Tier 2 and Tier 3 cities are Sparking India’s technological renaissance

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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Tier 2 and Tier 3 cities are Sparking India’s technological renaissance

India is on the verge of a drastic transformation, especially with regard to manufacturing. The confluence of recent geopolitical events means that the stakes couldn’t be any higher. To understand India’s technological talent prowess, we just have to look at  some major technology companies such as Microsoft, Google, Twitter, and IMB and what they have in common?

Indeed! They all have a CEO of Indian origin at the helm. This hardly surprising as India is known for its rich reservoir of tech talent. Owing to its technical talent, the country has an established presence in outsourcing, enterprise software (of all sizes), and some very innovative technology startups. The value of India’s technology talent is also seen in the industrial renaissance via the 4th and 5th industrial revolution. In a tech driven world, it comes as no surprise that the demand for quality tech talent from India has been skyrocketing.

India has become a de facto hub for GCCs and multinational companies to open their R&D centers as well as GCCs. Many MNCs are now in the process of further ramping up their teams in the country: News reports state that by the conclusion of this fiscal year, existing and new global capability centres (GCCs) in India expect to hire between 180,000 and 200,000 people. The hiring numbers are significantly higher when it comes to the technology spectrum in India. So, what makes tier 2 cities so important and why are they becoming global technology hubs?

Image source: Zinnov

Pan-India presence

According to the Randstad Insights Talent Trends Report, Chandigarh, Vadodara, Indore, Coimbatore, Kochi, and Trivandrum are growing in importance as IT employment hubs. The report is based on the staffing firm’s internal jobs data, which analysed over 1 lakh jobs and client requirements spread across eight tier 1 cities and 15 tier 2 cities.

The reason for a shift to tier 2 cities becoming talent hubs is due to various firms are eyeing a robust pan India presence and are keen on expanding their footprints in tier 2 and 3 cities including Jaipur, Hyderabad, Coimbatore, Indore, Kochi, etc. just to name a few.

Some of the corporations on top of the hiring game include Amex, Bank of America, Wells Fargo, Citi, Barclays, Morgan Stanley, HSBC, Standard Chartered, Goldman Sachs, Amazon, Target, Walmart, Shell, GSK, Abbott, Pfizer, J&J, Novartis, and AstraZeneca, as per  Xpheno, a specialty recruiting service.

While Tier 2 cities have excellent infrastructure but they struggle to retain young talent due to a lack of job possibilities. As tech focussed companies scale and expand their footprint across these ambitious and future locations, not only will it help increase the regional diversity, but also to offer a diverse range of career possibilities to the many bright young talents that are based there.

Change in work culture

While work from office has resumed in many places, IT firms have largely espoused a hybrid working culture.  Work-from-home, half-time work, and remote work are examples of hybrid working styles that have enhanced productivity while allowing skilled employees to work in the office. Since many promising technology aspirants have their families in tier 2 cities, the option to work remotely allows them to stay closer to their families. Talent can thus return to tier 3 or tier 2 cities and work from the confines of their own abodes.

Another facet that is in favour of tier 2 and 3 cities is the cost of living: Everything from food, rent, and transportation can be cheaper than tier 1 cities leading to enormous cost savings for employees and organizations alike. Most importantly, housing in these cities is affordable. Finally, the competition is less and it is far easier for organizations to establish a brand presence for the future.

Finally, organizations pay significant costs in order to attract, retain, and engage their personnel. Firms are resorting to tier 2 and 3 cities to onboard people to meet the workforce requirements for remote tasks in such a scenario. Companies can access a large talent pool by tapping into these cities.

These areas offer a lot of entry-level talent who are eager to learn and put their best foot forward. As reverse migration and hybrid working are prevalent trends, it is fair to say that tier 2 and 3 cities are progressively becoming employment centres. According to the Randstad Insights Talent Trends Report, Chandigarh, Vadodara, Indore, Coimbatore, Kochi, and Trivandrum are growing in importance as IT employment hubs. The report is based on the staffing firm’s internal jobs data, which analysed over 1 lakh jobs and client requirements spread across eight tier 1 cities and 15 tier 2 cities.

Vadodara had 14 percent of junior IT employment, followed by Chandigarh with 13 percent (12 percent ). He has 20 percent in Chandigarh, 14 percent in Indore, and 14 percent in Coimbatore at the mid-level.

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

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