Thanks to Reuters we’ve got some solid intel on accounting firms’ increasing their presence — and therefore headcounts — in India, expanding out from city centers and into smaller cities and towns. We’ve known for some time that offshoring has exploded in recent years, now we know there’s much more room to grow. 1,269,219 square miles to be exact.
The world’s major accounting firms are stepping up investments in new Indian facilities away from bigger cities as global demand for cheaper back office operations grows and smaller towns move up the economic value chain.
For decades, large multinational corporations have rushed to India’s biggest metropolises, chiefly Mumbai, Delhi and Bengaluru, to set up massive operational centres that employ millions, lured by vast, low-cost talent pools, particularly in IT.
Business service exports have become a critical part of India’s economy but the sector has been hit by a slowdown in global demand for software and challenges in big urban centres such as rising costs, high attrition and slow progress in getting workers to return to the office after the pandemic.
Another Reuters piece explains the IT slowdown in detail. Said the CEO of IT behemoth Infosys in April: “We have a lot of bench with us. They are ready to move into production projects.” Isn’t that the same thing that’s happening at many Big 4 firms across the globe?
Now for some numbers.
“Global giants are finding it easier and more competitive to shift work to small locations in India,” said Debasish Mishra, chief growth officer, Deloitte South Asia, noting the vast pool of English-speaking accounting, engineering and science graduates.
Deloitte, with a workforce of over 100,000 in India, says it will hire 50,000 more staff over three years, and expand its footprint in new towns while KPMG plans to hire over 20,000 over the next three years.
PwC hired close to 12,500 in the fiscal year ended March and expects to hire the same number this year, said Padmaja Alaganandan, the firm’s India chief people officer.
Deloitte South Asia CEO Romal Shetty said a few weeks back that Deloitte plans to have 30% of its workforce operating from India within the next four years, an estimated total employee count ranging from 150,000 to 160,000. The most recent Deloitte Global headcount is 415,000, a third of which is about 138,000.
Reuters references a forward-looking EY report released in June that says multinationals are to going set up quite a few new “Global Capability Centres (GCCs)” for varied industries in so-called tier-two cities like Jaipur (pop. 3.1 mil), Vadodara (2.175 mil), Kochi (2.1 mil), and Chandigarh (population 1.6 mil for the Chandigarh, Mohali and Panchkula metropolitan area). Currently multinationals are setting up about 70 such centers a year, the EY report suggests that by 2030, the overall number of new GCC establishments per year could reach 115. Bengaluru, Hyderabad, Chennai, Mumbai, Pune, and Delhi remain popular sites for GCC squatting in India but the tier-two cities “are becoming popular for new set-ups owing to its improving infrastructure, favorable state policies, and lower real estate and talent costs. Coimbatore in particular is emerging as the next big GCC hub post Chennai in Tamil Nadu.”
Said Reuters, without a hint of irony, that means more professional opportunities and potentially higher salaries in areas away from more globally connected business centres.
Global accounting firms set up shop in India’s smaller cities [Reuters]