Article: GCCs fuel industry staffing surge in India


GCCs fuel industry staffing surge in India

GCCs are at the forefront of India's digital transformation, driving substantial structural changes in the country's technology sector.
GCCs fuel industry staffing surge in India

In a landscape where Indian IT services firms predominantly rely on their existing talent pool rather than expanding their workforce, global capability centres (GCCs) are actively engaging in substantial hiring initiatives. The surge in hiring by GCCs signifies a notable shift as they increasingly undertake a larger share of work within India, a space traditionally dominated by Indian IT services firms.

Rising influence of GCCs in India's digital transformation landscape

The extensive cadre of IT engineers, typically showcased by companies like TCS, Infosys, and Wipro to secure substantial contracts, is now being enlisted by major global corporations to conduct in-house operations. The appeal of India for global companies extends beyond cost and talent advantages; there is a growing emphasis on establishing digital transformation capabilities.

As per a recent report by Nasscom, India's GCCs are anticipated to witness an expansion in market size, increasing from the existing $46 billion to $60 billion by 2025, accompanied by a rise in the total number of GCCs surpassing 1,900. While the overall IT industry employs approximately 5.4 million individuals, as per Nasscom, GCCs contribute significantly by employing about 1.66 million people. This trend underlines the evolving dynamics where global entities are increasingly leveraging India's skilled workforce not only for cost efficiency but also for advancing their digital transformation initiatives.

A more optimistic projection by EY forecasts that the Global Capability Centre (GCC) industry is poised to employ approximately 2.6 million individuals in India by the end of 2030. This would result in the total headcount within GCCs surpassing 4.5 million people by the same year.

Despite a noticeable decline in demand for services from traditional IT companies, there is a significant upswing in hiring within GCCs in India. The substantial migration of employees to GCCs is attributed to the increasing emphasis on digital transformation, which has become integral to every company's distinctive identity. Companies are now inclined to build and own digital capabilities, leveraging the abundant digital skills available in India, rather than relying on third-party vendors.

Over the past decade, there has been a substantial increase in STEM (science, technology, engineering, and mathematics) talent in India, with the establishment of numerous IITs, NITs, and IIITs. The proliferation of private universities, numbering over 400 today, has contributed to a sudden influx of high-quality talent in the country.

In addition to talent availability, advancements in technology have made it more feasible for companies to bring their operations in-house. The advent of AI and other technologies has empowered clients to handle work more cost-efficiently than outsourced vendors. Rapid technological changes, such as the emergence of the metaverse and generative AI, also play a role in clients preferring in-house operations, providing them the flexibility to adapt to newer technologies faster than relying on third-party vendors.

The trend of more GCCs moving to India is not confined to large conglomerates; even startups and unicorns like Twitter, Airbnb, and Uber are establishing their centres in the country. These entities are not just setting up back offices in low-cost destinations but are building substantial capabilities in technologies like AI, establishing centres of excellence in India for global impact.

Diverse players join the trend

As the GCCs expand, the emphasis on freshers' hiring becomes crucial to cultivating growth. Prominent GCCs, such as JP Morgan Chase, Wells Fargo, and Barclays, have amassed significant headcount numbers in India. Furthermore, the presence of the Indian diaspora in global companies at the CIO and CTO levels enhances the understanding of the Indian talent market and geography, facilitating the establishment and management of centres in India.

Summing it up

Post-COVID, the reduced opportunities abroad for Indian IT engineers in service companies have become a compelling factor. The diminishing allure of overseas opportunities that once drew talent to the services industry has shifted focus towards the dynamic and expanding landscape of GCCs. The ongoing expansion of GCCs in India signifies a major structural shift, as they move beyond their traditional roles and emerge as significant players in the country's technology sector.

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Topics: Others, Technology, #DigitalTransformation, #IndustryInsights

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