Global uncertainty hits hiring at GCCs

Bengaluru: Global Capability Centres (GCCs) of multinational corporations (MNCs) in India have put a brake on hiring in the last three months with overall addition of employees coming down by 25-30 per cent. Officials of top HR firms said the phenomenon is widespread with both European and US companies going slow on hiring owing to overall recessionary fears in these two geographies.

"Global captives have slowed down hiring in the last three months. The numbers are down by around 25-30 per cent (in sequential term). This is not limited to European firms alone. Even US-headquartered companies with technology centres in India have reduced hiring to a large extent," CIEL HR Services CEO Aditya Narayan Mishra told Bizz Buzz.

"Even back filing of vacant positions is not taking place. These captives are also resorting to merging of positions. So, new employee addition numbers are considerably down," he added.

India is home to more than 1,500 GCCs, which has seen a CAGR of 11 per cent during FY15-FY21 period. These captive centres of global firms collectively employ more than one million people in India with a majority being software engineers. Hyderabad and Bengaluru are the two major metro cities with maximum number of such captives in India.

After a phase of aggressive hiring with attractive compensations, these GCCs are going slow in headcount addition. This is majorly driven by recessionary fears in the US and Europe. While US Federal Reserve is raising interest rate to fight inflation, all European countries are now staring at a large economic disruption on the back of lack of supply of oil & natural gas from Russia. Key economies including Germany, France and UK are likely to slip to recession towards the end of this year.

Such economic uncertainty is prompting GCCs to be cautious in hiring front. Experts said such trend is likely to persist during the rest of this year. Meanwhile, low hiring by Indian GCCs brings good news for the Indian IT services companies which are battling with record employee attrition numbers in the last one and half years. Most large and mid-tier firms reported an attrition of more than 20 per cent in the first quarter of current financial year.

Due to tough competition from GCCs and startups, Indian IT firms have to raise the employee compensation substantially in the last one year. Therefore, slow hiring by these two sectors are likely to give some relief to domestic IT companies in coming quarters.