Why Global Teams are the Answer to the Tech Talent Shortage

As supply chain disruptions, the rise of e-commerce, and climate change continue to dominate headlines, companies have been embracing digitalization to stay agile, relevant, and operate sustainably. That approach is expected to be at the core of current business models, with analysts predicting that direct investments in digital transformation initiatives will continue to see strong growth and form 55% of all investments in information and communications technology by the end of 2024.

Unsurprisingly, although the business focus across industries differs, the tech skill sets they require to fulfil their business goals are generally similar across the board. These include product engineering, mobile engineering, artificial intelligence (AI) and machine learning – skills that are largely in demand because they touch upon different aspects of building a successful business in the digital era.

With companies across most industries fast-tracking and enhancing their digital transformation plans, demand for cutting-edge digital skills is growing, putting more pressure on the tight tech talent market. In the U.S. alone, the talent shortage has reached new highs – 69% of 2,000 U.S. employers surveyed say they are facing hiring challenges and tech skills are now the second most difficult to find. A Gartner report indicates that a lack of tech talent is the main barrier to companies’ digital transformation initiatives, highlighting the urgent need to fill this gap.

For companies to address their talent crunch, a mindset shift is required – from deciding office locations based primarily on financial factors to taking a talent-first approach, which offers several competitive advantages, and integrating and retaining globally distributed teams wherever talent is available.

Finding the Talent

However, a talent-first approach to building a new entity in an unfamiliar geography is not without its challenges. Setting up a branch office or subsidiary is often complex, time-consuming and requires an in-depth understanding of the local talent market and labor laws.

Today, there are several avenues for companies to quickly hire and onboard global talent – outsourcing, appointing an employer of record (EOR), or setting up a global capability center (GCC). All of these allow companies to leverage the disproportionate distribution of skilled tech workforces to support business models built upon digitalization, innovation and agility.

Often, these skill sets are concentrated in parts of the world where many companies don’t have a presence, namely the current and emerging talent markets in India and countries in central and eastern Europe, South America, and Central Asia.

To develop successful globally distributed teams for the long-term, however, it is necessary for companies to discover, access, attract and retain the right talent in a sustainable manner. While the traditional outsourcing approach and EOR option allow global teams to get up and running quickly, companies often take a hands-off approach in these models resulting in limited employer-employee engagement. GCCs, on the other hand, function as an extension of the parent company, sharing the same business goals, policies, processes and values, which enables employees based in a GCC to be fully integrated into the hiring corporation’s global workforce.

When hiring and retaining enterprise talent, GCCs are frequently the preferred employer of choice compared with the EOR alternative for several reasons:

• GCCs offer a superior work environment defined by a great culture, strong diversity and inclusion policies, and opportunities for innovation, learning and development
• GCC workplaces are experiential, immersive, branded and offer world-class amenities and infrastructure
• Employees enjoy good career growth, with access to cross-functional as well as global opportunities
• Employees receive a higher compensation and better benefits
• Work accomplished at GCCs is impactful and of higher quality

In essence, the Global Talent Hub and GCC employees enjoy the same career opportunities and company culture as their colleagues based in the head office and these are some of the most attractive features top talent look for, according to tech industry leaders. A recent survey by NASSCOM and ANSR suggests the same, with company culture and employer value proposition being the top two factors that influence GCCs’ success in recruiting and retaining tech talent.

Target is an example of a culture-led organization that offers the same company culture and experience regardless of location or administrative setup. Target in India, a GCC, is a high-performing

ecosystem that mirrors its U.S. headquarters. Its over 3,000 employees support Target’s digital transformation across multiple functions including marketing, product, and technology. Target employees in India work closely with their colleagues in Minneapolis and have complete visibility and transparency into how the entire organization operates, which makes everyone feel they’re part of something meaningful. Such an approach to managing global teams allows companies to successfully retain the talent pool they have built and nurtured.

As intelligent technologies such as AI, AR/VR, RPA and IoT get more deeply ingrained in every aspect of business, new job functions are expected to emerge across global corporations and their GCCs, from finance, human resources, to customer service and product development. What is more, the ability to retain top talent in AI and other developing fields like data science and DevOps will prove to be a distinct competitive advantage for any organization.

To ease the hiring pressure, hire globally, not locally.

What Makes a GCC Successful?

For companies that decide to take the GCC approach, it is then critical to first have a defined vision for their GCC and once that is established, commit to making long-term investments in the people they hire.

To achieve this ROI, companies need to set up policies and practices to integrate global teams into the company’s culture and processes, ensuring regular employee communication, and providing ample opportunities for interaction between team members around the world. Studies have shown that best-in-class GCCs offer a good employee experience, which is positively correlated with productivity.

A well-run GCC and Global Talent Hub also provides several advantages over a traditional outsourcing model:

• Enables 15%-20% additional savings
• Delivers 20%-25% additional productivity improvements
• Hires and develops the best talent for the global enterprise
• Develops enterprise capabilities in areas such as mobile, RPA, AI/cognitive and analytics
• Builds capacity – global team, capabilities, scale – to support strategic enterprise priorities
• Leverages the GCC ecosystem and best practices for open innovation

With remote work becoming mainstream, whether companies set up teams in Bangalore, Warsaw, or San Francisco is not as important as before. Rather, workforce capabilities now take center stage. Companies that want to stay ahead of the competition need to globalize their talent strategy and focus on building long-term, integrated teams wherever there is an abundance of the right talent.