In recent years, India has emerged as a sought-after destination for U.S. CPA firms seeking to bolster their accounting teams with skilled professionals. Driven by a lack of qualified U.S. accountants and the promise of affordable, skilled professionals overseas, mid-size firms with annual revenues ranging from $15M to $100M are following in the footsteps of the many industry leaders already reaping the benefits of this transition.
When a CPA firm is preparing to open an office in India, the leadership structure is a major consideration. The individual in charge of the India office must take responsibility for every aspect of running that team, so their location—on the ground in India or at the U.S. headquarters—is a decision that should not be made lightly.
The ideal location of your firm’s India office Director of Operations depends on a few factors. In this article, we will explore the pros and cons of hiring an India leader who works out of the U.S.
This approach entails a division of the leadership roles between the two countries, with the senior managers or VPs of the tax and A&A departments in India reporting back to your head of operations in the U.S. This person, in turn, will report to the individual Practice Leaders and the Managing Partner.
The Benefits of Hiring a US-based Leader
When your leader is located in the U.S., your firm maintains much more control over what is happening with the India team at every level, which enables them to keep abreast of how the office is performing. As a result, any problems that arise can be identified and fixed promptly.
It may surprise you to learn that there are cost and retention benefits to hiring your India office lead in the U.S., as well. Though salaries in India are lower in general, US CPA firm leaders in India are a hot commodity and are therefore getting paid at par, if not more than their US counterparts. Therefore, hiring your India leader in the US will likely be less expensive.
While any company must make efforts to retain their leadership team, the risk of losing a high-ranking India-based staff member to another CPA firm opening their overseas office is high. Here in the U.S., this particular competition is more manageable.
The Challenges of Hiring a US-based Leader
There are many benefits to hiring your India team leader in the U.S., but some difficulty can also arise from this approach.
Though the communication between the India office leader and the rest of your management team will be simpler, the communication between the office leader and the team they are leading could be adversely impacted by the distance between them.
A U.S.-based leader may lack the cultural context that comes from living in India, and the hierarchy that is such a significant part of Indian society can be more difficult to establish when the person in charge is many miles and time zones away. Odd hours and travel are also essential parts of a U.S.-based position. The Director will have to work early mornings or late nights to accommodate India’s time zone, and their role will require quarterly on-site visits.
Should Your Firm Hire a US-based Leader?
If your firm desires tight control over the inner workings of your India office, particularly in its first few years of operation, hiring your leader in the U.S. may be the best approach. The time zone and cultural similarities between this leader and the rest of your U.S.-based team will facilitate more expedient and accessible communication as you navigate the hurdles of solidifying your presence and processes in a new country.
If, however, you plan to adopt a more hands-off approach to running your India office, our article on Hiring a Leader in India To Run Your India Office outlines our expert perspective on the benefits of this alternative option.
