India has solidified its position as the premier destination for U.S. CPA firms seeking talented accountants. Notable CPA firms like RSM and BDO have expanded into multiple cities, significantly increasing their workforce over the past few years. Following their example, many mid-size firms with annual revenues between $15M and $100M have also set up offices in the country. This trend is driven by the dwindling availability of CPAs in the U.S. combined with the decreasing costs associated with setting up offices in India.
When the exploration into opening an office in India begins, one of the primary questions U.S. CPA firms must consider is who will lead their India operations. The Director of Operations of this overseas component will be responsible for everything that happens in that office, but where will they be located—in India, or in the U.S.?
There are benefits and drawbacks to both of these options. In this article, we will explore the pros and cons of hiring an India-based leader for your India team.
When you hire someone in India to run the India office, they report back to the practice leaders—the heads of Tax and A&A, for instance—at the U.S. headquarters, as well as to the Managing Partner in charge of overall performance.
The Benefits of Hiring an India-based Leader
The talent pool in India is rich in skilled professionals who will make excellent leaders, and selecting your Director of Operations from this pool is a time-tested approach. Their responsibilities, such as culture-building and developing and maintaining the team’s performance, will benefit from having this person on the ground at the India office. More specifically, they benefit from a familiarity with the standard processes of both the industry and the region.
Furthermore, having your leader on the ground makes the hierarchy, an important concept in Indian culture, crystal clear. For your India accounting team, seeing and interacting with the leader to whom they report every day has a significant positive impact on both performance and morale.
The Challenges of Hiring an India-based Leader
The biggest drawback to the local leader approach of running your India office is the cost. Though it might surprise you, hiring a Director of Operations in India will be as, if not more, expensive than hiring for this position in the U.S. At this senior level, qualified accounting candidates in India will require salaries at least on par with U.S. leaders in the industry.
You may have heard that it is difficult to retain skilled professionals in some cities in India. This challenge extends to senior management, especially in light of the rapid influx of CPA firms opening offices in this country. Every company that establishes an office in India is seeking a skilled Director of Operations, and the likelihood that your candidate will be coaxed away or strike out on their own is high. Similarly, replacing that hire will be difficult, time-consuming, and likely costly in itself.
Should Your Firm Hire an India-Based Leader?
If you are hoping to establish an office in India and then adopt a largely hands-off approach, hiring an on-location leader may be the right choice.
Once a suitable individual has been installed and the goals of the organization have been made clear, you can feel confident stepping back and letting them run things in India. If you have the resources to ensure their current position remains their most promising and lucrative offer, you will benefit from a dedicated and capable manager overseeing every aspect of this branch as it flourishes.
If hiring an India-based leader does not suit your plans for your India office, our article on Hiring a U.S.-based Leader To Run Your India Office offers helpful insight into an alternative approach.
