GCCs to see better salary hikes, compensation compared to IT services segment

The Global Capability Centers (GCCs)  segment is expected to see better salary hikes this year compared to the Indian IT services segment. As per the latest report from ANSR, “Increment and Compensation Trends in GCCs,” increments will remain strong in the GCCs segment projecting an average salary hike of 9.9 per cent. At the same time, overall attrition in the GCC segment in India has declined to 16.9 per cent, with voluntary attrition at a record low of 12.6 per cent in 2024, reflecting greater investment in career growth, culture, and employee experience. 

 

India is projected to house over 2,400 GCCs and 4.5 million professionals by 2030 but in comparison to the GCC segment market reports, the salary hikes in the Indian IT services sector will be in the range of 4 to 8 per cent due to uncertain economic challenges and the rise of AI. 

 

Experts point out that deferring salary hikes, making variable salary a bigger part of the total salary, strict monitoring of employee performance and productivity, and aggressive management of resources on bench are the methods IT services companies will deploy to deal with the volatility and uncertainty in the business environment. 

 

The ANSR report points out that in order to boost retention and loyalty around 71 per cent of GCCs are now offering Long-Term Incentives like Employee Stock Options (ESOPs), Restricted Stock Units (RSUs), and Stock Appreciation Rights (SARs), emphasising long-term wealth creation for their employees.

 

Interestingly, the report says that the GCCs are now evolving their incentive strategies and are moving beyond traditional merit-based hikes, introducing special salary adjustments for in-demand skills, market alignment, and equity improvements. Besides this compensation models from GCCs are also undergoing transformation to offer more personalised rewards, that combine competitive pay with flexible benefits, career growth opportunities, and employee wellness programs.

 

Besides this, the GCCs are increasingly leveraging AI and analytics to personalise rewards, conduct real-time pay equity audits, optimise benefits, and build agile, future-ready talent strategies. 

 

“As GCCs become core to enterprise strategy, the way they think about talent is continuously evolving as they are adapting to new business needs, technologies, and expectations. In a world shaped by AI, shifting expectations, and rapid change, the GCCs that succeed will be the ones that treat talent as a true strategic advantage and combine agility, purpose, and a focus on future-ready leadership,” remarked Vikram Ahuja, Co-Founder ANSR and CEO 1Wrk.

 

On the other hand, unlike the growing GCC segment, the IT services sector will be dealing with uncertainty in the business environment that will lead to decision delays. At the same time, there could be greater scrutiny of discretionary IT spending. While there was an expectation of discretionary spending coming back after two years of relative lull, this is unlikely to happen across most industries. 

 

Product-oriented industries (manufacturing, retail, CPG, etc.) bearing the direct brunt of tariffs are going to hit harder. It means IT service providers exposed to these industries will be impacted more. All these factors will lead to added pressure on the Indian IT services companies. TCS, the IT services giant, had deferred its salary hikes. However, it does not bode well for the Indian IT services segment as it will affect the consumption of its employees and would be discouraging for them.

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