A threshold has been crossed in GBS location strategy, and most organisations have not fully registered its implications. For the first time in the thirty-year history of the shared services model, talent access has overtaken cost as the primary driver of location decisions. The playbook that built the first generation of offshore delivery centres — find the lowest-cost labour pool, build the centre, extract the arbitrage — is being retired. What replaces it is considerably more complex.
The data behind the shift
Tholons' 2025 Top 10 GCC/GBS Trends Report predicts 50 percent of companies will have adopted a hybrid sourcing model by 2026 that includes nearshoring, driven by the need for greater agility and resilience. While traditional Asia-based locations remain a leading destination for low-value transactional work, interest in nearshoring has accelerated sharply as organisations look to mitigate risk by diversifying locations and leverage regional advantages such as time zone and cultural alignment. McKinsey & Company
Hybrid, multi-location operating models have become the standard, blending captives, outsourcing, nearshore and offshore delivery to improve resilience and access scarce talent. Talent constraints — not cost — are now driving strategic decisions, influencing workforce models, location strategies, and outsourcing adoption across the shared services market. Fobpossgbs
The magnitude of this shift should not be understated. Cost optimisation is not disappearing from the GBS agenda — it remains the stated top objective of roughly 90 percent of shared services organisations. What has changed is that it can no longer be achieved by location arbitrage alone. The talent required to run a modern GBS organisation — one capable of deploying AI, managing complex cross-functional processes, and acting as a strategic business partner — does not exist in sufficient density in any single low-cost location.
Why nearshoring is accelerating
The nearshoring trend is most pronounced in the North American market — Latin America is emerging as the preferred delivery zone for US-headquartered GBS operations — but the underlying logic applies globally. European organisations are increasingly looking at Poland, Portugal, Romania, and the Western Balkans. While salaries in Latin America are generally positioned between Asia and Europe, cost savings are still substantial, averaging 30 to 50 percent, combined with the ability to offer highly skilled talent and time zone alignment. McKinsey & Company
For European-headquartered GBS organisations, the Polish market deserves particular attention. Warsaw and Kraków have developed genuine depth in finance, technology, and multilingual professional services. The talent pool is educated, mobile within the EU, and in increasing demand — which means the organisations that build there now, with proper investment in the employee value proposition, are creating genuine competitive advantage. The organisations that attempt to underpay and under-invest in Polish locations because "it's still cheaper than Germany" are already losing talent to competitors who understand the market differently.
The skills reorientation
Location strategy and talent strategy are inseparable in the current environment because the nature of the skills required is changing simultaneously. Traditional headcount-based models are giving way to skills-driven hiring, prioritising domain expertise and digital fluency. As routine operational work declines, demand is rising for polymath talent — professionals who understand both business processes and the technological levers, such as AI and data science, that optimise them. McKinsey & Company
This creates a genuine design challenge. The role architecture of most GBS organisations was built for process execution at scale — hiring large numbers of people to perform defined, repeatable tasks efficiently. That architecture produces exactly the wrong profile for an AI-enabled GBS that needs judgment, contextual reasoning, and the ability to manage human-agent hybrid workflows. Teaching people how to use agentic AI effectively and inspiring them to embrace it in their daily workflows is harder than layering it into the tech stack. Change management is cited as a core challenge to scaling agentic AI by nearly a quarter of top performers. Bain & Company
The employee value proposition question
The organisations navigating this best are not treating it purely as a talent acquisition problem. They are treating it as an employee value proposition problem — asking what makes a GBS role genuinely attractive to the kind of person they now need to hire.
Leading GBS centres are increasingly positioned as global leadership pipelines rather than offshore delivery arms. By offering clear pathways into core business functions and fostering a culture of continuous learning, these centres are attracting talent eager to drive enterprise-wide transformation rather than simply maintain operations. McKinsey & Company
This is a fundamental repositioning. It requires investment in learning and development infrastructure, in career architecture that connects GBS roles to senior positions in core business functions, and in the physical and cultural environment of the delivery centre itself. It is also, notably, a much harder thing to copy than a cost arbitrage model. Location can be replicated. Culture, career architecture, and genuine mobility cannot be replicated quickly.
The strategic implication for GBS design
For organisations designing or redesigning their GBS operating model in 2026, the sequence matters. Location selection and workforce planning need to happen simultaneously with AI deployment strategy — not separately. The right question is not "where is labour cheapest?" or "which AI tools should we deploy?" in isolation. It is: "What combination of human capability and AI capability, in what locations, produces the outcomes our business needs at the cost and quality level the business case requires?"
That is a more complex optimisation problem. It requires more integrated thinking across real estate, technology, finance, and HR than most GBS design processes currently achieve. But it is the right question — and the organisations asking it are building GBS models that will still be competitive in 2030, not ones that will require another expensive redesign in three years.
