Setting up your GCC- A 9-box model 

India has been a favorable offshoring/outsourcing destination for a long. Low costs of infrastructure, talent surplus, operational expertise, domain expertise, and many more factors have led to this steady growth of off shore centers. With the changing macroeconomic environment, there is an increased global in-house center (GIC) activity in India which is not just driven by a need to have greater control of some of the off shored processes but also to build domain capability that could completely change the kind of work which is delivered from these GICs. It is no wonder, therefore, today 750 plus captives operate out of India and the base is growing both in numbers and diversity from an industry standpoint.

What started as a contact centre industry with GE setting its call centre, the industry has grown across domains – banking, pharma and life sciences, retail and with horizontals right from F&A to analytics to technology operations of the largest banking set up.

What goes into making a good global in-house centre, let us start from the foundation and work all the way up! Hence, what are some of the imperatives of talent during the build stage of a GIC?

Our 9-in-a-box approach finds the way out for HR leaders of this talent maze. The continuum of total rewards and talent management can be drawn along these 9 blockers during the build stage of a GIC or a particular process. The focus on each of these blocks would evolve and change as the organization moves from the build to the mature stage. THE 9-BOX MODEL FROM INITIATION TO 18-MONTH JOURNEY.

When a global player plans to set up a captive or insource its operations, the first million-dollar question is, the location of the center, and rightly so – the location will not only determine the short-term ability to start from ground zero to become functional but also impact the long term sustainability and success through infrastructure costs, talent pipeline availability, leadership availability and managing the overall operations and governance of the center.

Hiring for those levels, both in quality and quantity can be addressed by looking at talent maps within the country and the concentration of kind of work in specific regions: 

1. think NCR and BPO come to mind perhaps boasting of the earliest contact centers
2. think Mumbai and the Financial capital of India come to mind hence no wonder most banking captives operate out of there.
3. think the South and IT Capital of India comes to mind hence most IT captives are based out of Bangalore, Chennai, or Hyderabad (and in tier 2 locations as well). Hiring for those levels, both in quality and quantity can be addressed by looking at talent maps within the country and the concentration of kind of work in specific regions: 

Balance has to be drawn between cost and quality of talent to maintain a sustainable ecosystem. 

At the initial stage, GICs may also look at moving talent internally from other parts of the world or India to the entity during the build stage of the organization. HR needs to be mindful of creating a separate framework of total rewards management for this set of talent as the convergence of the two frameworks would create an imbalance in the ecosystem and disparity. The cost of buying talent from the shared services industry for the same role is considerably different as compared to the mainstream industry, with the differentials peaking at 70 percent across some roles. 

Demographics of talent which is employed in this industry have led to the localization or customization of multiple aspects of

1. Careers and sub-banding; most GICs have on average 9-10 bands, including sub-bands to support such frequent expectations of career progressions. 
2. Staying competitive in pay is important, more so, when a new entity is being set up. GICs are known to be competitive on pay in comparison to third-party players. What is important however to understand and implement is: global in-house centers Some of these allowances provide Income tax benefits with certain caps and hence many organizations allow employees to structure their pay by choosing the type of allowance and quantum they want in their salary.
3. Differentiation based on job functions and skills has been prevalent in India, most global GICs have created differentiated pay ranges for different segments of work, for example, one to support operations, another for technology, and a third to support analytics hiring. Hence, leading to a functional pay range structure, rather than a singular banding structure.
4. It is common that companies stack up various components of salary and offer the same as CTC- Cost to Company- which is a common term in India. When someone mentions CTC, it may mean different things in different industries.
5. Benefits in India have typically been hierarchy dependent, and some most prevalent ones have been in-patient benefits with a family floater, accidental insurance, and car. Though it is seen to remain relevant to Generation Z as well as carve out a distinct EVP, employers are taking strong and steady steps towards various innovative benefits like leave pooling or unlimited leaves, world-class maternity leaves (recently updated) to new parents’ benefits, sabbatical leaves to experiential holidays and the whole hog

An important dimension for GICs to address is the need for client / external facing titles in India, which sometimes can be a make-or-break issue given the sensitivity. Finally, to stay sought after, a GIC needs to bring all its offerings under one compelling framework that truly differentiates it – and through this, the Total Rewards Framework gets defined, tying the pieces of competitive compensation, innovative and personally relevant benefits, compelling careers and learning opportunities and work lifestyle to manage several coexisting yet sometimes conflicting priorities seamlessly! That is truly an EVP that attracts, binds, and helps retain talent on cost optimization questions that will come 5-6 years down the line. Hence, there needs to be a balanced evaluation of all of the above aspects to create what will attract and retain talent in the GIC in the first 2-3 years of setup.

Finally, what is the individual value proposition of the GIC? Is compensation the only lever to attract talent in India in this space? The answer is no, buying talent should not be a long-term strategy for GICs because eventually questions.

“A complex problem statement that stares the HR fraternity in the face in a ‘millennial industry’. However, if one follows and focuses on the 9-box approach, there is a method of resolving this madness over some time.”

Mansee Singhal
India Career Leader, Leading Rewards and Talent Advisory
Mercer India

Sreemoyee Gupta
Director Compensation Consulting
Mercer India