How to heal the Achilles Heel of India’s Global In-house Centres

The estimated revenue projection for the GIC vertical is $350 billion by 2025

India’s Global In-house Centres
The early adopters of the GIC model were the call centres and transaction processing units of overseas entities.

By Vidya Amarnath

Global In-house Centres, categorized as owned or outsourced, value addition partner or strategic entity, or set up for profit enhancement or rapid business enablement, have graduated from voice support centres in the late 90s to innovation hubs in the present.

For the uninitiated, for those with partial knowledge of GICs and others familiar with the model yet keen to know more, here is a gist before we get to the hottest subject in our midst, one that can open doors to thousands, relieve hiring stress, usher in a new boom and light up faces in the corner room.

The estimated revenue projection for the GIC vertical is $350 billion by 2025 (that’s just the India figure, so now we have the undivided attention of CXOs, HR Managers, recruiters and job seekers).

Simply stated, a pure-play GIC is an offshore unit of a global MNC. The parent may be active in manufacturing, financial services, banking, software development, personal computing, pharma, life sciences, aviation and such other domains that facilitate a bouquet of deliveries from a remote location, for reasons of cost, efficiency, risk mitigation or lack of optimal-cost resources in the home country.

The early adopters of the GIC model were the call centres and transaction processing units of overseas entities. The outstanding performance of these pioneers encouraged a set of dynamic professionals (some of whom were heading early-day GICs) to join hands with VCs and set up 3rd party call centres.

By late 90s and early 2000, the concept snowballed into remarkable success and incredible efficiencies, giving rise to several new business models. Some of the Captives became 3rd party centres.

By the turn of the first decade, BPOs were followed by KPOs that proved India could widen its scope from cost and value to intellectual arbitrage. The niche stream dealt with Process Outsourcing of knowledge-intensive, data-driven activities pertaining to domains such as life sciences, engineering design and development, data analytics, market research and business research.

The pandemic, its aftermath and recurrent waves are leading to rebirth of the captive model of GICs. The task of building a Center of Excellence is often awarded to a 3rd party with a track record of providing high quality talent, technology and leadership.

Now to the crux: If there is one element India is not short of it is talent, and as for space for creating infrastructure, a decade and a half earlier was the time when cities realised their outskirts could evolve into satellite towns and IT corridors to house global enterprises.

As delivery continued to be seamless and the performance graph rose above expectations, the subdued British boss exclaimed “Good Show,” while the American counterpart dubbed the concept a “Slam Dunk,” and the impassive German Direktor said “Sehr Gut.”

‘Aiyo’ said Indians in the know. Being a stoic race, we believe all good things will come to an end, and cause for concern is red flags in the GIC model. What could possibly plague an industry that according to NASSCOM is growing annually at a CAGR of 11 percent since FY 2010?

The IT industry’s apex body says in a recent report that MNCs operate over 1,000 GICs in India. Yet there is a gradual setback not many are paying heed: Talent sourcing, onboarding, training and retention. Four job offers chase every techie candidate and demand for IT professionals has at least doubled in the last 14 months according to the Indian Staffing Federation.

It is here we will return to GICs – and review the talent shortage that has cropped up in the last few years and suggests a solution before it’s too late.

With most of the staff in a GIC comprising techies who are in demand, the knee jerk solution is to look at incentives, ESOPs and attractive remuneration. Lame route. Explains the four-offers-to-one-candidate paradox narrated above. Campus recruitment? Smart answer and you are almost there. But hope you can find a campus to recruit from in the 4th Wave.

The answer is to find freshers off campus, or those who have recently entered the work stream. Ask a friend in HR and they will tell you “freshers” denotes anyone with 0-2 years of work experience.

Arguably, the freshers route is as old as IT development centres, BPOs and back offices. What compels us to view the current situation differently? Recognizing that emerging technologies are central to GIC delivery, we must accept the fresh graduate of today is not job-ready.

Today’s need is upskilling, for which new hires must be put through a two or three-month program, focused on the requirements of the role they are expected to perform at the GIC. What are the in-demand technologies GICs are looking for? Cloud Computing, Data Analytics, Full Stack Development, Machine Learning, Linux, Big Data, Data Visualization, Data Science and more.

Key growth segments for which as many as 100 GICs are expected to set shop in India this year are automotive, online travel, engineering, BFSI, retail/consumer packaged goods, manufacturing and healthcare. ANSR, a leader in establishing and operating Global Capability Centers, estimates new GICs and expansion in the sector will create 300,000 to 350,000 new jobs in the next three years.

Here is a checklist to create and sustain a capable and eager-to-deliver talent pool:

  • Be in constant touch with placement cells of leading colleges across India.
  • Advertise in the media or on online job boards if you feel the competition is preparing as well as you are.
  • Create your own set of Influencers.
  • To ensure that hired candidates do not feel displaced (a key reason for attrition), opt for local sourcing and placement.
  • Source from “finishing schools” that help upskill fresh graduates in in-demand areas such as vision computing, AI, ML, vendor security, platform engineering, data engineering, IoT Cloud platforms and python programming.

It is not just GICs who are scouting for talent. As per the Monster Annual Trends Report, IT as a vertical is expected to grow at 7% in 2022 which will lead to a gross employee addition of around 450,000 in the second half of the year.

The good news is hiring for freshers has picked up over the last three months of 2021, and is estimated to increase considerably in 2022 says the Monster report.

The top four Indian IT companies have doubled their hiring targets for 2021-22 for freshers, reports The reason for emphasis on freshers is what we have been saying all along – India’s digital transformation journey and increasing attrition among experienced professionals.

Amid such a talent shortage, the penchant and practice of onboarding only experienced professionals is almost Utopian. Paucity of skilled talent and reliance on experienced resources will also lead to increase in people costs at GICs.

It’s time for GICs to attract and retain freshers through the Hire-Train-Deploy approach. It is also time to develop a hybrid working model or switch to location-agnostic hiring. Those who stick to the old ways will have to fight attrition, engage in backfilling and keep nursing their Achilles Heel.

(The writer is a Pre-Sales and Profit Specialist in the GIC vertical. Views expressed are her own).

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