Chennai has long been recognized for its thriving global centers (GCCs), but now this trend is spreading to tier-2 and tier-3 cities in Tamil Nadu.
According to data shared by Guidance, the main agency involved in bringing investment to Tamil Nadu, the State is estimated to have more than 350 GCCs, more than 300 in Chennai and more than 25 in Coimbatore. Additionally, cities like Salem, Vellore, Madurai, Tiruchi, and Tirunelveli house GCCs. It is estimated that around 50 GCCs are operating outside Chennai.
Data provided by the Guidance showed that GCCs are estimated to employ more than 2.25 lakh professionals in Tamil Nadu, mostly in Chennai. Many companies are now including options to set up their GCCs in smaller cities. And as these centers start to pop up in smaller towns, they not only continue to grow the local economy but also create new opportunities for talent and innovation, officials said.
When asked why a tier-2 village, Naved Narayan,vice president-mobility solutions and head of the Coimbatore facility, Bosch Global Software Technologies (BGSW), said: “We chose Coimbatore for its great talent, entrepreneurial spirit, and established industrial system. The city has a strong foundation in automobiles and auto parts, including electrification,” and added, “We are working closely with local educational institutions to prepare students for the industry’s needs. Coimbatore fits well with BGSW’s future-ready strategy, helping us develop a skilled, future-ready workforce with ample opportunities to learn and grow.”
“Because the GCCs are looking for tech-savvy talent at industry intersections, Tamil Nadu is uniquely positioned, given the high level of urbanization and industrialization across the State,” said Ramkumar Ramamoorthy, partner at Catalincs. He said that GCCs had a good opportunity to incubate their operations on the campuses of educational institutions with good reputation like Honeywell did at Thiagarajar Engineering College in Madurai. This provides the GCCs with a perfect platform for joint research, faculty sabbatical, student internships, and other forms of industry-academic linkages for mutual benefit, he added.
Low operating costs, low attrition, social infrastructure, talent pool, and a hybrid work model post-COVID-19 are some of the reasons why small towns are emerging as the hub of the GCC. The Tamil Nadu government has also established Neo-Tidel parks in all major tier-2 and tier-3 cities to make available high grade-A office space for interested firms.
Gaurav Gupta, partner and industry leader, GCC, Deloitte India, said: “As GCCs grow, they are looking to expand coverage in new areas to attract and retain talent. This happened and was necessitated by the departure of talent, a few years ago following the COVID-19 pandemic. ”
Mr. Gupta said some of the mature GCC industries today are seeing high competition for the same talent, leading to high compensation and losses. “Mature GCC institutions have experienced a 30%-40% increase in talent costs and 60%-80% in real estate costs over the past four to five years. Therefore, tier-2 cities, like Coimbatore, offer access to trained/trainable talent with better salary and labor costs. Infrastructure in the major GCC and ITES areas has been under pressure due to rapid expansion and while the State government is taking steps to improve that, tier 2 cities are currently offering an advantage, although the extent of potential expansion varies from city to city and is limited there compared to the major GCC areas. ,” he added.
According to the GCC Office Guide 2024, a ready reckoner by Jones Lang Lasalle (JLL), India is home to more than 1,800 GCCs, employing more than 1.3 million people. GCCs or global in-house centers are offshore units of multinational corporations that operate worldwide.
These institutions were responsible for providing various support services, such as information technology services, finance, human resources, and statistics, to their parent organizations. In the past, these units were established primarily for offshore back-office processes, but this is not the case today. Today’s GCCs manage complex line items throughout an organization’s value chain. They have become centers of excellence, product development, innovation, strategy, and business transformation centers, according to the JLL guide.
Published – October 19, 2024 09:52 pm IST
Source link