Sat Oct 19 16:22:05 UTC 2024: Published – October 19, 2024 09:52 pm IST – CHENNAIChennai has long been recognised for its thriving global capability centres (GCCs), but now this trend is expanding to tier-2 and tier-3 towns of Tamil Nadu.
According to data shared by Guidance, the nodal agency instrumental in bringing investments into Tamil Nadu, the State is estimated to have over 350 GCCs, with over 300 in Chennai and more than 25 in Coimbatore. Additionally, cities such as Salem, Vellore, Madurai, Tiruchi, and Tirunelveli house GCCs. It is estimated that around 50 GCCs are currently operating outside Chennai.Details provided by Guidance showed that GCCs are estimated to employ over 2.25 lakh professionals in Tamil Nadu, a majority in Chennai. More companies are now mulling options to set up their GCCs in small towns. And as these centres begin to emerge in smaller cities, they are not only driving local economic growth but also creating new opportunities for talent and innovation, officials said.
When asked why a tier-2 town, Naved Narayan,vice-president-mobility solutions and centre head-Coimbatore, Bosch Global Software Technologies (BGSW), said: “We chose Coimbatore for its large talent pool, entrepreneurial spirit, and established industrial ecosystem. The city has a strong base in motors and automotive components, including those for electrification,” and added that, “We collaborate closely with local academic institutions to prepare students for industry demands. Coimbatore aligns perfectly with BGSW’s fit-for-future strategy, helping us develop a highly skilled, future-ready workforce with ample opportunities for learning and growth.”“Given that GCCs look for technologically sound talent at the intersection of industry, Tamil Nadu is uniquely positioned, given its high urbanisation and industrial clusters spread across the State,” said Ramkumar Ramamoorthy, partner at Catalincs. He said GCCs had a great opportunity to incubate their operations within campuses of reputable educational institutions such as Honeywell did within the Thiagarajar Engineering College in Madurai. This provides GCCs a perfect platform for joint research, faculty sabbatical, student apprenticeship, and other forms of industry-academia linkages for mutual benefit, he added.
Low cost of operations, low attrition, social infrastructure, talent pool, and post-COVID-19 pandemic hybrid work model are some of the reasons why smaller towns are emerging as hotspots for GCCs. The Tamil Nadu government has also established Neo-Tidel parks across all major tier-2 and tier-3 cities to make available high-quality grade-A office space for interested firms.
Gaurav Gupta, partner and GCC industry leader, Deloitte India, said: “As GCCs are growing, they are looking to expand coverage to newer bases to attract and retain talent. This has also been possible and necessitated by movement of talent, over the last couple of years following the COVID-19 pandemic.”Mr. Gupta said some of the mature GCC hubs today see high competition for the same talent, leading to higher compensation and attrition. “Mature GCC hubs have seen a 30%-40% increase in talent cost and 60%-80% increase in real estate cost over the last four to five years. Hence, tier-2 cities, such as Coimbatore, offer access to trained/trainable talent at must better salary and operational costs. Infrastructure at major GCC and ITES hubs has come under stress due to rapid expansion and while the State government is taking steps to improve that, tier-2 cities offer an advantage currently, though the possible scale of expansion varies for each city and is limited when compared to major GCC hubs,” he added.
According to GCC Office Guide 2024, a ready reckoner by Jones Lang Lasalle (JLL), India is home to over 1,800 GCCs, which employ over 1.3 million people. GCCs or global in-house centres are offshore units of multinational corporations that operate across the globe.These centres were responsible for providing various support services, such as information technology services, finance, human resources, and analytics, to their parent organisations. Earlier, these units were primarily established to offshore back-office processes, but that is not the case today. The GCCs of today handle more complex line items across the organisation’s value chain. They have become centres of operational excellence, product development, innovation, strategy, and business transformation hubs, according to the JLL Guide.
Published – October 19, 2024 09:52 pm IST
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