Global capability centers : Opportunities in tier 2 cities

Global Capability Centers (GCCs) in India have traditionally been concentrated in metropolitan cities, including Bengaluru, Hyderabad, Pune, and Chennai, due to the availability of skilled talent, infrastructure, and industry ecosystems. However, according to Arjun S Harsh from leading real estate consultancy Excelsior India Consultancy Services LLP based in Chandigarh and Gurugram, rising operational costs, talent saturation, and increasing competition for skilled professionals are pushing GCCs to explore Tier 2 cities such as Mohali, Jaipur, Kochi, Indore, Coimbatore, and Bhubaneswar. These cities offer cost advantages, lower attrition rates, and a growing talent pool, making them attractive for GCC expansion.

According to research by Excelsior India, GCCs must focus on talent availability, skill development, and industry-academia collaboration to fully leverage this shift and ensure a sustainable workforce in tier 2 cities. These cities offer advantages in terms of cost-effective talent, with salaries being 20-30% lower than in metros, reducing operational costs for GCCs. Moreover, employees in Tier 2 cities exhibit higher retention rates due to better work-life balance and proximity to hometowns. These towns and cities also have a strong engineering college education base, producing a steady stream of graduates, while state government incentives include subsidies, tax benefits, and infrastructure support to attract GCCs.

However, relocation to Tier 2 cities is not without its risks either, as per Arjun S Harsh. Some challenges include skill gaps in terms of a mismatch between industry requirements and graduate skills. Other issues may include infrastructure constraints such as international connectivity and bandwidth issues, and a limited skilled talent pool as well.

To bridge the skill gap and build a future-ready workforce, GCCs can adopt the following strategies:

1. Strengthening industry-academia collaboration, including partnering with local universities to design customised curriculum aligned with GCC needs, establishing Centers of Excellence (CoEs) in emerging technologies (AI, IoT, data analytics) within colleges.

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2. Upskilling and reskilling programmes, such as launching corporate training programmes in collaboration with ed-tech platforms (Coursera, Udemy, UpGrad). Developing in-house certification programs tailored to GCC operations (IT/ITES, finance, engineering) and encouraging continuous learning through digital platforms and mentorship initiatives would help as well.3. Government and private sector partnerships under initiatives such as Skill India Digital to train professionals and collaborations with Nasscom, TiE, and other industry bodies to drive skill development. Supporting startup incubators would foster innovation and entrepreneurship in Tier 2 cities as well.4. Focus on soft skills and global competency, including training employees in communication, problem-solving, and cross-cultural collaboration to meet global client expectations, and implementing language training programs (especially for BPO/KPO GCCs).

In conclusion, Tier 2 cities present a compelling opportunity for GCCs to expand beyond metros. Proactive collaboration between corporations, academia, and government will be key to building a sustainable talent pipeline in India’s emerging GCC hubs.

(Excelsior India Consultancy Services LLP (www.eics-india.com) is a corporate services consultancy with offices in Chandigarh and Gurgaon. They can be reached here.

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