Turnover is common when offshoring to India, but with the right hiring, onboarding, and retention strategies, firms can manage it effectively. This article explains why turnover happens, how it differs from the US, and what firms can do to reduce its impact.
Turnover is a reality in offshore markets like India. While it may seem disruptive at first, it is a challenge that firms can successfully manage with foresight and structure. Offshore operations are often dynamic environments, and transitions are part of that reality.
Rather than viewing turnover as a sign of failure, it helps to recognize it as a normal feature of growing global teams. By putting the right systems in place - including thoughtful hiring practices, structured onboarding, and retention strategies - your firm can handle turnover smoothly and maintain continuity, even in periods of change.
There are two primary reasons for high turnover in India:
In India, especially early in a professional's career, it is common and socially acceptable for employees to switch jobs frequently. Unlike in the US, where staying with one employer for several years can be seen as a sign of reliability, young professionals in India often see frequent moves as a way to grow, learn, and accelerate their careers. There is little cultural pressure to remain with one company long term.
The competition for talent in India, particularly for professionals trained in US tax, is fierce. CPA firms, outsourcing agencies, and Big 4 firms are all recruiting from the same pool. Many firms are willing to offer higher pay to poach employees because, even with the increase, they still save significantly on salaries compared to hiring in the United States. As a result, compensation has become a key driver of job switching. According to a Deloitte study, salary is the number one reason why employees in India change jobs.
Turnover in India plays out very differently than in the United States, and understanding this difference is key to setting realistic expectations and planning accordingly.
In the US, losing an employee often means dealing with months of vacancy. The hiring pipeline is slower, the talent pool is smaller, and the time to onboard and train a new employee is long. As a result, every departure can feel like a major disruption.
In India, the situation is quite different. While you may still experience turnover, most positions can be refilled relatively quickly. There is a larger pool of candidates already trained in US accounting practices, and replacement timelines are significantly shorter. The challenge is less about the time it takes to find someone and more about how quickly they can be brought up to speed.
Understanding these differences will help you better design your hiring and retention strategies, build realistic timelines for backfilling roles, and reduce anxiety when turnover does occur.
Offshore firms should generally expect turnover rates between 10 and 20 percent. A 20 percent annual turnover rate is typical for most firms. Firms that go further by investing in strong processes, clear career paths, and thoughtful retention strategies often see lower turnover, closer to 10 percent. However, if your turnover exceeds 20 percent consistently, it may be a sign that your approach to hiring, training, or employee engagement needs rethinking.
Here are practical and proven ways to manage offshore turnover without losing momentum or compromising quality:
The first and most important step is mindset. Offshoring success does not come from eliminating turnover - it comes from planning for it. Even the best culture and compensation packages will not prevent all attrition. The market dynamics in India make some level of turnover inevitable. By expecting it and building your systems around it, you reduce the element of surprise and improve your ability to respond quickly.
Not all turnover is created equal. Some employees add outsized value and should be prioritized. Identify your top performers early and focus on keeping them engaged. Make sure they are well compensated, offer performance-based bonuses, and check in with them regularly to understand their goals. At the same time, do not feel obligated to retain every employee. If someone is not a great fit or underperforming, it is okay to provide standard raises (or skip it altogther) and let natural attrition run its course. In India, a raise below 10 percent often signals a cue for employees to explore other options.
One of the most effective ways to reduce future turnover is to avoid it at the hiring stage. Pay close attention to the type of candidate you are attracting. Some offshore candidates are looking for high-growth, private equity-style career acceleration. Others value steady, long term work and learning opportunities. If your firm is focused on sustainable, organic growth, make sure your screening process reflects that. Candidates who are misaligned with your growth pace will likely leave when their expectations are not met.
Turnover becomes much more manageable when you can onboard new hires quickly and consistently. A structured onboarding process reduces dependency on individual employees and helps new team members become productive faster. Create video-based training for core processes, client expectations, and internal tools using platforms like Loom. Build a knowledge base with SOPs and documentation, especially for unique client requirements or department workflows. This investment pays off every time someone new joins your team.
Incorporate a 60 day notice period into your India employment contracts. While this may feel inconvenient when hiring, it becomes a strategic asset when someone leaves. These 60 days give you a valuable window to recruit, hire, and onboard a new employee - ideally before the outgoing one departs. With proper planning, you can ensure continuity without creating gaps in service or delivery.
While turnover is high today, the landscape is shifting. The number of professionals in India pursuing US accounting credentials like CPA and EA is growing rapidly. More universities and private institutions are offering US tax and audit training, and more students are choosing accounting as a long term career path. As this pipeline expands over the next 2 to 3 years, the supply and demand imbalance will start to level out. This will ease salary pressure, reduce poaching, and improve retention across the board.
Turnover in India is not a dealbreaker. It is a manageable part of building a successful offshore operation. Firms that approach it with structure and foresight will see excellent results over time. By retaining your best people, hiring with alignment, onboarding well, and planning for the inevitable, you will build a stronger, more resilient offshore team.
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