Introduction: The New Frontier for Global Capability Centres (GCCs)

The evolution of Global Capability Centres (GCCs) in India has been nothing short of remarkable. Traditionally concentrated in metropolitan hubs like Bengaluru, Hyderabad, and Pune, GCCs are now setting their sights on Tier-2 and Tier-3 cities. This strategic shift is not only redefining the business landscape but also providing a substantial boost to local talent pools, as highlighted in a recent Financial Express article. As we approach 2025, the momentum behind this trend is stronger than ever, driven by digital transformation, cost optimization, and the quest for untapped talent.

Why GCCs are Eyeing Tier-2 and Tier-3 Cities

According to the Financial Express report, the move to smaller cities is driven by several compelling factors:

• Access to Untapped Talent: Tier-2 and Tier-3 cities are home to a wealth of skilled graduates from reputed institutions, eager for opportunities closer to home.
• Cost Efficiency: Lower real estate, operational, and living costs make these cities attractive for setting up new centres.
• Reduced Attrition: Employees in smaller cities tend to have higher loyalty and lower attrition rates, ensuring business continuity.
• Government Incentives: State governments are rolling out incentives such as tax breaks, infrastructure support, and ease of doing business policies to attract GCC investments.

These factors collectively create a win-win scenario for both organizations and local communities.

The Impact on Local Talent: A Transformative Opportunity

The expansion of GCCs into Tier-2 and Tier-3 cities is catalyzing a transformation in the local talent landscape. Recent research by NASSCOM (2023) indicates that over 40% of new GCC jobs in 2023 were created outside traditional metros. This shift is creating high-value employment opportunities, upskilling local talent, and fostering inclusive economic growth.

• Skill Development: GCCs are investing in training programs, partnerships with local universities, and upskilling initiatives to bridge skill gaps.
• Career Growth: Professionals in Tier-2 and Tier-3 cities now have access to global career paths without relocating to metros.
• Reverse Migration: The trend is encouraging reverse migration, with professionals returning to their hometowns for better work-life balance and career prospects.

This democratization of opportunity is not only uplifting individuals but also strengthening the overall talent ecosystem in India.

Recent Trends and Data: The GCC Boom Beyond Metros

The EY India GCC Pulse Survey 2023 found that 65% of surveyed organizations are actively exploring or have already established operations in non-metro cities. Cities like Coimbatore, Kochi, Indore, Bhubaneswar, and Jaipur are emerging as preferred destinations, with robust infrastructure, quality educational institutions, and a growing digital ecosystem.

Furthermore, a NASSCOM report projects that by 2025, nearly 50% of new GCCs will be established in Tier-2 and Tier-3 cities, creating over 300,000 new jobs. These numbers underscore the scale and potential of this movement.

Challenges and Solutions: Navigating the Transition

While the opportunities are immense, the transition to smaller cities is not without challenges:

• Infrastructure Gaps: Some cities still lag in terms of Grade-A office spaces, reliable power, and high-speed internet.
• Talent Readiness: While there is abundant raw talent, specific domain expertise and industry exposure may be limited.
• Cultural Integration: Building a global work culture in smaller cities requires careful change management and engagement strategies.

Leading professional services firms are addressing these challenges through strategic partnerships, investments in local infrastructure, and focused talent development programs. The role of talent intelligence and market mapping is more critical than ever.

Han Digital: Empowering GCCs with Talent Intelligence

As organizations navigate the complexities of setting up GCCs in Tier-2 and Tier-3 cities, the expertise of talent intelligence partners like Han Digital becomes invaluable. With a deep understanding of India’s diverse talent markets and strong relationships with senior leadership across industries, Han Digital is uniquely positioned to support GCC expansion strategies.

• Market Mapping: Han Digital’s proprietary research provides granular insights into talent availability, compensation trends, and skill clusters in emerging cities.
• Leadership Connections: Their extensive network with CXOs and HR leaders ensures swift access to top talent and best practices for GCC setup.
• Customized Talent Solutions: From workforce planning to employer branding, Han Digital offers end-to-end solutions tailored for the unique needs of each location.

By leveraging Han Digital’s expertise, professional services companies can de-risk their expansion, accelerate time-to-market, and build high-performing teams in new geographies.

Case Studies: Success Stories from the Heartland

Several leading organizations have already reaped the benefits of moving their GCCs to Tier-2 and Tier-3 cities. For instance, a global IT services firm partnered with Han Digital to establish a technology centre in Coimbatore. Through detailed talent mapping and targeted hiring campaigns, the company filled over 500 specialized roles in under six months, achieving a 30% lower attrition rate compared to metro locations.

Similarly, a major financial services provider leveraged Han Digital’s insights to build a shared services hub in Bhubaneswar, tapping into a rich pool of finance and analytics professionals. The result was faster ramp-up, enhanced diversity, and significant cost savings.

Future Outlook: The Road to 2025 and Beyond

The trajectory for GCCs in India is clear—Tier-2 and Tier-3 cities will be at the forefront of the next wave of growth. As digital infrastructure improves and more organizations embrace location-agnostic talent models, the opportunities for both employers and employees will multiply.

According to NASSCOM’s 2023 report, the Indian GCC sector is expected to reach a market size of $60 billion by 2025, with a significant share coming from non-metro locations. This growth will be fueled by innovation, agility, and the ability to harness diverse talent pools.

Best Practices for Professional Services Companies

For professional services companies looking to establish or expand GCCs in Tier-2 and Tier-3 cities, the following best practices are essential:

1. Conduct Comprehensive Talent Assessments: Leverage talent intelligence partners like Han Digital to map skill availability, compensation benchmarks, and competitor activity.
2. Invest in Local Ecosystem Development: Collaborate with universities, training institutes, and local government bodies to build a sustainable talent pipeline.
3. Prioritize Employee Experience: Offer flexible work arrangements, robust learning opportunities, and clear career paths to attract and retain top talent.
4. Adopt Agile Operating Models: Design GCC operations for scalability, resilience, and rapid adaptation to market changes.
5. Foster a Global Mindset: Integrate global best practices in leadership, diversity, and innovation to build world-class teams.

Conclusion: Unlocking India’s Next Talent Revolution

The movement of GCCs to Tier-2 and Tier-3 cities represents a paradigm shift in India’s professional services landscape. By unlocking new talent reservoirs, reducing costs, and driving inclusive growth, this trend is set to redefine the future of work in India. Organizations that embrace this change, supported by expert partners like Han Digital, will be best positioned to lead in the global arena.

As we look ahead to 2025 and beyond, the message is clear: the heart of India’s talent revolution beats strongest in its emerging cities. Now is the time to seize the opportunity and shape the future of global capability centres.