The Pyramid Game -Indian IT Services firms vs GCCs---How GCCs getting dominant over time...

With the IT recession exposing "employee farming" practices as adopted by service firms, "TCS continues its focus on leveraging internal talent through upskilling and cross-skilling for growth opportunities. In FY 2024, 33% of job requirements were fulfilled through grooming its internal talent," said Tata Consultancy Services (TCS) in its annual report for 2023-2024.

This is a commendable move by TCS, and I believe most large and midsized IT service firms would follow suit!
This move will restrict the in-market hiring frenzy for the future, when the market picks up (likely in mid-2025). And it goes without saying that we will see very few mass layoffs that we saw in the last post-COVID hiring led bloat!
This move would obviously worry staffing firms, who fed on the hiring frenzy!
https://lnkd.in/gvJbjitc
Indian IT Services firms have a very effective cost-to-profitability ratio on their service delivery cost pyramid, as HSBC Research Report cites (Check article: "GCCs driving 23% of India's IT exports" in TOI, 20th May 2024).
The same report confirms that GCCs have advantage of domain expertise, while Indian IT services firms edge them through their IT tech superiority!
Remember, we are not talking about IT OEMs or platform or enterprise application software firms here...in these cases, GCCs or their parents have natural advantages.
We all wonder, how, GCCs for same IT skills, pay between 30 and 50% higher base pay than the Indian IT services firms and the simple answer is their Pyramid that is OK with lower margins to cost, while Indian IT services firms have much higher margins. This justifies the saying, that Rewards (Compensation and benefits) is a matter of Capacity and Willingness to pay!
Ask anyone in Mercer, Willis Tower Watson, etc. and they will tell you, how as a strategy, the GCCs in India have a higher willingness to keep their Pay and benefits, not just more attractive but meaningful, over their Indian counterparts! Tarang Paradkar
Think why GCCs don't compete with anyone when it comes to Rewards?
Side note:
1. In my Yoga class, the don't category of guidelines says: Don't compete with others! :)
2. In Coffee With Karan show, Rani Mukherjee was asked: Where are you in the number game of Bollywood heroines?
She answered: I am a bitch, I don't run with rats!

It has been a decade or more and this statement of Rani has a very special fan following!

Disclaimer: I am not trying to denigrate what Indian IT Services companies do. Just that, 50% of their smart hires, who leave them early, join GCCs! Can't blame your model!

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