Introduction to the GCC Landscape
Global Capability Centres (GCCs) have rapidly evolved over the past few years, becoming crucial components of multinational corporations (MNCs). Initially perceived as back-office operations, GCCs are now pivotal business drivers, handling strategic roles and contributing significantly to the global operations of MNCs.
India has emerged as a prime destination for Global Capacity centers, boasting over 1,580 GCCs with an installed talent base of over 1.66 million. The strategic importance of these centers has led to a surge in the demand for high-caliber leadership, prompting MNCs to offer top-notch salary packages to attract the best talent.
Why Are GCCs Offering Lucrative High-Paying Roles to Top Talent?
The transformation of GCCs from mere service delivery units to strategic hubs necessitates experienced and visionary leadership. To drive this shift, MNCs are offering lucrative salary packages, with some roles commanding as much as ₹3-6 crore annually. This is a significant increase from two years ago, where less than 10% of GCCs offered such high salaries. Now, this figure stands at 16-18%, highlighting the growing recognition of the value that seasoned professionals bring to these roles.
The transformation of GCCs from merely back-office operations to key components of business strategy and leadership is evident in their compensation packages. Managing directors or country heads of larger GCCs now earn up to $1 million annually, reflecting the enhanced capacity and maturity of these centers.
The integration of advanced technologies such as Artificial Intelligence (AI) and Machine Learning (ML) into GCC operations is a key driver of this trend. Over 90% of Indian GCCs plan to leverage these technologies in the next few years, with an estimated expenditure of $60 billion. This technological adoption is expected to generate operating profits of $150-275 billion across various sectors, further emphasizing the need for top-tier talent to lead these initiatives.
What Does This Mean for 2024 Outlook?
As we enter 2024, enterprises are adopting prudent strategies that align budgets with the macroeconomic reality. Several key dimensions are expected to shape compensation structures, workforce composition, and recruitment decisions in the coming year:
Salary Increase Trends 2024 – Conservatism Rules
Given the current macroeconomic conditions and a narrowing talent demand-supply gap, organizations are expected to de-emphasize substantial salary hikes. The focus will shift to technological advancements and skill development, potentially reducing funds allocated for annual salary increases. A distinct employee value proposition will be crucial for talent retention, moving beyond reliance on competitive salary packages.
Attrition Trends 2024 – Strategic Adjustments
Prudent recruitment strategies in Indian start-ups and IT firms during global economic downturns are anticipated to yield fewer job opportunities and decreased migration from GCCs. Companies, particularly those with Private Equity (PE) backing, may see a slight increase in involuntary attrition due to ongoing rightsizing efforts. The advent of Generative AI aims to automate entry-level jobs, focusing on enhancing human capabilities and creating new opportunities.
Hiring Trends 2024 – Critical Skills Stay Priority
Anticipate differentiated hiring strategies aligning with specific business needs, particularly for GCCs backed by Private Equity (PE) firms and those emphasizing niche skills. A slight reduction in junior-level hiring may occur due to budget constraints, favoring available talent over fresh graduates. Senior-level roles prioritize internal talent development. Generative AI’s impact could lead to job redundancies, necessitating the hiring of specialized professionals or upskilling the existing workforce. In 2024, expect an uptick in demand for green skills driven by eco-friendly objectives, covering areas like carbon footprinting, sustainability consulting, and climate data analysis.
Has Fresher Talent Shifted from MNCs to GCCs?
The landscape of fresher hiring has also seen a shift towards GCCs. EY's 'Future of GCCs in India' report projects that the GCC market will cross $100 billion by 2030, employing over 4.5 million people across 2,400 centers. In 2023 alone, GCCs recruited 280,000 professionals, bringing the total number of employees to 1.66 million by Q4 2023, up from 1.38 million in Q4 2022.
Despite the significant focus on experienced professionals, GCCs are also increasing their recruitment of freshers. Mature GCCs with non-tech roles are particularly active in hiring fresh graduates for positions in finance, marketing, HR, and other affiliate roles. These centers are offering up to 30% higher salaries than traditional IT services firms, making them an attractive option for new graduates.
This trend is supported by the current economic environment. The larger IT players have shown muted growth outlooks, creating opportunities for GCCs to position themselves as more promising career destinations. The work culture at GCCs, characterized by continuous learning and improvement, also gives them an edge over regular IT firms, which often focus more on employee output.
Fresh graduates are increasingly drawn to GCCs not only for the competitive salaries but also for the predictable and visible career growth. Additionally, the quality of work and the opportunity to engage in cutting-edge projects are significant factors that entice new talent towards these centers.
The Evident Shift
The strategic importance of GCCs has never been more apparent. As these centers continue to scale and take on more critical roles within MNCs, the demand for seasoned professionals and fresh talent alike will only grow. The substantial salary packages being offered to leadership roles underscore the value that these professionals bring in steering GCCs towards success.
The shift towards GCCs among fresh graduates is also a testament to the evolving landscape of employment in India. With higher salaries, better career growth prospects, and a more engaging work environment, GCCs are becoming the preferred choice for many.
As we look to the future, the role of GCCs will continue to expand, driven by technological advancements and strategic initiatives. The investment in top talent, both seasoned professionals and fresh graduates, will be crucial in ensuring that GCCs remain at the forefront of innovation and business excellence.
