By Deborah Kops
Acronyms Have a Way of Sneaking Up on You
You probably don’t remember FATCA? The Foreign Account Tax Compliance Act, a little sleeper provision buried in a 2010 jobs bill? At first, nobody paid it much attention. Banks shrugged. CFOs waved it off. Compliance teams muttered, “We’ll figure it out later.”
And then—bam. FATCA became the bane of global finance, changing how money moved, how accounts were reported, how compliance costs mushroomed, impacting the back and middle offices.
Fast forward to 2025, and déjà vu is knocking on GBS’s glass door. Another acronym is about to crash the party: HIRE. Not the old 2010 stimulus version, but the shiny new Halting International Relocation of Employment Act, introduced by Senator Bernie Moreno.
On the surface, it’s political catnip: punish companies for offshoring American jobs by slapping a 25% excise tax on payments to foreign workers and disallowing the usual tax deductions. The cash raised would feed a Domestic Workforce Fund—think apprenticeships, reskilling, hometown job fairs with ribbon-cutting photo ops.
But if you’re running a GBS model that depends on global labor arbitrage, or if you’re a BPO with delivery centers in Pune, Kraków, or Manila, the HIRE Act is not a nothingburger. It’s potentially a meteor aimed squarely at the model.
What Could Happen: Scenarios for GBS
This is not about what is. It’s about what could be. Legislators love soundbites. And acronyms. And angry voters. Whether or not the HIRE Act passes in its current form, the mere fact it’s being floated tells you which way the political wind is blowing.
Let’s sketch out some possible futures:
Scenario 1: The Taxman Cometh
Picture this: your North America finance tower runs 70% of its reconciliations and reporting out of Hyderabad. Under HIRE, every payment your company makes to a foreign entity for labor services—whether it’s to your own captive center in India via intercompany transfer or to a third-party BPO—could be hit with a 25% tax surcharge.
Suddenly, the math that justified offshoring goes sideways. That $40,000 analyst in Bengaluru is effectively costing you $50,000+. Layer on other disallowed tax deductions, and CFOs start sharpening their pencils.
Impact: GBS leaders are told to “reshore” chunks of scope—not because of quality, but because the tax man makes arbitrage uneconomic.
Scenario 2: The Nearshore Shuffle
Canny GBS leaders try to game the system. “Okay, if offshore is radioactive, what about nearshore?” Cue a boom in Monterrey, Guadalajara, San José, and even U.S. border towns suddenly being marketed as delivery hubs.
But here’s the rub: The Act isn’t about “offshore vs onshore.” It’s “foreign vs domestic.” Even nearshore in Mexico is still foreign. The excise tax bites.
Impact: The only truly “safe” option is building back in the U.S.—where wage inflation, real estate, and talent scarcity make CFOs cry into their spreadsheets.
Scenario 3: The Provider Panic
Think BPO giants—Infosys, TCS, Cognizant, Accenture. Their share prices already flutter when D.C. sneezes. A serious HIRE push triggers investor jitters. Customers hedge, contracts stall, and providers scramble to dust off their “Made in America” delivery center brochures.
Impact: A wave of token U.S. investments—a 200-seat hub in Des Moines here, a repurposed warehouse in Dayton there—trotted out to show compliance and patriotism. But those hubs can’t absorb the millions of jobs sitting in Asia.
Scenario 4: The Workarounds
Remember how banks initially tried to sidestep FATCA? Expect similar GBS contortions. Complex contracting models. Shuffling invoices through subsidiaries. Rebranding foreign employees as “consultants.” Shadow employment structures.
Impact: Compliance becomes a nightmare. Legal fees skyrocket. GBS leaders spend more time with tax attorneys than with process owners.
Scenario 5: The Boomerang
Irony alert: Just as GBS organizations finally mature into global operators, the Act forces them to retrench. Finance talent in Tulsa suddenly finds itself in demand again. But the talent pool has atrophied. Young grads don’t want to do journal entries. They want to do AI and product management. And AI for GBS just isn’t there…yet.
Impact: Companies pay top dollar for reluctant domestic hires, while their global centers rot under tax pressure.
Déjà Vu: FATCA All Over Again
The real kicker? Just like FATCA, which was originally a little clause in a jobs bill, the HIRE Act could slide into law quietly, tucked into a broader package Congress may be desperate to pass in light of a softening labor market.
Banks didn’t believe FATCA would stick. Then they spent billions retrofitting systems, reporting accounts, and apologizing to angry customers.
GBS is now in the same boat. Leaders can scoff “This will never pass!” but if it does, the compliance, cost, and complexity fallout will be monumental.
Why GBS Needs to Pay Attention
Let’s be blunt. GBS has always relied on cheap labor plus a little process standardization as its magic sauce. “Talent arbitrage” is the polite term. The HIRE Act is a direct shot at that foundation.
If you’re a GBS leader, you can’t sit this one out. You need to scenario-plan, lobby, and prepare. Pretending this is someone else’s problem—tax, policy, government affairs—is naïve.
The GBS Blind Spots (and Why They’ll Hurt More Now)
- Overdependence on offshore labor pools. We brag about “global talent models” but let’s be honest: we chased low cost. That has also had the effect of building up talent pools that the US can’t emulate. That strategy now has a bullseye painted on it.
- Weak domestic workforce strategies. How many GBS leaders can honestly say they’ve invested in U.S. hubs, apprenticeships, or local pipelines? A handful, maybe. I can’t think of any.
- No muscle in policy. The lobbyists for the banks fought FATCA tooth and nail and still lost. GBS doesn’t even have lobbyists. Who in Washington even knows what “GBS” means?
- Provider dependency. If you’re heavily reliant on BPO partners, you inherit their risk exposure. They’ll pass the pain straight back to you.
Could This Be… an Opportunity?
Here’s where I’ll twist the knife. GBS has spent decades whining it doesn’t get credit for being “strategic.” Welcome to strategic relevance.
If the HIRE Act becomes real, suddenly GBS is front-page material:
- Where are our jobs?
- Why are they in Manila instead of Milwaukee?
- Who made those decisions?
Your board will ask. Your CEO will be on CNBC defending it. And you, dear GBS leader, will be in the hot seat.
This is your moment to prove you’re not just a transaction jockey but a business strategist. To say, “We saw this coming. We have options. We’re prepared.”
What To Do Now
- Model the scenarios. Run the numbers on what a 25% excise tax would do to your cost base. Not in theory. Now.
- Map your exposure. Which towers, which processes, which contracts? Be precise.
- Build a domestic workforce story. Even if you can’t move everything back, start piloting. Show the optics. Show the commitment.
- Engage policy teams. Don’t assume your government affairs team knows how exposed you are. Educate them.
- Communicate up. Your CEO should not be blindsided on Bloomberg when the reporter asks, “How will the HIRE Act affect your operations?”
Final Word
The 2025 HIRE Act may never pass. Or it may morph into something watered down. Or it may become law exactly as written. That’s politics.
But here’s the lesson from FATCA: dismissing acronyms is dangerous. They sneak up on you, they morph into monsters, and they redefine entire industries.
For GBS, the HIRE Act is a shot across the bow. Ignore it at your peril. Treat it like another sleepy Washington acronym, and you could find your “green dashboard” suddenly soaked in red ink.