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H1-B blues: Here's why some techies are looking to join GICs

The challenging economic environment, US visa curbs and the disruption caused by Covid are pushing many a techie to look for work in the captive centres of multinational corporations. They may not get to travel overseas but the pay is good, as are the benefits and work projects

December 09, 2020 / 01:24 PM IST
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After working at a leading IT firm for 10 years, Sridhar (name changed), a techie, recently joined the global in-house centre (GIC) of a US-based engineering solutions firm in Chennai. He needed a better remuneration package, which IT firms were not offering. The opportunity to work abroad, which makes IT jobs attractive, has become uncertain due to the H-1B issue and also because of Covid-19. “So, I looked for opportunities and when I got a chance, I moved,” he said.

Sridhar is currently earning Rs 9 lakh as against Rs 7.5 lakh earlier. His peers in the captive centre, he said, earn as much as Rs 15 lakh or more for the same experience, something he had missed out working in the IT services industry.

Sridhar is not alone in shifting from an IT company to a GIC. In recent times, the challenging economic environment, US visa curbs and the disruption caused by Covid have led many a techie to look for steady work at a captive centre, say experts. They’re still looking for IT jobs, but they’re no longer restricting the search to IT services companies alone. And that’s where GICs come in.

Unlike IT services companies, which are vendors to their clients, GICs or captive centres are very much a part of the parent and their employees are a part of the company. These delivery centres are typically set up by multinationals in countries such as India because of the low-cost advantage.

A 2018 Peepal Consulting report states that there are 1,100 captive centres in India, employing more than 800,000 individuals and generating approximately $23 billion in revenue. Industry estimates indicate this number has now grown to about 1,400-1,500 captives employing about 12 lakh people.

Among companies that have set up captive centres in India are tech giants such as Google, and Amazon, banking and financial services firms such as JP Morgan Chase & Co and Citibank, and retailers Target and Walmart.

 Moving to captive centres

Sunil C, Head – Specialized Staffing, Teamlease Digital, a staffing firm, confirmed that there is increased interest among techies to move to GICs. For every 100 applications, only five were willing to work in a GIC close to a year back, he explained. “That too only after a lot of convincing as it means giving up the American dream,” he said. Now, the number has risen to 25 applicants for every 100.

Vikram Ahuja, co-founder, Talent500 by ANSR Consulting, said that his staffing company, too, has seen this shift over the last couple of years. “If the number of applications from IT services employees for positions in captives stood at 30 percent of the total a couple of years ago, it now accounts for about 50-60 percent,” he said.

Job openings in multinationals

While the opportunity to move abroad working with a GIC is slim at best, the benefits are better in comparison with what an IT services worker based in India would earn.

According to Sunil, a lot of cloud migration projects, cybersecurity and digital engineering work from the US and Europe have moved to GICs in India. This is reflected in increased job opportunities in the MNCs in India.

US-based Citibank has more than 400 technical roles such as cloud engineer, Java programmer, and app developer. Cisco is hiring more than 200 people for the profiles of data scientists, python programmers, and network engineers. Amazon is hiring for about 695 roles and JP Morgan Chase & Co has about 1,000 job openings in the country, with 620 in software engineering. Dell Technologies has about 390 jobs open currently in various roles including cloud engineers.

Attractiveness of captive centres

It is not just salary that attracts people to captives though. Take Sridhar, for instance; while he earns more now than what he would in an IT firm, the projects he works on are also more challenging and dynamic. Sridhar is more involved in the policy making process, which would never happen in an IT firm.

“Recently, our company changed the leave policy and some of us were chosen to help them in the process. So, every time there is a change or new policy, some of us are involved. It feels inclusive. It is impossible in a typical IT firm due to the sheer number of people working there,” he explained. The captive he works at employs about 500 people.

Career progression, too, is a lot clearer in captives than in IT firms, he added.

With captives growing, opportunities to find jobs with them will increase as well, especially for top talent.

If more people move to GICs, Pareekh Jain, founder, Pareekh Consultancy, said that it would be a challenge for IT firms to find top talent since the competition for local resources would increase. Without the carrot of onsite deployment, IT firms will be vying with captive centres and startups, who pay more for top engineering talent.

This would mean that to attract talent, IT firms would have to change their compensation package and provide a clear career trajectory for top talent, Jain said.

So is IT not attractive anymore?

According to IT executives, even without onsite deployment, the sector is still attractive.

In a recent interaction, VV Apparao, Chief Human Resources Officer of HCL Tech, said that travelling onsite has become harder as countries are looking for resources internally. “(But) It is tough to say if the attractiveness will go away,” he said.

There are multiple parameters that have made the IT industry attractive, Apparao said. Growth, compensation and benefits, and the ability to travel, especially for those wanting to become citizens of other countries, have made the sector attractive, he said. “The latter has become difficult,” he added.

However, Apparao added that as long as companies provide opportunities to grow and market competitive compensation, the industry would remain attractive. “I think we are quite competitive if not better than most,” he added.

Manoj Bhat, CFO, Tech Mahindra, said during a recent interaction that while opportunities to travel overseas may reduce, the IT sector will continue to be far ahead when it comes to offering opportunities to travel overseas.

Swathi Moorthy
first published: Dec 9, 2020 01:24 pm