Global capability centers intensify India’s tech talent war
MUMBAI, INDIA — The rapid expansion of well-funded global capability centers (GCCs) has intensified the war for talent in India, driving up attrition and wage costs at local information technology companies.
Wipro recently acknowledged that GCCs are luring away skilled employees with 4-10 years of experience by offering 30-50% higher compensation.
“The capacity for GCCs to pay is higher,” said Wipro Chief Human Resources Officer Saurabh Govil.
GCCs are offshore centers owned by large multinational companies that provide business support services like IT, finance, HR, and engineering to the parent company. They leverage the talent and infrastructure available in countries like India to deliver services cost-effectively.
India added over 150 GCCs last year, taking the total close to 1,600. Over 65% were set up by firms from the United States (U.S.), with 83% opting for multi-functional centers spanning engineering, IT, and business process management.
According to a joint report by the IT industry body National Association of Software and Service Companies (NASSCOM) and consulting company Zinnov, 1.68 million professionals are working in GCCS in India for FY23, and the number is expected to double by the end of 2026.
Recruiters hiring for both IT and GCCS estimate that the centers hire talent at a 30% premium compared with an IT company.
Because of this, major Indian tech firms are experiencing a spike in wage costs. TCS and HCL Technologies have seen employee costs rise to a six-year high, at 77.4% and 69.6% of total expenses, respectively. Wipro’s wage expenses reached 71.3% in Q1, decreasing slightly to 70.2% in Q2.
Govil pointed out that while the IT sector grapples with high attrition, the limited growth potential of GCCS compared to expansive IT companies could eventually balance the talent competition.
“The cycles keep coming. Technology is very core to every business and, hence, (talent) has to be sourced. Besides, if they (GCCS) do not get scaled, then it becomes a challenge,” he stated.
