India has long been celebrated as a technology hub, yet the latest Payoneer SMB Ambitions Barometer Report 2024 reveals that Indian small and medium-sized businesses (SMBs) are struggling to capitalize on the vast talent pool within the country entirely. According to the report, while global SMBs prioritize local hiring, with 57.1% of their workforce comprised of domestic employees, Indian SMBs lag significantly behind. Only 49.8% of their employees are hired locally, with a notably higher percentage of international hires (20.8%) compared to the global average of 17.4%.
This disparity highlights a growing challenge for Indian businesses that need to close the gap with global peers by utilizing more local talent. Encouragingly; the report indicates a positive shift: 73% of Indian SMBs plan to focus more on hiring within India, with an expected increase in local hires as they aim to bring on an average of 11 employees, half of whom will be from India.
Gaurav Shisodia, Payoneer’s Vice President for India, commented on the findings: “Our SMB Ambitions Barometer 2024 report reveals an intriguing paradox in India’s tech sector. Despite being at the forefront of innovation, Indian SMBs struggle to tap into local talent. While global expansion and remote hiring offer new opportunities, local expertise remains crucial for business success.”
The Payoneer report also sheds light on other trends shaping the growth of Indian SMBs:
AI as a Growth Catalyst: 61% of Indian SMBs believe artificial intelligence (AI) will help them gain global exposure and expand their market reach.
Focus on Regional Expansion: Indian SMBs are keen on expanding into South Asia (20%) and East Asia and the Pacific (19%) in the next five years, outpacing global averages of 11% and 12%, respectively.
Globalization and Cross-Border Transactions: Indian SMBs are expanding their client base internationally, with nearly 40% of cross-border transactions coming from the U.S. Other key markets include Australia, China, and the UK.
Despite the growth, challenges persist. 45% of Indian SMBs report difficulties in making or receiving cross-border payments, citing major hurdles in foreign exchange rates, trade compliance, and slow transactions. Additionally, language and cultural barriers (38%), economic instability (51%), and limited networks (41%) hinder their global expansion efforts.
For Indian SMBs to remain competitive, a balanced approach between local hiring and global expansion is crucial, as is developing a more robust infrastructure for cross-border payments and vendor relationships. Full Payoneer report here
