What a GCC Actually Costs in Year 1 vs Year 3.
Most GCC business cases are built on a Year 1 number. That's the mistake.
Year 1 is front-loaded and misleading in both directions. You're absorbing entity incorporation, legal and tax advisory, office fit-out or managed workspace deposits, IT infrastructure, and recruiter fees on a base of 20–40 hires. Per-head cost looks inflated because fixed setup is spread across a thin headcount. Meanwhile, salary spend is low — you've only hired for part of the year, and attrition hasn't started yet. Leadership sees a manageable total and signs off.
Year 3 is where the real economics show up. Headcount has typically tripled. Annual increments in India's tech and shared-services market have run 8–11%, compounding across the base. Attrition of 15–20% means constant backfill hiring, notice-period overlaps, and replacement costs at higher salary bands than the original hire. Add senior leadership you didn't need in Year 1 a country head, HR business partner, finance controller plus expanded real estate, statutory audit, transfer pricing documentation, and compliance obligations under the Labour Codes.
The result: total cost climbs sharply, but cost per FTE usually falls 20–30% as fixed overhead spreads. That crossover point not the Year 1 outlay is what determines whether the GCC delivers.
Model both curves before you commit. If you're building the case now, TMS covers the staffing, compliance, and scale-up mechanics in detail here: Global Capability Centre (GCC) services
