India emerges as the preferred destination for GCCs: Report

India has emerged as the most preferred location for global shared services, followed by Poland and Mexico, according to a new report published by global consulting firm Deloitte. Global shared services also known as global capability centers (GCCs) are captive centre operations including back office, tech support functions etc. run by large multinationals to enhance productivity. 

Deloitte’s 2023 Global Shared Services and Outsourcing survey said that the GCC sector currently contributes a revenue of $60 billion, which is expected to reach $75-80 billion within 4-5 years. India is expected to have over 1,900 GCCs, employing 2 million people and earning $60 billion.  

In the last 2-3 years, the service delivery model has been adopted by the world’s largest companies amidst tightening economic conditions and continued preference for remote and hybrid work.  

Saurabh Mathur, Partner, Deloitte Touche Tohmatsu India LLP, said that “shared service centres are going to be at the core of India strengthening its position on the global map, and achieving the country’s services exports target of $400 billion for the current fiscal year,” said. 

Another report published on August 3 by staffing firm NLB services also noted that nearly 78% GCCs in India will expand their talent pool and of that 8% is likely to double their workforce by 2023. 

“Despite prevailing challenges in the global economy, India's expanding tech workforce and expertise in cutting-edge technologies like generative AI, quantum computing, robotic process automation, and blockchain, etc., underscore India's remarkable potential as a talent powerhouse to address GCCs growth strategy,” said Sachin Alug, CEO of NLB Services. 

Some of the most sought-after jobs include that of data scientists, sustainability data analysts, statistical analysts, blockchain experts, AL/ML engineers and cybersecurity professionals, among others. Over the past year, industries such as automotive, BFSI, pharma, retail, energy, and telecom have emerged as significant drivers of demand for specialized technology jobs, added Alug. 

Also, unlike in the past, more MNCs are reducing their dependence on Indian IT services companies by building their in-house tech centres, believe industry experts. 

In fact, a report published by Quess IT Staffing in April this year further showed that 20% of the lateral movement from IT firms has been absorbed into GCCs and non-tech firms that are going digital. 

Kamal Karanth, Co-Founder, Xpheno, a specialist staffing company, believes that the GCCs have emerged as a serious competition for talent as they fish in the same talent pool as the IT Services players. Controlling over 25% of the total tech workforce in India, GCCs have emerged a serious influencer of tech talent supply, he said.  

However, despite significant progress, global GCCs are also facing challenges such as talent shortage, which is still seen as an implementation barrier while adopting automation by 40% of these organisations,” said Mathur. He suggests one of the solutions is to move work to cost-efficient locations and navigate tight labour markets and cost pressures, followed by upskilling and bolstering employee well-being.