Recently, there has been a lot of talk about the hiring demand in global capability centres (GCCs). What are the reasons behind this demand and what could be the potential impact? Let’s begin by looking at the numbers.
According to ANSR’s data, while the absolute number of GCC hires is still smaller compared to IT services, GCCs in India are projected to create 364,000 jobs in the country by 2023. Xpheno data shows that 25% of the net additions will come from the banking and financial services sector. The skills in demand will include software developers, engineers, data scientists, AI/ML scientists, cloud experts, and cybersecurity professionals.
GCCs have been present in India for several years. What makes the current wave of GCC hiring different?
Vikram Ahuja, MD of ANSR and CEO & Co-Founder of Talent500, explains that while there are already 1,600 GCCs employing 1.5 million professionals, growing at a rate of 12% per year, the last two years have been transformative. GCCs are experiencing their highest ever pipeline for their work.
He attributes this to specific factors: “The pandemic normalized the concept of remote work. GCCs gained more mainstream acceptance. In many cases, GCCs outperformed traditional organizations in important metrics like business continuity and information security, which are crucial for large global companies. In a way, it served as a litmus test.”
Over the years, GCCs have mastered these processes and are now better equipped to establish distributed teams on a larger scale. However, this alone doesn’t fully explain the hiring wave.
Another reason is the demand for skills. “What’s different now is that the pace of technological advancement is more aggressive. In the conversations we’ve had in the past 12 months, it’s no longer a question of whether we should do this, but rather how can we make it happen,” says Ahuja.
For cutting-edge tech workstreams like AI, there is a 40-50% shortage in the global talent pool, according to Ahuja.
Previously, GCCs were often seen as back-office centers where structured, people-driven work could be efficiently carried out. However, the tasks performed by GCCs have become more complex over time, expanding from business process outsourcing or offshoring to knowledge processes offshoring, analytics, technology, and more.
Ahuja notes that more companies are now adopting a talent-driven approach to GCCs. There is a greater focus on forward-facing R&D work being conducted in India. He provides examples of GCCs where the teams helped recruit from the top 1% of product engineering talent in the country or assisted a leading retail company in building their product merchandising and marketing function from India.
According to the MD of ANSR, GCCs have traditionally focused on lateral hiring. “Individuals with 3-12 years of experience have typically been the sweet spot for GCCs. However, we are now seeing increased demand for people with 12+ years of experience at VP, SVP, and executive levels, although the numbers at this level are still relatively small.”
In addition to technology, finance, analytics, and creative functions are also being established in GCCs today.
Ahuja mentions that as companies set up GCCs, they are also embracing the development of fresh talent.
What about employee perception?
He states that the perception that GCCs only focus on certain types of work is changing. Poor brand recall for some international brands remains a challenge, but as more well-known brands establish GCCs, this issue is being addressed.
“The past 18 months have been challenging for employees in various sectors, particularly in startups. Job security is now a top priority for many people. GCCs are now seen as long-term and stable options. Additionally, there are cultural and policy changes that promote pay parity and flexible opportunities, leading to a more diverse workforce,” says Ahuja, adding that there has been a 60% increase in the number of women applying for roles in GCCs.
However, there is still a need for more efficient supply-demand matching. According to Ahuja, while India has 4.5 million professionals in the tech industry, only 1.5 million are in GCCs, with about 80-85% of them being tech talent. Currently, they process 350,000-500,000 job applications every month, with each role receiving around 800 applications. Less than 2% of applicants qualify. Recruiting becomes a labor-intensive process, and accurately assessing the right fit for each role remains a significant challenge. Companies are exploring the use of AI tools to mitigate this.
In terms of skills, GCCs are not just looking for technical expertise but also qualities like the ability to work in distributed environments and strong communication skills.
While the positive hiring sentiment in GCCs is good news for potential employees, it is crucial to closely analyze the broader market trends that contribute to the majority of hiring activity.
