Why India’s GCCs are hiring fewer full-timers and more AI contractors

India's global capability centers (GCCs) are increasingly leaning towards flexible employment models as the need for specialized skills in AI, data, and cloud technologies continues to grow. According to Quess Corp’s GCC Talent Trend Report, the proportion of flexible staffing within these centers rose to 25% in the final quarter of 2026, up from 22% in 2025. This trend highlights a notable shift towards subcontracting and short-term engagements. The rapid adoption of emerging technologies is driving this transformation. Projects related to AI, data, and machine learning have surged, doubling from 30% to 60% within GCCs. Kapil Joshi, CEO of IT Staffing at Quess Corp, noted, "Previously, most demand for contract workers was for entry-level positions; now, it has shifted towards mid-level professionals with 4-10 years of experience." This demand spans various sectors beyond just banking, finance, insurance, healthcare, and retail, suggesting a sustainable trend. Contract roles are evolving beyond mere execution tasks; they now encompass delivery responsibilities, particularly in AI-driven transformation initiatives. Hani Mukhey, Senior Director at Zinnov, explained that while AI hiring is experiencing a year-on-year growth rate of approximately 60%, it is often tied to specific project phases rather than permanent positions, which cannot adapt to such rapid fluctuations. Typically, companies are now engaging mid- to senior-level specialists on contracts lasting from nine to 18 months to fulfill targeted objectives. This shift reflects a broader change in the operational models of GCCs, which were historically established for cost savings but are now expected to undertake high-value projects in AI transformation, cloud modernization, and product innovation. In addition, the current economic climate has led many organizations to adopt caution regarding fixed costs, opting instead for on-demand capabilities. This approach allows them to hire specialized professionals in areas like AI, data, cybersecurity, and product transformation only when necessary. There is also a growing awareness that skills acquired today may become outdated within 18-24 months, making long-term recruitment riskier. Industry experts argue that this trend signifies a more profound evolution in workforce strategy rather than a mere temporary adjustment. Arindam Sen, Partner at EY India, pointed out that contract hiring, which has gradually increased over the years, is likely to persist as organizations continue to pursue ongoing transformation efforts. This could lead to a dual-layer workforce model, balancing a stable core team with flexible talent to address fluctuating demands. Changing workforce dynamics are also influencing this trend, with nearly 40% of GCC hiring driven by backfilling roles amidst market churn. Shorter job tenures, especially among Gen Z employees, complicate long-term workforce planning, as noted by Joshi. While the rise of flexible hiring is evident, it is unlikely to fully replace the necessity of developing internal capabilities. Projections indicate that contract hiring may increase to 30-40% in the coming years, yet companies are also investing in reskilling initiatives to cultivate their internal talent pool, particularly for AI and data-related skills.