How the GCC Industry Can Grow Stronger Amid Rising Challenges
Despite a whirlwind 2020 full of unpredictability each and every day, India’s GCC sector remained optimistic and emerged stronger in 2021. Number of GCCs in India grew to 1500, employing 1.4 million people, generating revenues of $36 billion and contributing 1% of India’s GDP.
However, as organizations accelerated their digital transformation efforts in response to the business disruptions caused by the pandemic, 2021 presented unprecedented challenges – talent being the most critical of all. The sudden digital acceleration led to a war for digital talent, which in turn led to high attrition rates and increased wages. Leaders realized fostering a culture of collaboration and innovation is key to attracting and retaining top talent. Upskilling and reskilling became the new norm.
The Hybrid Experiment
One of the key lessons the pandemic taught us was work can be done from anywhere. Even organizations that never anticipated their employees would work remotely have learned a lot about remote working. However, organisations saw a disengaged workforce, attrition and a reduced sense of community among colleagues. With the rollout of vaccinations, 2021 presented the opportunity to return to the workplace and create the new, more effective hybrid operating model.
Although the debilitating second wave of the pandemic delayed the return to work by a few more months, it provided an opportunity to GCC leaders to further fine tune their hybrid structure that will serve their businesses best. While the future of work for most GCCs is going to be hybrid, leaders believe the physical offices will only expand and become a space for collaboration and innovation.
Post-Pandemic War for Talent
The competitive war for talent reached a new tipping point post pandemic. As we recover from the crisis, the future of work has changed, along with employees’ needs. With businesses having advanced their digital adoption to meet a changing world, the demand for tech talent has outpaced supply. Moreover, startups are increasingly becoming a magnet for tech talent as they are offering unmatched compensation packages along with permanent work from home opportunities. This has made it even more difficult for multinationals to retain their top talent.
Many companies have increased the notice period in an attempt to hold on to top talent, but it has resulted in higher candidate drop-off rates. However, the good news is that, with the emergence of a workforce that can work anywhere, the opportunity for an organization’s talent pool grows exponentially without geographic boundaries.
Building a Stronger Company Culture
A survey by NASSCOM and ANSR had identified company culture as the leading factor that influences GCCs’ success in recruiting and retaining tech talent. Although the pandemic appeared to be an inhibitor of organizational culture, many GCCs managed to win on the culture during the crisis.
To enable a successful hybrid work environment, GCCs strived to find innovative ways to build culture that translates equally between home and office. They leveraged social media and several other tools to communicate and engage with employees as well as their families to instil a sense of belonging. In the hybrid future of work, a culture and leadership mindset fostering agility, collaboration, innovation and empathy will be the key imperative for the C-suite.
Emergence of Tier I & II Cities as Talent Hubs
GCCs in India always preferred operating out of Tier I cities, which is home to only 35% of the population. The pandemic has changed this paradigm. According to Talent500 by ANSR, there been a 30-40% increase in demand for workforce in tier-2 cities within tech teams across sectors. Many Indian states have expressed their commitment to develop Tier II and III cities to usher in social and economic development.
While Telangana government is planning IT towers in Tier II and III towns, IBM has already opened a Client Innovation Centre (CIC) in Mysuru in response to the ‘Spoke-Shore Strategy’ floated by Karnataka Digital Economy Mission (KDEM). Karnataka government is aiming at attracting at least 100 Global Capability Centres (GCCs) to smaller cities by 2025. Gujarat government has set up the GIFT City, which is already attracting multinationals to set up centres.
(The author Smitha Hemmigae,is Head of Marketing at ANSR and the views expressed in this article are her own)