Hiring glossary
Plain definitions of the terms used in Indian hiring, from CTC and notice buyouts to background verification and Employer of Record.
Compensation
- CTC (cost to company)
- The total annual amount an employer spends on an employee, including fixed pay, variable pay, employer PF contributions, insurance and other benefits. CTC is higher than the salary an employee actually receives each month. How CTC negotiations work
- LPA (lakhs per annum)
- The usual way salaries are quoted in India: annual CTC in lakhs of rupees. A salary of 24 LPA is ₹24,00,000 a year.
- Fixed pay
- The guaranteed part of CTC, paid monthly regardless of performance. Candidates typically weigh fixed pay most heavily when comparing offers.
- Variable pay
- Performance-linked pay such as annual or quarterly bonuses. Because payouts are uncertain, candidates often discount variable pay when comparing offers.
- In-hand salary
- The monthly amount credited to an employee after deductions such as employee PF contribution, professional tax and income tax.
- Joining bonus
- A one-time payment on joining, often used to offset a bonus the candidate forfeits by leaving, or the cost of a notice-period buyout.
- ESOPs (employee stock options)
- Options to buy company shares at a fixed strike price after they vest. Their value depends on the company's valuation and on whether shares can be sold.
- Vesting
- The schedule over which ESOPs become exercisable, commonly four years with a one-year cliff before the first tranche vests.
- Expected CTC
- The compensation a candidate asks for when moving jobs, usually quoted as annual CTC. Current vs expected CTC by role
Notice and joining
- Notice period
- The time an employee must serve after resigning before leaving, as set in their employment contract. Sixty to ninety days is common at larger Indian companies; many startups use thirty. Notice period trends
- Notice buyout
- An arrangement in which the employee, or the new employer on their behalf, pays the current employer to shorten or waive the notice period. Whether it is allowed depends on the current employer's policy.
- Serving notice
- A candidate who has already resigned and is working out their notice period. They can usually join sooner than someone who has not resigned yet.
- Immediate joiner
- A candidate who can start within days, usually because they are between jobs or their notice period has ended.
- Counter-offer
- An offer from the candidate's current employer to keep them, typically made after they resign. A common reason accepted offers do not convert into joinings.
- Offer drop
- When a candidate accepts an offer but does not join, often because of a counter-offer or a better competing offer during the notice period.
- Relieving letter
- A letter from the previous employer confirming the employee has been released from service. Many employers ask for it during onboarding or background verification.
- Full and final settlement
- The final payment to a departing employee, covering pending salary, leave encashment, bonuses and statutory dues such as gratuity where applicable, minus any recoveries.
Working with a recruitment agency
- Mandate
- A formal request from a company to a recruitment agency to fill a specific role, with the job description, budget and timeline. Submit a mandate
- Retainer
- A fee paid to an agency upfront or in instalments regardless of whether the role is filled. HyrEzy works with zero retainer.
- Success fee
- A fee charged only when a candidate joins, usually a percentage of the candidate's annual CTC.
- Replacement guarantee
- An agency commitment to find a replacement at no extra fee if a placed candidate leaves or does not work out within an agreed period. HyrEzy's is 90 days.
- Shortlist
- The small set of evaluated candidates an agency presents for a role, as opposed to a larger pile of unreviewed CVs.
- Executive search
- Recruitment for senior and leadership roles such as CXO, VP and Director, usually through direct, often confidential, approaches to candidates who are not actively looking.
- Passive candidate
- Someone who is not actively job hunting but may consider the right opportunity. Many senior hires are passive candidates.
- Time to hire
- The time from a candidate entering the process to accepting an offer. Time to fill runs from opening the role to the offer being accepted. How long senior hiring takes
Evaluation
- Verified skill
- A skill that appears in the context of real project work with an outcome, rather than only in a skills list. Verified vs claimed skills
- Claimed skill
- A skill a candidate lists without project evidence on the resume. Not necessarily false, but worth probing in the interview.
- Vantage Intelligence score
- HyrEzy's evaluation of a candidate against a specific job description across 19 dimensions, with the evidence for each score shown. How it works
- Structured interview
- An interview in which every candidate for a role is asked the same core questions and assessed against the same criteria, making comparisons fairer.
Employment and compliance
- Background verification (BGV)
- Pre-employment checks confirming a candidate's employment history, education, address, identity and, where relevant, criminal record, done with the candidate's consent. Background verification
- Dual employment
- Working for two employers at the same time without disclosure, sometimes called moonlighting. Background checks can look for overlapping employment.
- Employer of Record (EOR)
- A company that legally employs a person on behalf of another business, handling contracts, payroll, taxes and statutory compliance while the business directs the work. Employer of Record
- PF (Provident Fund)
- A statutory retirement savings scheme run by EPFO. Employer and employee each contribute a percentage of the employee's basic wages every month.
- ESI (Employees' State Insurance)
- A statutory health insurance and social security scheme for employees earning below a set wage threshold, funded by employer and employee contributions.
- Professional tax
- A tax on employment levied by some Indian states and deducted from salary. Rates and applicability vary by state.
- TDS on salary
- Income tax deducted from salary by the employer each month and paid to the government on the employee's behalf.
- Gratuity
- A statutory lump-sum payment to employees on leaving, generally after five years of continuous service, calculated from last drawn wages and years served.
- HRMS
- Human resource management system: software for employee records, onboarding, attendance, leave and payroll. HRMS & payroll