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

Considering setting up GCC operations with 1,000 employees, the cost of talent has been determined using a commonly observed hierarchical bifurcation starting from leadership, down to mid-managerial positions and support functions, as exhibited in the adjacent chart.

Assumption: Break-up of Human Resource by Seniority / Payscale

2%

LEADERSHIP

10%

15+ YRS (SENIOR)

15%

10-15 YRS (MID TO SENIOR)

30%

10-15 YRS (MID)

For an occupier who is considering setting up GCC operations overseas, four major cost components must be broadly investigated:

35%

0-5 YRS (ENTRY-JUNIOR)

8%

SUPPORT FUNCTIONS

Human resource, or talent

Leasable Area per Employee (sft.)

120

Six Indian cities^ avg.

Office occupancy cost (Rent + Common Area Maintenance, or CAM charges),

107

Philippines (Manila)

116

Mexico (Mexico City)

116

San Jose (Costa Rica)

116

Bogota (Colombia)

Fit-out cost

100

UK (London)

108

Budapest (Hungary)

108

Warsaw (Poland)

Facility Management cost

191

Seven US cities^^ avg.

^Indian cities - Bengaluru, NCR-Delhi, Mumbai, Hyderabad, Pune, and Chennai ^^USA cities - San Francisco, New York, Atlanta, Dallas, Austin, Boston, and New Jersey Note: For US cities, the leasable area per employee ranges between 160 to 225 sq. ft. per person across the cities considered in our study.

In this chapter, we will be looking at comparing the four major cost components across 9 countries that also includes GCC host nations of the US and UK, alongside nations that are popular recipient of it, spanning regions across America, Europe, South Asia, and ASEAN. Within these nine countries, we take a closer look at 20 cities that are known to be gateway cities for businesses in their respective countries, and most of these have received biggest influx of GCC firms over the years. The section entails a comparative analysis of the total cost of operations (TCO) of a GCC set-up across the featured 20 cities, also having a look into its break-up in terms of talent cost and real estate cost of operations (RECO).

The average office space per employee (i.e., office density) can vary across regions, thereby having an influence over the total cost of setting up GCC operations. In the seven cities considered within the US, average office density observed is 191 SF per employee, whereas in the European gateway cities of London, Budapest and Warsaw, it ranges be tween 100-110 SF per employee. In the gateway cities of India and Philippines, the office density is observed to be in the range of 105-120 SF per employee. We have considered these averages for arriving at total cost across comparable cities.

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GLOBAL CAPABILITY CENTERS:

Key Hotspots and India’s Rise as the GCC Capital