paid without contributing to the company’s productivity, which leads to escalating costs without any return on investment.

The problem becomes even more challenging when companies hire Indian employees who are caught in visa delays. While waiting for their visa approvals, employers are still required to pay them, but they cannot use their skills for company projects. This situation can create a significant financial strain.

However, there’s a solution that can help U.S. employers reduce these costs and keep their employees engaged—India EOR payroll.

What Are Bench Costs and Why Should Employers Care?

Understanding Bench Costs

In simple terms, bench costs occur when employees are on the payroll but are not actively contributing to the organization’s output. Whether due to visa delays or being between assignments, bench time results in:

Salaries Paid Without Output: Employees on the bench continue to earn their full salary without providing the expected value or completing work.
Project Delays: The inability to deploy workers as planned can delay key projects, leading to unmet deadlines and frustrated clients.
Employee Morale Issues: Being stuck without a role or tasks for long periods can result in disengagement and frustration, lowering overall job satisfaction.

For companies relying on foreign talent, especially Indian employees who often face visa delays, these bench costs can stretch into months, further complicating the situation.

How India EOR Payroll Helps Reduce Bench Costs

India EOR Payroll: The Ultimate Solution

India EOR payroll offers a cost-effective solution to manage employees stuck in visa delays. By utilizing Employer of Record (EOR) services, U.S. employers can shift payroll to India, continue paying employees in compliance with local laws, and keep them engaged without the financial burden of bench time.

Here’s how it works:

Legal Employment in India: Through India EOR payroll, U.S. companies can legally employ workers in India, even while they are waiting for their visa approval in the U.S. The EOR provider assumes the legal responsibility of being the employer, handling payroll, taxes, benefits, and compliance with Indian labor laws.
Reduced Payroll Costs: The labor cost in India is typically 50-70% lower than in the U.S. For example, a software engineer in India could earn around $20,000-$30,000 per year, compared to the $60,000 or more they would earn in the U.S. Shifting payroll to India reduces the financial strain caused by bench costs.
Continued Productivity: Employees can continue to work remotely from India, contributing to projects, internal work, or tasks that align with the company’s goals. This way, companies don’t lose valuable time or resources while waiting for visa approval.

Breaking Down the Costs: Paid Leave vs India EOR Payroll

Let’s compare the costs of paid leave versus shifting to India EOR payroll.

Paid Leave for Visa-Delayed Employees:
- An employee earning $60,000 annually who is on paid leave for 3 months costs the company $15,000. In addition to salaries, there are also administrative costs, benefits, and potential project delays to consider.
India EOR Payroll Solution:
- By shifting payroll to India EOR payroll, the company can pay a similar employee in India between $20,000-$30,000 annually.
- This results in substantial savings while maintaining employee engagement and productivity.
- Employees continue to contribute, and the company avoids the risk of losing talent or facing employee dissatisfaction.

In this scenario, shifting payroll to India through EOR services allows companies to reduce labor costs while still keeping their workforce engaged and compliant.

The Additional Benefits of India EOR Payroll

Access to a Highly Skilled Workforce

India is home to one of the world’s largest and most educated talent pools. Whether your company needs software developers, IT professionals, or customer support agents, India EOR payroll opens the door to highly skilled professionals who can contribute to your business at a fraction of U.S. labor costs.

By utilizing India EOR payroll, U.S. employers can:

Expand their team quickly by hiring professionals who are available and ready to contribute remotely.
Scale up operations without the need for extensive legal and tax compliance management, as the EOR takes care of these aspects.

Compliance with Local Labor Laws

Employing workers in India without a local entity can create compliance headaches for U.S. employers. However, India EOR payroll services handle all aspects of legal compliance, ensuring that the employment terms, taxes, and benefits adhere to Indian labor regulations. This removes the burden of managing compliance across borders and mitigates the risk of legal issues.

The Risks of Not Exploring India EOR Payroll Solutions

Financial Strain Over Time

Continuing to rely on paid leave for employees stuck in the visa process can create a growing financial burden. The longer the delay, the higher the costs, and the greater the chance that productivity will be impacted. For companies with several employees stuck in visa delays, the long-term cost of bench time can result in significant losses.

Talent Loss and Employee Disengagement

When employees are stuck in visa delays without contributing to the company’s work, disengagement is inevitable. Employees may lose motivation and start seeking opportunities elsewhere, leading to increased turnover and the loss of valuable talent. By shifting payroll to India EOR payroll, employees remain employed, motivated, and productive, which reduces the risk of turnover.

Conclusion: A Smarter, Cost-Effective Solution for U.S. Employers

Visa delays for Indian employees can create a significant bench cost for U.S. employers. However, by shifting payroll to India EOR payroll, you can drastically reduce those costs, maintain employee engagement, and ensure business continuity.

At Team Management Services (TMS), we provide expert Employer of Record (EOR) services that allow U.S. companies to seamlessly shift payroll to India, avoiding bench costs and ensuring compliance with local labor laws. Our India EOR payroll solutions help you keep employees engaged and productive during visa delays, saving on payroll costs and reducing administrative overhead.

For more information on how India EOR payroll can benefit your company, check out our blog on Entity Setup in India: The Quick, Compliant Alternative to U.S. Visa Dependence

FAQs

Are there any legal or compliance risks when moving payroll to India?

EOR services manage compliance with both Indian and U.S. labor laws, reducing legal risks for companies.

What types of roles can be shifted to India payroll?

Roles in IT, customer service, marketing, software development, and finance can be moved to India payroll via EOR.

What happens if the employee’s H1-B visa is approved after moving payroll to India?

The employee transitions back to U.S. payroll once their visa is approved.

How long does it take to set up an India payroll system through EOR?

It typically takes a few weeks to set up India payroll via EOR, depending on the company’s needs.