Global Capability Centers: Key Hotspots and India’s Rise as the GCC Capital

As per these derivations, the total cost of operating a 1000-member GCC operations team in the United States on average is estimated to be ~USD 134,400 per employee. San Francisco is the most expensive amongst our comparable universe of cities. On the contrary, the South Asian region is amongst the cheapest to operate a GCC. For instance, a similar cost in Bengaluru stands at ~USD 33,000, which is less than one-fourth the cost applicable in US cities on average.

Outside of the United States, cities such as Warsaw and Budapest in Central Europe attract 65-75% of the total cost prevailing in the US on average. The Central and Southern American cities of San Jose and Bogota reflect total costs similar to that prevailing in Warsaw. The six leading metropolitan cities of India that hosts bulk of the GCCs present in India so far, accounts for merely one-fourth the total cost prevailing in US cities on average.

Total Cost of Operations (TCO): GCC Hotspots relative to US cities (Base = USA 7-cities avg. = 100)

TCO analysis for GCC operations with 1000 employees: US cities’ avg. vs. Bengaluru

Total Cost of Operations (TCO) per employee

Talent cost (% of overall TCO)

RECO (% of overall TCO)

Cost Items

120

US 7-cities avg.

$134,430

89%

11%

100

Bengaluru

$33,083

89%

11%

80

Note: RECO = Real Estate Cost of Operations, includes Office Rent, CAM, fit-out and facility management expenses as per C&W internal research. Talent costs have been procured through secondary research and validated from human resource consultants.

60

40

The biggest component of this derived TCO analysis can be attributed to talent (89-90%), followed by the real estate cost of operations (RECO), which stands at 10-11% for both, US cities and Bengaluru. Baring few cities out of the 20 that we compared, this cost bifurcation broadly remains in the similar range.

20

-

12

13

GLOBAL CAPABILITY CENTERS:

Key Hotspots and India’s Rise as the GCC Capital