The GCC Runbook: What Most Leaders Do Not Plan For

In Article 2 we worked through location selection — the strategic question of where to put your GCC(s). Now we get into the execution plan. This is the part that makes most leaders nervous and causes them to spend lots of money on tools and/or partners. My view, based on creating or significantly growing seven GCCs across three organizations, is that the execution is far more manageable than it appears from the outside. You do not need a BOT vendor, an army of consultants, or years of runway. What you need is a clear runbook and a small group of people who have done it before. This article covers the complete operational journey — from legal entity creation through talent sourcing, knowledge transfer, and change management. It is the longest article in this series because the execution phase is where GCC programs succeed or fail. Read it carefully before you begin.

Legal Entity Creation

The legal entity is the prerequisite to almost everything else. You cannot sign an office lease, open a bank account, or employ local staff without it. In most countries, entity creation takes four to twelve weeks, and that timeline should be running in parallel with your other setup activities — not before them. There are US law firms that specialize in offshore entity creation, and they will be happy to take your engagement. What most of them will not tell you upfront is that they typically subcontract the actual local legal work to a domestic firm in your target country, marking up the rates significantly in the process. For a decision of this consequence, I recommend hiring a reputable local law firm directly. The cost is lower and the expertise is often deeper. If your organization’s risk tolerance requires a US firm to oversee the process, that is a reasonable choice — just go in with eyes open about what you are paying for. There are meaningful tax implications to entity structure, and getting this right from the start is important. Do not cut corners here. The legal and compliance overhead of fixing a poorly structured entity years later far exceeds the cost of doing it right at the outset.

Real Estate

Your real estate decision is driven primarily by the size of your planned center. The threshold I use is 150 FTEs. Above that, the value play is to negotiate a direct lease and build out your own office. Below that, the landlording model — paying a local company a per-seat fee for finished space, sometimes including the legal entity and compliance infrastructure — is usually more practical. You pay a 20 to 50 percent premium per seat compared to a direct lease, but you eliminate the complexity of a construction project and a long-term lease commitment. For direct leases, most agreements run five years, and you should negotiate at least one (and preferably two) five-year renewal option. Two provisions that your organization should not overlook: price protection on renewal, and — given the possible impact of AI on headcount over the next several years — the right to reduce your office footprint on renewal or even mid-lease. Space in India runs approximately $12 to $16 per square foot per year; Romania is roughly double that at $20 to $30. These are modest costs relative to your labor savings, so I strongly recommend against densifying your office to cut the real estate bill. I use 120 square feet per FTE as a comfortable planning number. Dropping below 80 square feet damages morale, which drives attrition, which costs you far more than you saved on rent.

Office Buildout

The buildout experience differs significantly by region, and the difference matters to your timeline. In India, you will typically receive a “cold shell” — a cement box with nothing inside. Plumbing, electrical, fire suppression, HVAC, and all internal systems are the lessee’s responsibility. Budget at least $45 per square foot for the buildout including furniture (furniture in India is inexpensive compared to the US), and plan for five to nine months of construction time. In Eastern Europe, space is generally offered as a “warm shell,” with the core systems already in place. You are responsible for flooring, ceiling, internal partitions, lighting, and paint. The same $45 per square foot budget applies, but the project is substantially simpler and typically completes in one to three months. A common concern is that office construction will delay the GCC launch. It does not have to. Begin your talent acquisition process as soon as the legal entity is established — do not wait for the office to be ready. In India, it takes three to four months to source and hire candidates due to the mandatory 60-day notice period to their current employer. In Eastern Europe, the typical timeline is two months. By the time your first hires have completed their notice periods, your office will likely be ready or close to it. For the gap period, work-from-home is a practical bridge. It carries a productivity cost and makes culture-building harder, but for a few months it is entirely manageable. Some landlords will also carve out temporary space for new tenants in their building while the construction project runs — worth asking for when you sign the lease.

Sourcing Talent

Hiring the right leadership is the single most important decision you will make in the GCC setup phase. The head of the center should have previously managed a GCC and, ideally, in the specific region where you are establishing yours. India in particular has its own regulatory and government relationship dynamics, and a leader who has navigated those before will save you time and money on a recurring basis. This is not a role for someone learning on the job. For a center of any meaningful size, hire a seasoned practitioner. The same principle applies to the executive team. Your CFO should understand local government compliance audits. Your HR leader should know the labor laws and benefits expectations in that market. I hired a CFO for MassMutual India who had previously been a senior auditor at a leading accounting firm in Hyderabad. He knew exactly what the auditors expected and how to ensure we had no findings. We never did. For the broader workforce, I recommend a hybrid recruiting model: a small internal talent acquisition team supplemented by third-party recruiting firms, especially in the early months before your employer brand is established in the local market. As the center grows, the economics of an internal recruiting function improve and the dependency on external firms naturally decreases. On compensation: do not benchmark to the market and pay exactly at the median. Pay 5 to 20 percent above market. Use part of the margin you are capturing from the outsourcer to fund better salaries. You will attract stronger candidates, reduce attrition, and the cost of that premium is a fraction of what you would spend replacing and retraining staff who leave for a slightly better offer across the street. The brand-building budget is highly variable and based on your organization’s reputation in the local market. Global companies with a well known brand will spend little, while new entrants need to budget significantly to build a brand and attract the best talent. The India market is particularly focused on the value of the organization’s brand. For example, while MassMutual is a well-known brand in the US, it was largely unknown in India. We spent $300k our first year in brand building to assist in our recruitment strategy when establishing MassMutual India.

Third-Party Vendors for Non-Core Functions

A GCC requires a range of support functions that are not core to your business and which you may not want to staff with company employees. Physical security, janitorial services, building maintenance, transportation, catering, and fitness center personnel are all candidates for outsourcing to local vendors. Your organization should decide which peripheral functions you would like to outsource, and which you prefer to be staffed by employees of the organization. Transportation deserves special mention in the India context. Unlike the US or Eastern Europe, Indian staff expect some form of transportation to and from the office as a standard benefit of employment. Organizations that do not provide this are at a meaningful competitive disadvantage in the talent market. Factor it into your planning from the start. For sourcing these vendors, I recommend three approaches used in combination: consult industry working groups such as NASSCOM in India; speak with peers who have already established GCCs in your target city (most GCC leaders are willing to share recommendations); and run an RFP process with multiple providers. Always check references with existing clients and write contracts that are straightforward to terminate if the vendor underperforms. You may not get every vendor selection right on the first attempt and will require flexibility.

Knowledge Transfer

Every GCC that is not an exclusive rebadging of existing contractors will require a knowledge transfer plan. This is the structured process of hiring new GCC resources, transitioning the function from the position being eliminated or moved, and ensuring the new hire can perform the role to the required standard before the outgoing person departs. The time required for knowledge transfer varies significantly by role type:

• Business analysts, most IT roles on new or recent projects, QA personnel, BPO staff, and those supporting packaged vendor solutions (SAP, Oracle, Workday, Salesforce): typically two to six weeks.
• IT roles supporting existing, established solutions: two to four months, due to the domain knowledge accumulated over years of supporting a live system. The practical reality is that knowledge transfer is self-pacing. You can only hire new GCC staff at a certain velocity, which naturally spaces out the cohorts being transitioned. Transferring 300 positions typically takes six to nine months end-to-end, including one to four months to source and hire candidates. Transferring 1,000 positions takes proportionally less time per position because hiring velocity increases as the center’s recruiting infrastructure matures. There is a cost to maintaining the outgoing position during the transition period. For positions moving from the US to India, this cost is trivial relative to the annual savings. For offshore contractor-to-GCC staff transitions, the cost is relatively larger but still well within a one-year ROI. Do not let transition cost deter you from the program.

Change Management

Change management is where many GCC programs encounter their most persistent resistance, and where top-down executive support is not optional — it is essential. The same institutional inertia that affects every other efficiency initiative in an organization will appear here, in the form of middle managers who find reasons why their team cannot move offshore, why the knowledge transfer is too risky, why now is not the right time.

The remedy is to set clear offshore targets at the macro level and hold managers accountable for achieving them. Make fulfillment of the GCC program part of the success criteria for each manager's performance evaluation. If you are running a bottom-up budgeting process — and you should be — reduce the budget accordingly along the defined timelines and let managers figure out how to deliver within those constraints.

One important nuance: set targets at the macro level, not at the individual team level. It is mathematically impossible to move 30 percent of eight people. It is entirely feasible to move 30 percent of 800 positions across a portfolio of teams. Let managers identify which specific roles within their teams are most suitable for the GCC and hold them to the aggregate outcome.

For the GCC itself, I recommend a minimum 80 percent staff composition with no more than 20 percent flexible contractor workforce. The cultural and operational advantages of a predominantly staff-based center are significant, and the higher contractor percentage you allow, the more you erode the attrition control that makes company-owned GCCs superior to outsourced arrangements in the first place.

Finally, communicate clearly and early with the onshore teams whose functions will transition. Organizations that handle this well — explaining the rationale, setting honest timelines, and treating departing staff with dignity — preserve morale in the remaining organization. Organizations that handle it poorly create lasting damage to their culture and their ability to attract talent. The transition is hard. The way you manage it defines your organization's character.

In Article 4, the final article in this series, we turn to the challenge that most GCC leaders underestimate until it is too late: culture and attrition. Building the center is the beginning. Keeping it running well is another important facet of the work.