By Amy Schabacker Dufrane
For multinational companies, business fundamentals remain the same, no matter the times. Being able to access global talent pools, drive innovation and operational efficiencies, and streamline functions such as HR, finance, and IT services represent an ongoing quest that can deliver better business outcomes. The ability to leverage and scale offshore support services is critical to these outcomes.
Usually, at the core of the offshoring model is the Global Capability Center, also known as a GCC. To draw further distinction, the GCC is actually a division of the organization rather than a compilation of specific business tasks outsourced to a third-party vendor. In many cases, there are unique advantages in having a strategically positioned GCC that enables the business to “follow the sun” by providing 24/7 support for customers and employees. A GCC might be established to aggregate the multinational’s IT services in a region known for exceptional tech talent. There are obvious savings recognized by setting up in a region with lower labor costs; however, HR needs to remain focused on the GCC as an integral part of the multinational that aligns with its culture and values.
This hot topic was top-of-mind at the recent Transform 2025 conference, where I moderated a panel of offshoring experts. Among the points discussed was spirited conversation about the confusion between offshoring and outsourcing and what this means to multinational organizations. The panel agreed that there are a number of moving parts in a successful offshoring operation. Here are a few of their perspectives that will help you advance your company’s HR team’s support for offshore operations:
Centralized or Decentralized: Leadership’s commitment to and visibility in an offshoring operation can make or break its effectiveness. If your leadership team is in the U.S. and you have team members in India who are forced to get up in the middle of their night to attend meetings, it creates a cultural divide. Consider your reporting structure when setting up the GCC. Is leadership willing to be available around the clock? Will they travel to the GCC on a regular basis and include those employees in town hall meetings? Are local managers empowered to oversee employee concerns? Should HR be the focal point, and, if so, does HR have access to what’s needed to address cultural nuances and support requirements?
Legislative Oversight: HR is already keenly aware of the U.S. Patriot Act and its impact on data retention policies, background screening, and training programs. While the Patriot Act doesn’t directly govern employees outside of the U.S., the GCC’s employee data, systems, and operations might come under scrutiny. Added to this oversight is the CLOUD Act, passed in 2018, which compels U.S. companies to enable law enforcement’s unobstructed access to data, even if it is stored overseas. Balancing U.S. laws with local data protection laws require reliance on your corporate legal counsel so that you can clearly explain what this means to your GCC workers.
Recruiting Essentials: GCC are often located in regions where there’s ready access to talent, both from a cost-saving standpoint as well as qualifications. High volume hiring in these regions requires a well-defined talent acquisition process that leans into the same best practices – such as pre-hire assessments and structured interviews – that you deploy in the U.S. Continually sourcing and recruiting talent and familiarizing yourself on what constitutes an attractive compensation package in the GCC’s region will ensure a strong employment brand that engages and retains the best-fit workers.
In some cases, you might choose to walk before you run by contracting an Employer of Record (EOR) in select regions. As a third party that can legally employ workers on behalf of an organization, the EOR manages payroll, benefits, and compliance requirements specific to local labor laws. Managing the day-to-day activities of those employees remains with the originating organization while enabling it to expand globally, quickly. The EOR model can be a short-term or long-term solution and is especially cost-effective for smaller groups of workers who might be assigned to specialized functions or projects. It’s a viable alternative to setting up an entity directly and also provides the foundation for expansion, such as by adding representation in new countries.
I want to tell you that HR’s job has become less complex in the offshoring model. That’s not the case. Offshoring represents significant growth opportunities for organizations as they are able to tap new talent pools, increase capabilities, and enrich customer satisfaction through “always-on” support. Whether a blended approach of core GCC in India and an EOR in Nigeria, one thing is certain: HR remains at the helm of the people management journey and needs to be not just in lockstep with what offshoring can deliver but also looking ahead to what could be next. The best way to prepare for the future is through learning and career development accessible through HRCI. Learn more about our certification programs at www.hrci.org.
