Top trends of Global Capability Centers in India for 2022

• Increasing investment in technology resources: During the pandemic, we saw GCCs shift their ERP and legacy applications to the cloud and increase adoption of technologies such as advanced analytics, artificial intelligence, machine learning, among others, across different functions. This surge in investment in technology resources, be it tech talent, data mining and processing, tech tools, etc., will only pick up pace in the coming year as there is a massive demand from the parent organizations for the GCCs to drive innovation and become tech hubs for the organization.
  
  
• Hiring and reskilling for niche skills: In the post-COVID era, we have seen the emergence of a war for talent across industries, and GCCs are no exception. Inability to attract and retain talent and upskilling the existing workforce with niche skills is poised as a major risk for GCCs in India. The war for talent has also led to an increase in people costs due to higher salary costs from talent possessing next-generation tech skills and niche skill sets. To counter this, we expect a higher focus and increased investments by organizations to hire and reskill workforce with niche skills (i.e., AI/ML, blockchain, data analytics, Natural language processing, among others) through lateral and campus hiring, and thereby, expand their talent pool for niche skills. This will in turn enable the GCCs to deliver customized digital solutions and services to their customers.
  
  
• Redefining Employee Value Proposition (EVP) in the post-pandemic era: One aspect which is becoming increasingly clear is that employee expectations have shifted over the course of the pandemic, thereby giving rise to higher attrition rates for GCCs in India. This phenomenon requires GCCs to review and redefine their EVPs going forward. The EVP must be scrutinized and augmented across four main areas¾ organizational culture, nature of work, career growth and rewards and compensation. As the competition for talent continues to intensify with the evolution of new working models and with the pace of development of the EVP over the last 20 months, EVP warrants closer attention and active review by HR leaders. We expect GCCs to reimagine their EVPs across the four areas in 2022 to avoid long-term risk of losing competitive advantage due to higher salary and attrition.

• Hybrid working model: At a recently hosted EY GCC Leadership Forum, a virtual discussion with leaders from GCCs leaders across sectors and functions, the prime focus was on a hybrid working model and the need for flexibility, for both employees and employers. We expect the hybrid working model to become the new normal going forward in 2022 and a natural choice for GCCs in India. Hence, there is an urgent need to develop necessary policies keeping in mind employee productivity and well-being, company culture and business operations, to ensure long-term hybrid workplace success.
  
  
• Threat from cyber-attacks: In the last 12 months we have seen more instances of data breach due to remote working as compared to earlier years and loss of confidential information owing to increased cyber-attacks. This threat is likely to increase in 2022 on the back of digital transformation initiatives, hybrid working model, misinformation campaigns, ransomware attacks, deepfake technology, among others. GCCs should stay aware of these risks and make sure that they have the suitable solutions and measures in place to prevent them without disrupting their normal business flow.

(Sayan Banerjee and Saket Khanduri, Senior Managers at EY also contributed to this article.)