Why India's hiring is shifting to tier 2, 3 cities
What's the story
India's hiring landscape is witnessing a major shift, with small cities emerging as key talent hubs. A recent report by workforce staffing and HR solutions firm Genius HRTech Limited has revealed that 69% of organizations have ramped up their hiring from Tier II and III cities by over 30% in the last two years. The trend spans across sectors like finance, FMCG, engineering, IT, telecom, and retail/e-commerce.
Future outlook
Shift toward smaller cities
The report, based on a survey of 1,729 employers in August, predicts an even stronger shift toward smaller cities.
A majority (55%) of respondents expect their organizations' hiring will mostly move to Tier II and III cities in the next three years.
This shows that companies are looking beyond traditional metropolitan centers for talent acquisition.
Hiring hurdles
Challenges in hiring expansion
Despite the growing trend, infrastructure and connectivity remain major challenges for companies looking to hire from smaller cities.
The report found that 60% of respondents see these factors as the biggest hurdle in expanding their hiring beyond metro cities.
This highlights a need for improved facilities and services in Tier II and III locations to support this new hiring trend.
Hiring benefits
Cost efficiency and employee loyalty
The report also highlights that cost efficiency is a major advantage of hiring from Tier II and III cities, with 39% of respondents citing it as the main benefit.
This is followed by stronger employee loyalty (26%) and lower attrition rates (22%).
A majority (64%) of respondents believe these smaller cities already have an industry-ready talent pool across most functions.
Sectoral shift
Manufacturing and engineering sectors to drive demand
The report also highlights that the manufacturing and engineering sectors are likely to drive the highest hiring demand in Tier II and III cities over the next two to three years.
This shows a growing acceptance of smaller cities as viable locations for industrial growth and job creation.
Genius HRTech Chairman R P Yadav emphasized this shift, saying these cities are becoming strategic talent markets rather than just alternatives to metros.