In a world where supply chain disruptions, the rise of e-commerce, and climate change dominate headlines, companies are increasingly embracing digitalization to stay agile, relevant, and operate sustainably. This approach is at the core of modern business models, with analysts predicting that by the end of 2024, 55% of all investments in information and communications technology will be directed towards digital transformation initiatives.
While business focuses vary across industries, the tech skill sets required to achieve business goals remain largely consistent. Key skills in demand include product engineering, mobile engineering, artificial intelligence (AI), and machine learning, which are critical for building a successful business in the digital era.
Addressing the Tech Talent Shortage
As companies accelerate their digital transformation efforts, the demand for advanced digital skills is intensifying, putting immense pressure on the already tight tech talent market. In the U.S., the talent shortage is at an all-time high, with 69% of 2,000 employers reporting hiring challenges, particularly in tech skills. Gartner highlights that the lack of tech talent is a significant barrier to digital transformation initiatives, underscoring the urgent need to bridge this gap.
To tackle the talent crunch, companies must shift their mindset from selecting office locations based solely on financial factors to adopting a talent-first approach. This strategy offers competitive advantages and involves integrating and retaining globally distributed teams wherever the talent is available.
Finding and Integrating Talent
Adopting a talent-first approach to establishing a presence in a new geography comes with challenges. Setting up a branch office or subsidiary can be complex and time-consuming, requiring a deep understanding of the local talent market and labor laws.
Today, companies have several options to quickly hire and onboard global talent, including outsourcing, appointing an employer of record (EOR), or establishing a global capability center (GCC). These methods enable companies to leverage the uneven distribution of skilled tech workforces to support business models centered on digitalization, innovation, and agility.
Skills are often concentrated in regions where many companies lack a presence, such as emerging talent markets in India, central and eastern Europe, South America, and Central Asia. Developing successful globally distributed teams for the long term requires discovering, accessing, attracting, and retaining the right talent sustainably.
While outsourcing and EOR options allow for quick setup, these models often result in limited employer-employee engagement. In contrast, GCCs function as extensions of the parent company, sharing the same goals, policies, processes, and values, enabling full integration of GCC employees into the global workforce.
Advantages of Global Capability Centers (GCCs)
GCCs are often the preferred choice over EOR for several reasons:
- Superior Work Environment: Defined by a great culture, diversity, inclusion policies, and opportunities for innovation, learning, and development.
- Experiential Workplaces: Immersive, branded environments with world-class amenities and infrastructure.
- Career Growth: Access to cross-functional and global opportunities.
- Compensation and Benefits: Higher salaries and better benefits.
- Impactful Work: Higher quality and more meaningful contributions.
The Global Talent Hub and GCC employees enjoy the same career opportunities and company culture as their head office colleagues. According to tech industry leaders, company culture and employer value proposition are the top factors influencing GCCs’ success in recruiting and retaining tech talent.
Embracing Emerging Technologies
As technologies like AI, AR/VR, RPA, and IoT become integral to business operations, new job functions will emerge across global corporations and their GCCs. Retaining top talent in AI, data science, and DevOps will provide a competitive edge.
A Global Talent Strategy
To alleviate hiring pressures, companies should hire globally, not just locally. This strategy opens access to a wider talent pool and brings diverse perspectives and innovative ideas, essential for driving digital transformation.
Making GCCs Successful
For companies opting for the GCC approach, it’s crucial to have a defined vision and commit to long-term investments in people. Policies and practices must integrate global teams into the company’s culture, ensuring regular communication and opportunities for global interaction. Studies show that best-in-class GCCs offering a positive employee experience correlate with higher productivity.
A well-run GCC provides advantages over traditional outsourcing:
- Additional Savings: 15%-20% extra savings.
- Productivity Improvements: 20%-25% increase in productivity.
- Top Talent: Hires and develops the best global talent.
- Enterprise Capabilities: Develops skills in mobile, RPA, AI, and analytics.
- Capacity Building: Supports strategic priorities with global team capabilities.
- Open Innovation: Leverages the GCC ecosystem for innovation.
Conclusion
In conclusion, establishing global teams through GCCs is a strategic move that helps companies address the tech talent shortage and stay competitive in the digital era. By leveraging the advantages of GCCs such as access to skilled talent, cost savings, and enhanced productivity companies can drive their digital transformation initiatives and achieve long-term success. As the business landscape continues to evolve, companies that adopt a talent-first approach and build globally distributed teams will be well-positioned to thrive in the future.
Also Read:- Infrastructure and Connectivity: Essential Factors for Global Capability Centers in India
