GCCs Poach Top Talent From Indian IT Firms

The attrition is across multiple factors and multiple opportunities that people get outside. It could be GCCs, it could be competition, it could be employees going for further studies. There are multiple of those factors that play out there -- Jayesh Sanghrajka, CFO at Infosys

Bengaluru: Indian IT firms are witnessing rising poaching of top talent by GCCs (Global Capability Centres) as the talent war in key technologies intensify in recent quarters. According to industry experts and company officials, GCCs- technology captives of foreign firms- are attracting talent from IT firms at a better compensation, leading to increasing attrition. IT firms have to hire for those vacancies, usually at a higher wage, leading to an increase in wage costs.

During the fourth quarter of last financial year,IT firms have reported uptick in the attrition ratios. Sources in the know said that GCCs are poaching talent in the middle management level in recent quarters.“GCCs arehiring mid-level talent from IT services companies in multiple key technology domains. Especially, AI, ML, cloud and related domains are in high demand. These talents are getting hired from IT services firms with better compensation. This is one of the factors for slight uptick in attrition rates of Indian IT firms during the fourth quarter,” said a HR industry expert.

This trend has been highlighted by some large IT firms during the fourth quarter results.“The attrition is across multiple factors and multiple opportunities that people get outside. It could be GCCs, it could be competition, it could be employees going for further studies. There are multiple of those factors that play out there,” Jayesh Sanghrajka, Chief Financial Officer of Infosys has said during the Q4FY25 results announcement.

Notably, GCCs have emerged as one of the key growth drivers of Indian IT industry. They all together contribute around 25 per cent in revenue terms to India’s $280 billion strong IT industry.

India housed around 1,700 GCCs in FY24, generating $64.6 billion in exports. The segment hasalso emerged as one of the major employers of Indian technology talent by employing over1.9 million people, according to the Nasscom-Zinnov report.

According to industry experts, GCCs in India are doing cutting-edge technology work in the emerging domains. Therefore, the demand for AI talent among GCCs is higher. Notably, salary compensation offered by GCCs are usually 25-50 per cent higher than the IT services companies in India.

While talent war between IT firms and GCCs is likely to intensify in coming years, the engagement level of IT firms with GCCs are growing manifold.Many of Indian IT firms are building GCCs for their foreign clients on BOOT (Build-Own-Operate-Transfer) model. Under this model, IT firms are setting up GCCs for their foreign clients in India and manning the operations with their human resources. These will be transferred in future years when they mature. Through such engagements, Indian IT firms are able to preserve the revenue on their accounts coming from those clients.