The Rise of Hybrid Work Models in Global Capability Centers

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What will the workplace of the future look like? It will be a dynamic environment where technology, flexibility, and human-centric design converge to create a more efficient and engaging employee experience. This powerful blend of adaptability, creativity, and inclusiveness drives the evolution of work and the same applies to Global Capability Centers as well.

Previously, GCCs were seen as cost-effective back-office operations, however, they have now evolved into innovation hubs that shape global business strategies and redefine workplace standards. Crucial to this evolution is the hybrid work model. Many Indian corporations, such as Deloitte India and KPMG, are shifting towards hybrid work models in 2025. This model harmonizes productivity with flexibility, creating new opportunities for talent and collaboration worldwide. This blog explores the future of the workplace, focusing on the role of GCCs in shaping this transformation.

The Transition to Hybrid Work ModelsThe Transition to Hybrid Work Models

The COVID-19 pandemic brought about profound changes in workplace flexibility, forcing global businesses to recognize the need for remote work and adapt rapidly to this new operational model. The transition to GCCs sped up the implementation of hybrid work models, integrating on-site functioning with remote working arrangements.

A 2023 report from McKinsey indicated that companies implementing hybrid work experienced increased productivity. Approximately 59% of employees preferred flexible work conditions (McKinsey & Company, 2023). In India, IT professionals prioritize work-life balance and location flexibility. This has proven particularly advantageous for GCCs in such competitive labor markets.

The Advantages of Hybrid Work Models in GCCs   

  • Access to a Global Workforce :
    Through workforce enablement, GCCs globally have access to a broader talent pool. This has proved beneficial in countries such as India and the Philippines, where competition for skilled workforce is high. Hybrid work setups enable GCCs to attract and retain top talent. They allow employees to choose between working from home or the office.
  • Cost Savings:
    The adoption of hybrid models has reduced utility costs and operational expenses, such as office space costs. A 2022 Global Workplace Analytics report stated businesses can save huge costs through an effectively executed hybrid work strategy. This amount was predicted to be around $11,000 per employee every year.
  • Enhanced Collaboration and Innovation:
    Modern collaboration tools like Microsoft Teams, Slack, and Zoom enable effective communication among remote teams. Global teams work together on innovative solutions in a hybrid framework that encourages a variety of viewpoints. GCCs benefit from combined expertise that propels business strategies ahead.

Challenges in Adopting Hybrid Models:

While hybrid work models offer numerous benefits, they also present challenges that GCCs need to address:

  • Fostering Team Cohesion:
    A key challenge of hybrid work models is balancing remote and on-site teams. Communication gaps and collaboration difficulties can arise, leading to inefficiencies. Technology issues and scheduling conflicts further complicate coordination. Additionally, maintaining company culture and addressing security concerns is crucial to ensure seamless operations. To ensure productivity regardless of their work locations, it is crucial to ensure seamless communication and collaboration between teams.
  • Cybersecurity Risks:
    Cybersecurity threats are high as employees access sensitive information from remote locations. Cybersecurity and employee cybersecurity training are critical issues requiring immediate attention. GCCs must invest in comprehensive cybersecurity measures, including multi-factor authentication, endpoint safeguarding, and routine audits. As highlighted in the EY survey report below, the risk of a data breach due to hybrid working is a significant concern for GCCs.

    Hybrid Work Models challenges infographic
    Data Source: EY’s Global Capability Center (GCC) Pulse Survey 2024
  • Infrastructure and Technology:
    The effectiveness of remote work hinges on the availability of appropriate tools and infrastructure. Therefore, GCCs will be responsible for equipping their employees with the necessary resources, such as high-speed internet connections, comfortable and ergonomic workspaces, and secure VPNs.

Key Approaches for Effective Hybrid Work Models

  • Invest in Technological Solutions:
    Selecting and implementing the right digital tools for the business is crucial. From project management systems like Trello and Jira to virtual communication solutions, an appropriate tech stack can enhance hybrid work efficiency.
  • Emphasize Employee Engagement:
    Frequent virtual check-ins, training sessions, and team-building initiatives can boost employee satisfaction and retention rates.
  • Establish Cyber Security Protocols:
    Businesses must prioritize data integrity and regulatory compliance by implementing secure access procedures, data encryption, and real-time monitoring.
  • Hybrid Work Models and DEI (Diversity, Equity, Inclusion) Initiatives:
    Hybrid work models in GCCs focus on creating inclusive work environments and enhancing operational efficiency. According to an Inductus report, 60% of GCCs worldwide have enforced policies to enhance gender equity, neurodiversity, and inclusivity.For example, Accenture’s GCC in India aims to achieve a 50:50 gender balance by 2025 through focused recruitment and mentorship initiatives. This commitment to diversity is fostering better representation and increased opportunities for all employees within GCCs.
  • Employee Well-being in Hybrid Work Models:
    In the hybrid work era, employee health and happiness are a major focus. Specialized mental health initiatives that provide resources like counseling, wellness workshops, and seminars on stress management are offered by more than half of GCCs worldwide.Many organizations have invested heavily in AI-driven tools for employee well-being. These tools track stress due to workload and suggest strategies to help employees achieve a balanced work-life dynamic. This approach is part of a larger effort to provide flexible working options and ensure that employees feel supported in all dimensions of their professional and personal lives.

The Future of Hybrid Work in GCCs  

The hybrid work model is more than a fleeting solution; it serves as a sustainable strategy that corresponds with the changing expectations of the workforce and the needs of businesses. As GCCs continue to evolve and innovate, the hybrid work model will remain integral to their development narrative. According to a 2023 McKinsey report, companies adopting hybrid models saw a 7% increase in productivity.

We at Astravise Services can guide you through the complexities of labor laws and regulations to maintain compliance and reduce risks. We also create and execute effective compensation and benefits packages, drawing in and keeping the finest talent for your GCC. Our comprehensive strategy merges talent recruitment, process enhancement, and technology integration, guaranteeing a successful GCC experience. We offer highly customizable services that can be tailored to align with specific requirements perfectly.

Establish your Global Capability Center (GCC) in India with the support of Astravise Services to create a future-ready organization.

Book your free consultation now.

 

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2024 MSME Crisis: Strategies for Sustainable Growth

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The MSME sector in 2024 is at a critical turning point, with businesses navigating challenges like funding constraints, scaling hurdles, and technological transitions. As enterprises adapt to changes, numerous stories of perseverance and innovation emerge in India. They emphasize a shared opportunity, despite varying causes. The opportunity is to unlock a new age of growth and pave the way for a brighter future, by refining strategies and embracing upcoming technologies.

The sector has grown stronger by leveraging government initiatives and adapting to significant changes in the economic landscape. MSMEs are now poised to drive India’s economic growth, create jobs, and contribute to global markets. This resilience underscores the indomitable spirit of Indian enterprises, as they build a future defined by adaptability, innovation, and collaboration.

Recent data from the Ministry of Micro, Small & Medium Enterprises (MSME) indicates that Indian MSMEs have been severely affected by the second financial downturn. Official statistics show that since 2022, more than 61,000 MSMEs have closed, with over 12,000 closures occurring in the past four months alone. Regions like Maharashtra, Tamil Nadu, and Uttar Pradesh have experienced some of the highest numbers of shutdowns, highlighting the widespread nature of this crisis.

The total count of MSMEs closed in different states - Astravise Services

The total count of MSMEs closed in different states | Data Source: Financial Express

According to MSME Minister Jitan Ram Manjhi, closures have been linked to changes in company ownership, redundant certifications, and duplicate registrations. These administrative hurdles have made it difficult for some businesses to sustain operations.  

The reasons behind these closures are multifaceted. They are as follows:

  • Increasing Operational Expenses: Inflation has caused a substantial increase in the costs of raw materials, energy, and logistics. This, combined with decreasing consumer demand in major sectors, has resulted in an unsustainable cost structure for many MSMEs.
  • Technology and Scalability Challenges: Many MSMEs struggle to implement new technologies and achieve significant growth. Their lack of access to affordable R&D facilities impedes their ability to innovate and stay competitive.
  • Poor Financial Planning: A lack of structured financial planning, including effective management of working capital and cost efficiencies, has left numerous businesses vulnerable to external pressures.
  • Global and Macroeconomic Influences: Ongoing geopolitical instabilities and a slowdown in the world economy have undermined investor confidence and disrupted supply chains, making it difficult for MSMEs to sustain their operations.
  • Inadequate Infrastructure: A significant number of MSMEs are located in regions with insufficient road networks, unreliable electricity supply, and limited access to water and sanitation services. These shortcomings elevate operational expenses and diminish productivity, posing challenges for MSMEs when competing with bigger businesses.
  • Regulatory Compliance: MSMEs encounter intricate and burdensome regulatory frameworks that involve numerous approvals and compliance obligations from different government agencies. The frequent alterations in regulations create an additional layer of difficulty, making it challenging and confusing for MSMEs to remain informed and compliant.
  • Access to Credit and Lending Practices: Many MSMEs struggle to secure timely and adequate credit from banks and other financial institutions. Factors such as insufficient collateral, a lack of comprehensive financial documentation, and unfavorable credit ratings contribute to this challenge. Consequently, a large number of MSMEs remain undercapitalized, which limits their growth capabilities and competitiveness.
  • Issues with Credit Lenders: MSMEs face various challenges when dealing with credit providers. High interest rates, stringent lending criteria, and the economic impacts of global downturns can limit their access to crucial funding. Such obstacles often create a significant credit gap, leaving many MSMEs without the financial resources they need to thrive.

Impact of MSME Closures in India

The closure of MSMEs in 2024 has had a considerable impact on local economies, employment rates, and the overall manufacturing output in India, with more than 61,469 MSMEs reported to be shut down since the Udyam Registration portal’s launch, resulting in a job loss of 317,641 by July 2024. This downturn not only jeopardizes the income of millions but also disrupts local economies, as MSMEs are responsible for around 40% of India’s manufacturing output and are vital for job creation. The reasons for these closures include escalating operational expenses, low demand, competition from inexpensive imports, and regulatory challenges.

Key Initiatives for MSME Support in Union Budget 2024

In the 2024 Union Budget, the Indian government unveiled several significant initiatives aimed at assisting MSMEs. These initiatives include the Credit Guarantee Scheme for loans without collateral, an increased Mudra Loan Limit under the ‘Tarun’ category, and a reduced TReDS Onboarding threshold to boost liquidity. Furthermore, there is provision for struggling MSMEs to secure ongoing bank credit, the establishment of E-Commerce Export Hubs to facilitate access to international markets, and the creation of 12 plug-and-play industrial parks as part of the National Industrial Corridor Development Programme to lower operational costs. The Reserve Bank of India (RBI) has implemented initiatives to support MSMEs, including Priority Sector Lending (PSL) guidelines that mandate banks to allocate a portion of their lending to these enterprises. Additionally, the RBI has introduced programs to improve credit access, such as linking loans to external benchmarks for better monetary policy effectiveness. These policies are designed to promote growth and sustainability within the MSME sector, acknowledging its essential role in India’s economic progress.

How Astravise Services Can Support MSMEs:

How Astravise Services Can Support MSMEs

Astravise Services offers customized CFO and CHRO solutions that include fundraising assistance, that is designed to address the specific challenges faced by MSMEs in the current economic landscape.

Strategic Financial Management: Astravise Services’ CFO services assist MSMEs in optimizing their cash flow and managing working capital effectively thereby extending their financial lifespan. Strong financial strategies, backed by our expertise, empower businesses to achieve profitability while strategically allocating resources for growth.

Furthermore, we provide fundraising assistance by guiding companies in improving their financial performance and developing a robust action plan to attract and manage investor confidence.

Regulatory Compliance: We also help MSMEs navigate complex regulatory environments by streamlining the processes and providing guidance on compliance requirements. This includes assistance with obtaining necessary certifications, maintaining up-to-date records, and leveraging your MSME certification to its full extent.

Enhancing Operational Effectiveness: MSMEs can greatly reduce expenses by optimizing their operations and adopting lean practices. We offer expert advice in cost optimization and re-evaluating business processes for utmost efficiency.

Workforce and Organizational Strength: The CHRO services aim to build strong organizations through workforce planning, skill training, and employee engagement initiatives. Retaining and motivating essential talent is crucial for business survival and development during uncertain times.

Embracing Technology and Innovation: We assist MSMEs in utilizing cost-effective technological solutions to boost productivity and scalability. From digital transformation efforts to collaborative research and development opportunities, these strategies prepare businesses for sustained success.

Recognizing the budgetary constraints often faced by MSMEs, we prioritize flexibility and customization in all our service offerings. This ensures that you receive the highest possible value within your budget. Schedule your free consultation today and explore how our tailored solutions can effectively address your specific business needs and contribute to your growth journey.

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How GCCs are Driving Innovation in India’s tech landscape

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Establishing GCCs in India initially presented several key challenges: inconsistent infrastructure, high attrition, regulatory complexities, cultural fit, poor connectivity in Tier-2 and Tier-3 cities, cumbersome administrative hurdles, and the need for Indian subordinates to adapt to international conduct codes, making talent retention a significant challenge.

Today, the situation has drastically changed. High-tech IT parks, seamless internet connection, and government policies such as Digital India and Make in India have revolutionized the tech industry. Emerging Tier-2 and Tier-3 cities now have the infrastructure needed for GCC operations at an affordable price. Initiatives such as Skill India and corporate and academic partnerships have effectively reskilled the workforce, creating a sustainable talent pipeline. Each successive improvement not only overcomes the initial hurdles but also establishes a significant competitive advantage, thus enhancing India’s appeal to GCCs compared to other countries.[/fusion_text][/fusion_builder_column][/fusion_builder_row][/fusion_builder_container][fusion_builder_container type=”flex” hundred_percent=”no” hundred_percent_height=”no” hundred_percent_height_scroll=”no” align_content=”stretch” flex_align_items=”flex-start” flex_justify_content=”flex-start” flex_wrap=”wrap” hundred_percent_height_center_content=”yes” equal_height_columns=”no” container_tag=”div” hide_on_mobile=”small-visibility,medium-visibility,large-visibility” status=”published” border_style=”solid” box_shadow=”no” box_shadow_blur=”0″ box_shadow_spread=”0″ gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ background_position=”center center” background_repeat=”no-repeat” fade=”no” background_parallax=”none” 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Technological Expertise: The Cornerstone of Success For GCC in India

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India has a large pool of resources in advanced technological competency areas needed by GCCs. These centers thrive on such talent reserves, making it possible to create a Center of Excellence (CoE) and foster innovations. A report by EY indicates that 26% of the GCC respondents plan to hike their budget on technology and transformation projects,20% over the total budget, aiming to optimize operations and drive innovation.

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1. Abundance of Expertise in Emerging Technologies

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India’s software tech professionals are the leading contributors to innovation across Artificial Intelligence (AI), Machine Learning (ML), blockchain, cybersecurity, and cloud solutions. Further details are provided below:

AI and ML

Artificial Intelligence (AI) and Machine Learning (ML) are rapidly evolving fields in India. They have significantly contributed to advancements in predictive analytics, natural language processing, and autonomous systems. For example, Microsoft’s Indian GCC has played a key role in advancing AI on the Azure platform.

According to the EY survey, 78% of GCCs are upskilling their teams for GenAI adoption, particularly in customer interaction through applications such as automated chatbots, personalized support, and sentiment analysis.

Blockchain

This technology is among seven anticipated to transform society and work. As more new projects breakthrough in decentralized finance (DeFi) and new digital currencies, Indian specialists are at the forefront of creating blockchain solutions. Blockchain technology is evident in secure transactions and smart contracts within GCCs in financial services, evidenced by JPMorgan, Bengaluru.

Cybersecurity

With hybrid and remote work models becoming the new normal, cybersecurity threats across the globe have grown significantly, thus creating a niche for Indian cybersecurity professionals. IT giants like Cisco rely on services from India to furnish risk management services for their international clients and manage complex security services. 

According to an EY survey, 73% of participants believe cybersecurity and employee cybersecurity training are critical issues requiring immediate attention.

Cloud Computing

India’s cloud market is booming, and it is expected to reach $10.8 billion by 2025. This growth is attributed to the increased support from the government, as seen by measures like “Digital India.” For instance, Google’s Indian workforce largely drives the fine-tuning of its cloud services technology and utilities. This demonstrates the significant value a GCC in India can offer.

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2. Enabling Centers of Excellence

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Indian GCCs are gradually moving ahead from being mere back offices to becoming Centers of Excellence (CoEs) by integrating technology and business knowledge. These CoEs specialize in:

  •   Creation of new fields and next-generation products and services.
  •   Enabling digitization initiatives of multinational organizations.
  •   Optimizing business processes with the help of artificial intelligence.

Thus, the skill of synchronizing technology development with business results is the key to the dominance of Indian talent in GCCs.

[/fusion_text][fusion_title title_type=”text” marquee_direction=”left” marquee_speed=”15000″ rotation_effect=”bounceIn” display_time=”1200″ highlight_effect=”circle” loop_animation=”off” highlight_width=”9″ highlight_top_margin=”0″ title_link=”off” link_target=”_self” content_align=”left” size=”3″ text_shadow=”no” text_shadow_blur=”0″ text_stroke=”no” text_stroke_size=”1″ text_overflow=”none” gradient_font=”no” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ style_type=”none” animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” fusion_font_variant_title_font=”400″ fusion_font_family_title_font=”Poppins” font_size=”24″]3. Integration with other teams across the globe[/fusion_title][fusion_text animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky”]

Indian professionals have the technical skills as well as the insight regarding various global business environments. This allows GCCs to:

  •   Collaborate with people from different locations.
  •   Tackle region-specific issues with region-specific technical solutions.
  •   Global ideas for innovative cultural markets.

An example is IBM’s GCC in Bengaluru, which collaborates with international teams while delivering state-of-the-art, practical AI-based supply chain solutions.

As part of our GCC services, we implement robust governance and seamless integration that ensures GCCs can effectively connect with global teams. Our custom frameworks help companies maintain synchronization between geographically spread-out teams, enhancing productivity and innovation.

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4. Accelerate the transformation to digital

[/fusion_title][fusion_text animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky”]For GCCs aiming for strategic growth through digitalization, the adaptability and innovative mindset of Indian professionals are indispensable. Hence, these centers play pivotal roles in:

  •   Transforming monolith applications to cloud-based native structures.
  •   Integrating AI tools in working processes that formerly were manual operations.

Improving customer satisfaction through analytics and automation by chatbots.[/fusion_text][fusion_title title_type=”text” marquee_direction=”left” marquee_speed=”15000″ rotation_effect=”bounceIn” display_time=”1200″ highlight_effect=”circle” loop_animation=”off” highlight_width=”9″ highlight_top_margin=”0″ title_link=”off” link_target=”_self” content_align=”left” size=”3″ text_shadow=”no” text_shadow_blur=”0″ text_stroke=”no” text_stroke_size=”1″ text_overflow=”none” gradient_font=”no” gradient_start_position=”0″ gradient_end_position=”100″ gradient_type=”linear” radial_direction=”center center” linear_angle=”180″ style_type=”none” animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky” fusion_font_variant_title_font=”400″ fusion_font_family_title_font=”Poppins” font_size=”24″]5. Availability of Specialized Training Programs[/fusion_title][fusion_text animation_direction=”left” animation_speed=”0.3″ animation_delay=”0″ hide_on_mobile=”small-visibility,medium-visibility,large-visibility” sticky_display=”normal,sticky”]

Indian institutions are actively adapting their training programs with strategic alliances to meet the evolving needs of the job market and produce qualified technicians. According to a survey, 50% of participants stated that they are in the process of reskilling their existing staff as compared to 36% last year.

For example, Google’s Indian GCC collaborates with IITs, providing its employees with AI research training through specialized certification programs for complex projects.

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IT Clusters in India

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With over 1,700 centers, India is a prime location for GCCs, with 90% located in Bengaluru, NCR Delhi, Mumbai, Hyderabad, Pune and Chennai.

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DATA SOURCE: NASSCOM

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Why Choose Bengaluru, Chennai, and Hyderabad for GCCs

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Bengaluru stands out as the “Silicon Valley of India,” with 34-35% of GCCs located here. Its vast talent pool and innovative startup ecosystem create an attractive environment for companies looking to establish or expand their GCCs. Bengaluru is the largest IT hub, featuring over 30 IT parks, such as Electronics City, Whitefield, Outer Ring Road, and Marathahalli.

Hyderabad, hosting 12-13% of GCCs, has undeniably made its mark as a burgeoning IT hub. These factors, along with the city’s rapid IT sector growth, make it an attractive locale for multinational companies looking to establish a strong presence with their GCCs. The IT sector is primarily concentrated in Gachibowli, Madhapur, and Nanakramguda.

Chennai, contributing 9-10% of GCCs, is a hidden gem. The city brings a unique advantage with a solid industrial foundation, top-notch educational institutions, and a rapidly growing IT sector. Home to southern India’s largest operational IT SEZ is the 43-acre DLF IT Park, also known as DLF Cyber City.

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Is Setting up a GCC in India the Next Step for You?

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The future for GCCs in India is bright, given that AI and automation breakthroughs allow GCCs to move human capital from transactional roles to transformational roles. Advanced data analysis will further improve decision-making processes while strong cybersecurity measures will become crucial as cyber threats continue to grow in sophistication and frequency. Organizational success hinges on attracting and retaining top talent, necessitating significant investment in blended learning environments, adapting to remote and hybrid work models, and fostering a positive corporate culture. 

Astravise Services has experience assisting global organizations in setting up GCCs in India, as well as holistically managing the GCC operations on behalf of our clients. Recognizing that each client’s need is different, we offer highly customizable services that can be tailored to align with specific requirements perfectly. We have an extensive network of partners that can help your organization accelerate the process and integrate with the established IT clusters in India.

We also provide strategic CHRO services that support organizations in human capital management, leadership development, learning and development, and succession planning.

Book your free consultation now.

Source: Global Capability Center (GCC) Pulse Survey, Business Today, Inductus report

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