87% of companies worldwide say that they have a skill gap, or expect to have a skill gap over the next few years. The logical solution to this problem? Building globally distributed teams.
In the last few years, rapidly expanding businesses have leveraged the multiple benefits of recruiting across geographies. In order to assist you with your location strategy, we look at the top 4 emerging technical hubs globally and compare the essential hiring considerations.
Poland
Often referred to as the “Silicon Valley of Europe”, Poland is one of the fastest growing technical hubs in the world. Poland’s robust educational system, focusing on core mathematics, science, and engineering knowledge is the perfect recipe for highly skilled tech talent.
Another favourable factor is the country’s strong startup ecosystem. With over 37 tech parks, a strong business infrastructure, and equality supportive governmental policies, Poland has become the most desired hiring location for numerous businesses.
Terms of contract
An employment contract should be concluded in writing. Otherwise, the parties, contract type, and terms and conditions must be confirmed by the employer in writing at the latest on the work commencement date. According to the country’s labour code, the contract must specify:
- Parties to the employment contract
- Employment contract execution date
- Type of employment contract
- Work commencement date
- Type of work
- Place of work
- Remuneration for work corresponding to its type, and a list of the remuneration components
- Working hours (full-time or part-time)
- Holiday entitlement
- Notice period
- Place, date and time of remuneration payment
- The procedures for confirming arrival and presence at work and justifying absence from work
Working hours
- The number of working hours cannot exceed 8 hours a day and an average of 40 hours per week in an average five-day working week. Under certain conditions, daily working hours can be extended and balanced by shorter daily working time on other days or by days off.
- As a rule, overtime must not exceed 150 hours per employee in any calendar year. However, a collective work agreement, work rules or, in the absence of these, an employment contract, can provide for a higher overtime limit. In this case, employees’ weekly working hours, including overtime, cannot exceed an average of 48 hours a week.
Minimum wage
The minimum monthly wage in Poland is PLN 2,600 (EUR 585) to PLN 2,800 (EUR 630).
Benefits
Mandatory employee benefits in Poland include pension (PPK), social insurance, and occupational medicine (OM). Supplementary employee benefits in Poland include private medical insurance, life insurance and business travel insurance.
Pension
Since 2019, pension is mandatory for all employers in Poland. The new law is called Employee Capital Plan (PPK) and was introduced by The Polish Government to increase savings of the local nationals.
Social security
In Poland, social security consists of pension insurance, disability insurance, accident insurance, labour fund and sickness insurance. Both the employer and the employee are obligated to contribute to the Polish social security system. The employer is obligated to withhold the employee‘s share of the social security contributions and remit them to the Social Security Authorities (ZUS).
Occupation Medicine
Every employer is obligated to conduct occupation medicine examinations for their employees. It involves tests to determine an employee’s individual predispositions to work in a specific position under certain conditions. In this regard, account is taken of any harmful and onerous factors in a given working environment.
Leave policy
- Public holidays – 13
- Annual vacation – 20 days (for employees with less than 10 years of experience) and 26 days (for employees with over 10 years of experience.)
- Sick leave – 33 days for employees under 50, 14 days for employees over 50. Employers must pay their sick employees at least 80 percent of their remuneration for a certain number of days before the Polish Social Security Office (ZUS) takes over.
India
With over 340 million people having access to the internet, India is the second most connected country after China. The city of Bengaluru and the surrounding state of Karnataka is also the world’s 4th largest technology and innovation cluster, and home to more than 400+ global R & D centers. Out of 25 Fortune 500 retailers, about 10 have set up technology shops in India in the form of GCCs or global capability centers. According to Nasscom, the number of GCCs in the country is expected to grow at a CAGR of 6-7 percent to over 1,900 by 2025.
India’s universal digital literacy and deep internet penetration play a huge role in making it a highly accessible tech market. With 3.1 million students entering the workforce annually, the country’s sheer numbers give it a definite advantage. Along with the tech hubs of Bangalore and Hyderabad, India is now extracting the tech potential of tier 2 and 4 cities like Indore, Vadodara and Kochi, among others.
Employment contracts
Labour law and employment in India requires the work relationship to be based on an employment contract. When recruiting or hiring contract must include all relevant details such as:
- The identities of the parties
- The date of contract and commencement of work
- Term of work
- Roles and responsibilities
- Salary
- Working hours
- Holidays
- Termination details
Working hours
The average work week in India varies between 40 to 48 hours, depending on whether its a 5 day or 6 day week. Overtime is paid at double the rate of the normal pay.
Minimum Wages
India offers the most competitive labour costs in Asia, with the national-level minimum wage at around INR 176 (US$2.80) per day, which works out to INR 4,576 (US$62) per month. However, specific minimum wages vary on the basis of industry and geographical location.
Leave policy
- Public holidays – 3
- Vacation days – 15 paid annual vacation days. A maximum of 30 vacation days can be carried over to the next year.
- Sick leave – 15 paid sick leave days a year and receive 70% of their average daily wage.
- Maternity leave – 26 weeks paid leave, or 12 weeks paid leave in case of 3 or more children.
- Parental leave – No mandatory leave, government employees receive 15 days.
- Casual leave: provided for urgent and unexpected matters. Casual leaves can typically range from 12 to 24 days annually.
- Work-related injury leave: Work injury benefits come from the contributions made towards the employees’ compensation and employees state insurance. Temporarily disabled workers receive 50% compensation monthly.
Benefits
- Employee Provident Fund: The EPF scheme aims to build a sufficient retirement corpus for an individual. For every company with over 20 employees, employers need to contribute 12% of the employees’ basic salary.
- Gratuity: All employees engaged in establishments with over 10 employees, having rendered continuous service for not less than 5 years (except in the case of death or disability) receive a gratuity payment from their employer at superannuation, retirement or resignation, or death or disablement. Gratuity is calculated at 15 days’ wages multiplied by the number of years of service.
Vietnam
At around 20%, Vietnam has the distinction of being one of the few countries to channel the biggest share of government spending in the education sector, which towers over the global average of 14%. Vietnam also gives out supporting policies, tax incentives, and favourable laws, creating an ideal environment for hiring your global team.
Let’s take a look at the specifics:
Employment contracts
Employment contracts in Vietnam are either for an indefinite period, for 12 to 36 months, or fixed term contracts, for less than 12 months. An employment contract should include key terms of the employment relationship including:
- Name and address of employer
- Name, address, date of birth of employee
- Description of job and working address
- Time frame of the contract
- Salary, payment type, date of payment, allowances and other benefits
- Promotion and salary review system
- Working hours and vacation
- Details of social and medical insurance
Working hours
- The standard work week in Vietnam consists of up to 8 hours per day, 48 hours per week.
- Overtime cannot exceed 50% of regular working hours per day, 30 hours per month and a total of 200 hours per year. In special cases regulated by the government, the yearly maximum can be increased to 300 hours per year. Pregnant women who are in their 7th month or later or women with babies under a year old are not permitted to work overtime.
- Overtime pay:
- The employee is paid 150% of salary on normal working days
- The employee is paid 200% of salary on scheduled days off
- The employee is paid 300% of salary on public holidays
Minimum Wage
Minimum wage in Vietnam is divided into the following categories:
- Common minimum wage – VND 1,490,000 (~US$64) This is used to calculate salaries for employees in state-owned organizations and enterprises, as well as to calculate the social contribution for all enterprises.
- Regional minimum wage – used for employees in all non-state enterprises based on zones as defined by the government. Divided across 4 regions, this can range between VND 2,920,000 (US$ 125) to VND 4,180,000 (US$180).
Benefits
Vietnam has the standard requirements when it comes to employee benefits – employers need to provide compulsory social, health, and unemployment insurance. Employers usually withhold employees’ contributions from their salary and directly transfer them to insurance companies.
Companies with more than ten employees should make a mandatory contribution to unemployment insurance. Foreign nationals with local employment contracts have mandatory contributions only towards health insurance.
- Social Insurance – 17.5 % (Including accident, retirement, sickness & maternity and gratuity contributions.)
- Health Insurance – 3%
- Unemployment Insurance – 1.00%
Additional benefits
Some employers provide a 13th-month salary as a bonus. Others provide additional days of leave per year, and even private health insurance.
Paid time off
- Public holidays – 16
- Annual leave – 12 vacation days of leave per year.
- Sick leave – 30 days (if they have paid the Social Insurance Fund for less than 15 years) and 60 days (if they have paid more than 30 years to the Fund). Employees are entitled to 75% of their salary for sick leave pay.
- Maternity leave – paid maternity leave for 6 months, which increased by 1 month for each additional child. Employees receive 100% of their regular salary, paid by the Social Insurance Authority. Salary during the maternity leave period is capped at VND 29,800,000.
- Paternity leave – can range from 5 to 14 days. New fathers receive 100% of their regular salary paid by the Social Insurance Authority.
- Other leave – employees can take 2-3 days of paid leave in the event of a wedding, or a death in the family.
Indonesia
The past few years has seen Indonesia emerging as one of the biggest tech giants of Southeast Asia. The country offers great potential for entrepreneurs who need excellent tech talent, a supportive tech ecosystem to build their remote teams, and accelerated market penetration.
Employment contracts
Employment contracts can be either for a fixed term or of an unspecified duration (usually limited to 2 years, after which they must be renewed).
Fixed-term employment contracts must be written in Bahasa, the official language of Indonesia. If not in writing, fixed-term employment contracts are deemed indefinite-term employment contracts.
All employment contracts should specify:
- Job responsibilities
- Salary in Indonesia Rupiah (Rp)
- Benefits
- Rules around termination
Working hours
- The average work week is 40 hours, which can be divided over 5 or 6 days.
- Any work beyond the 40 hours in a week is considered overtime. An employee can perform overtime work for a maximum of 4 hours per day and 18 hours per week.
Leave policies
- Public holidays – 16
- Annual leave -12. All employees are entitled to an off on ‘Cuti Bersama, intended to encourage domestic tourism
- Sick leave – no specific number. As per Indonesian law, Employees receive the following sick leave allowance if they provide medical confirmation:
- Full salary for the first 4 months of sick leave.
- 75% salary for the next 4 months
- 50% salary for the 4 months following
- 25 % thereafter until the employer terminates the employee contract
- Maternity leave – 3 months of maternity leave ( employees receive their full salary during this period.)
- Parental leave – Employees are entitled to 2 days of parental leave for marriage, death, baptism and circumcision.
- Menstrual leave – Female employees can take leave on the first and second days of menstruation.
Minimum wage
The minimum wage varies from region to region and ranges from IDR 1,798,979 (USD 123.85) in Central Java to IDR 4,416,186 (USD 304.04) in DKI Jakarta. Find a detailed list of region wise minimum wages here.
Benefits
Health Insurance: With rising health costs, health insurance is the most attractive employee benefit in indonesia. Employers contribute the following percentages for employee insurance:
- Health Insurance – 4.00%
- Old Age – 3.70%
- Pension – 2.00%
- Death – 0.30%
- Work Accident – 0.24% – 1.74%
Additional benefits
Employees receive a yearly payment called the Tunjangan Hari Raya (THR) payment, before their longest religious holiday. THR is a one-time salary for employees who have been with the company for 12 months. If the employee has been working at the company for less than 12 months, they receive an amount proportional to the length of their employment.
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