In the backdrop of an unprecedented boom in Global Capability Centres (GCCs) across India, a pressing question emerges: can they crack the growing challenge of attrition?
This editorial draws insights from a recent expert discussion moderated by SightsIn Plus Editor-in-Chief Romesh Srivastave, featuring Monica Pirgal, CEO, Bhartiya Converge and Anuj Agrawal, Founder & CEO, Zyoin Group.
What are the Key Drivers Behind the Rapid Expansion of GCCs in India?
The rapid expansion of GCCs in India is driven by multiple factors.
First, India’s deep talent pool—comprising trained and specialized professionals—makes it a preferred destination for building scalable capabilities.
Second, strong government support and favorable policies are encouraging MNCs to establish and expand GCCs, with initiatives designed specifically for this sector.
Third, India’s vibrant startup ecosystem fosters continuous innovation, offering GCCs access to cutting-edge technology and new ideas beyond cost arbitrage.
Additionally, organizations are seeking greater control over intellectual property (IP) by insourcing critical work through GCCs, instead of outsourcing to third parties.
While cost advantage still plays a role, the emphasis has shifted toward value creation and innovation.
Developments like UPI and India’s stable policy environment further strengthen its appeal as a global innovation hub.
As a result, GCCs today are not just operational centers but strategic engines driving transformation for global enterprises.
Why are Global Capability Centres Increasingly Expanding into Tier 2 and Tier 3 cities of India?
Global Capability Centres are increasingly expanding into Tier 2 and Tier 3 cities in India due to a strategic mix of talent access, cost advantages, and long-term sustainability.
Many companies with a Tier 1 presence are adopting a hub-and-spoke model, where Tier 2 cities serve as secondary hubs.
This move enables them to tap into a more stable and locally rooted talent pool, where employees are often more culturally aligned and exhibit lower attrition rates.
For some firms, setting up in Tier 2 cities also offers proximity to existing manufacturing, sales, or marketing hubs, creating operational synergies.
These locations provide an attractive alternative to saturated Tier 1 cities that face high salary expectations, escalating infrastructure costs, and talent churn.
While GCCs do require focused investment in upskilling in these smaller markets, the long-term rewards in productivity and retention outweigh the initial challenges.
This expansion is also seen as a form of “intelligent scaling,” where non-customer-facing roles can be relocated cost-effectively.
Moreover, it helps democratize economic growth by creating opportunities in smaller towns.
As GCCs move from cost arbitrage to capability building, Tier 2 and Tier 3 cities offer the perfect blend of value, innovation, and workforce sustainability.
Are GCCs Facing High Attrition, Talent Turbulence, and What are the Other Major Challenges?
GCCs in India are not experiencing unusually high attrition when compared to broader industry norms—most report an average attrition rate of around 12–13%, which aligns with market benchmarks, especially in Tier 1 cities.
However, the root cause of attrition in many GCCs lies more in organizational design than in market conditions.
Many employees feel limited by roles focused on delivery rather than innovation or leadership, which leads to dissatisfaction and exits.
Additionally, the intensifying competition among new and existing GCCs for the same talent pool is contributing to churn.
As hundreds of GCCs emerge annually, talent is often poached from one center to another, frequently with the lure of significant salary hikes.
For newly established GCCs, the pressure to prove value to headquarters often results in aggressive hiring of experienced professionals, adding to the talent war.
Other key challenges include unclear career paths, insufficient cultural alignment with Indian work norms, skill mismatches, and high offer-drop rates, where candidates accept but do not honor job offers.
Mature GCCs also struggle with compensation rigidity, while unrealistic expectations from global stakeholders—especially when Indian hiring offsets overseas redundancies—can introduce internal friction and impact retention.
To curb attrition, many firms are now focusing on career architecture, global role integration, and building a value-driven employee proposition from the ground up.
Overall, while attrition is not uniquely high in GCCs, talent turbulence remains a pressing issue driven by competitive dynamics, structural challenges, and evolving employee expectations.
Watch Full YouTube Video Here:
Are Global Capability Centres Impacting the IT Industry?
GCCs are significantly reshaping the Indian IT industry. Quarter-on-quarter, GCC hiring has surpassed traditional IT services hiring, reflecting a shift from outsourcing to in-house global operations.
This change has brought several benefits: GCCs offer higher compensation, stronger work-life balance, mature hybrid work models, and a deeper emphasis on diversity and innovation.
While IT services firms face hiring slowdowns, they are also learning from GCCs—adopting better people practices, culture, and innovation frameworks.
Rather than competing, GCCs and IT services firms are coexisting and strengthening the broader ecosystem.
The influx of GCCs is also creating thousands of global leadership roles in India, fostering local innovation with global impact.
With expected growth from 6,500 to over 30,000 global roles by 2030, GCCs are empowering Indian talent to lead at a global scale—ultimately elevating India’s position as a technology and innovation powerhouse.
How Do You Envision the Growth and Transition of GCCs in India?
GCCs in India are evolving into true digital twins of their headquarters, mirroring not just operations but also leadership and innovation.
In the next few years, we’ll see co-ownership of global products, India emerging as a strategic market, and the rise of new business models.
These centers won’t just support core functions—they’ll drive monetizable solutions and innovation, playing a transformative role in both global strategy and revenue generation.
How Do You See Future Hiring Trends in GCCs?
Future hiring trends in GCCs appear robust and accelerating.
Despite global macroeconomic uncertainty and a slowdown in IT services and startups, GCCs are expanding steadily due to strong mandates, growing business opportunities, and their reliance on India’s talent.
Many are creating new roles alongside replacing outsourced ones. For at least the next 6–9 months, demand will stay high, particularly in tech.
Alternative models like gig and contract staffing are gaining traction.
With attrition rates between 12–15%, considered healthy, GCCs are well-positioned to drive job creation—potentially generating up to 300,000 new roles annually—as they increasingly evolve into global business value hubs.
Note: We are also on WhatsApp, LinkedIn, Google News, and YouTube, to get the latest news updates. Subscribe to our Channels. WhatsApp– Click Here, Google News– Click Here, YouTube – Click Here, and LinkedIn– Click Here.
