Startup Bankruptcy is a scenario wherein a startup is unable to maintain its operation due to a financial crisis. Many companies also fail by hiring the wrong people at more cost. This can be avoided when you approach an Employer of Record Services provider to manage all your payroll and legal procedures. It is an important risk to be handled in the journey of an entrepreneur particularly during the initial stages of a business venture when financial resources are limited and market uncertainties affect the company.

Many startups mainly depend on external funding sources such as venture capital, angel investment, or loans to sustain their operations. However many companies also fail due to improper staffing techniques or they are unaware of hiring strategies that can help them reduce resources spent on employees.

This article is for budding entrepreneurs and early-stage startups who are actively hiring staff to get their work done. In this blog, you can learn more about strategies to hire talent to avoid early bankruptcy and eliminate the depletion of funds.

Reasons for Early Bankruptcy

Before learning the strategies to avoid early bankruptcy, let us see a few reasons for startup failure in connection with hiring:

  • Financial Mismanagement due to Hiring: Poor financial planning, misallocation of funds, excessive spending, and lack of financial controls can quickly deplete startup resources.
  • Improper Hiring methods: This scenario is bringing new employees with more compensation into a company that is not effective or may cause problems. Also, the startup company may not be aware of hiring globally to reduce the cost and match the skill with the correct salary package.
  • Legal and Regulatory Issues: Non-compliance with regulatory requirements is also a main factor in startup failure. You can lose all your investments or funds due to this major mistake. If you hire international candidates you must be aware of all the legal documents like Employer of Record services agreement, contracts., etc, if not you can approach an Employer of Record services provider to manage all the legal procedures.
  • Operational Inefficiencies: Inefficient business processes, ineffective management practices, and operational bottlenecks can negatively affect productivity, erode profitability, and strain cash flow.
  • Market Disruption & Employee Management: Disruptions caused by unforeseen events such as natural disasters, global pandemics, and geopolitical tensions can disrupt supply chains, disrupt demand patterns, and destabilize startup operations, leading to financial distress. Hiring employees who are not robust in working flexibly and adhering to the environmental situation can affect the development of your business.


Hiring Strategies to Avoid Early Bankruptcy with Employer of Record Services.

A well-planned company in all aspects can succeed amidst many uncertainties. Here are some strategies to make a healthier environment when you start hiring or start training candidates.

  • Know What You Need: Figure out what kind of people your company needs to grow and stay within your budget.
  • Focus on Important Jobs: Hire people for jobs that are important for your business to work well. Don’t hire for jobs you don’t need.
  • Find People Smartly: Look for good employees without spending too much money. You can ask your current employees if they know anyone, check online job sites, or even use social media to find talented people.
  • Be Flexible with Work Hours: Sometimes, you don’t need full-time employees. You can hire freelancers, part-timers, or contractors to do specific tasks when you need them. Hiring in India with Employer of Record service providers can find you more talented people with low costs and high skills.
  • Pick People Who Fit In: When you hire someone, make sure they get along with the team and believe in what your company stands for.
  • Help Your Employees Learn: Make sure new employees get the training they need to do their jobs well. When you invest in your employees, they’re more likely to stay and do good work.
  • Reward Good Work: Consider giving bonuses or raises to employees who do a great job. This can motivate them to keep doing well and help the company succeed.
  • Get Help When You Need It: Sometimes, it’s better to let experts handle things like payroll or accounting so you can focus on growing your business. There are many EOR companies in India to help your startup with building your team, payroll management and outsourcing services.
  • Be Ready to Grow: Hire people who can grow with your company. Look for people who can adapt to changes and learn new things as your business expands. If you are going global with your business find an Employer of Record service and payroll management company to outsource all your legal proceedings. Many companies like Avyenter are also helping startups to build their team on a low budget.
  • Be Honest with Your Employees: Tell potential hires about your company’s goals and how it’s doing financially. Make sure they know what to expect from the job.
  • Keep Improving: Keep an eye on how things are going with hiring and with your employees. Ask for feedback, keep track of how well people are doing, and make changes when needed to keep your business moving forward.


Hire Employees with the Best Employer of Record Services in India:

Hire for your business in India easily with Avyenter’s personalized Employer of Record services. We handle everything from setting up your company to managing legal matters, payrolls, and taxes. Feel confident in exploring India’s talent pool, which boasts 1.3 billion people.

  • We cut down onboarding time by 30%
  • 100% compliance with legal requirements.
  • On average, businesses experience a 20% growth boost with our support.



In this blog, you have explored the importance of strategic hiring and its important role in protecting startups from early bankruptcy. By understanding concepts such as Employer of Record Services, you now have a clear reason to adopt EOR service providers and payroll managers for your company. Hiring in countries like India not only renders your good candidate profiles at a low cost but also brings you a global identity. Stop managing all the legal procedures with difficulties and approach Avyenter! Talk to our expert now.


  1. What should businesses consider when selecting an Employer of Record (EOR) service provider?

Businesses should consider factors like the provider’s reputation, experience, geographic coverage, level of service, technological capabilities, and scalability.

    2. Why is it important for businesses to choose the right EOR service provider?

Choosing the right EOR service provider ensures compliance with employment regulations, minimizes legal risks, and allows businesses to focus on their core operations and growth.

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