High demand for talent in tier II and III locations in India

Industries are leveraging the potential of small cities to expand business and in turn creating huge employment opportunities 

Ahmedabad, Vadodara and Chandigarh, are the top tier II/III locations, accounting for over 50 per cent of the total demand in small cities, according to the TimesJobs.com data.

Government and industry bodies are taking special initiatives and creating SEZs along with extended tax sops to encourage investments in these regions. All this has played a vital role in promoting these small towns into cities of the future.

What metro lacks, small cities offer

Rising inflation, real estate costs, attrition rates, lack of space in the metros and other big cities are the primary reason for industries to shift to tier II and III cities. “IT and ITeS companies are increasingly setting up operations in tier II and III cities as it equips them to cater in regional languages, especially for domestic clients,” said Sandeep Ladda, India Technology leader, PwC India. He highlighted other factors that are contributing to the rise in demand in small cities:

• Emergence of hub and spoke model – tier I cities as hubs and the tier II, III and IV cities as spokes
• According to NASSCOM, the operational cost savings are estimated to be around 10-20 per cent
• Cost of living in these cities is lower by 10-25 per cent as against tier I cities
• The workforce is more stable in the smaller cities; stickiness is higher
• Sector is promoting balanced regional growth – out of the 99 operational IT SEZs, tier II and III cities hold 44 per cent share

Opportunities galore

Over 35 per cent of the total jobs in tier II and III locations belong to the Manufacturing and IT/Telecom sector, according to the latest TimesJobs.com data.

Demand is high across key professions. Since demand is primarily driven by the Manufacturing and IT/Telecom sector; there is huge demand for engineers and IT staff. Engineers, sales business development and IT/Telecom professionals together account for nearly 50 per cent of the total demand in Tier II and III locations, according to TimesJobs.com data.

Accounting and finance profiles are also sought after in small locations. Industry experts reasoned that a mix of core and support staff is required as a company expands business in these untapped markets.

Maximum demand is for freshers, with less than 2 years of experience followed by candidates with 2-5 years of experience.

Future jobs hubs

This trend is expected to continue in the future as Tier 2/3 cities will have access to a much larger and employable talent pool with 8 of the 9 new IITs being set-up in these locations.

According to NASSCOM revenues from tier II and III cities will grow faster. Currently (FY 10-13), Chandigarh has a CAGR of 40 per cent, Kerala has 26 per cent. With 40 per cent of India’s total infrastructure spend on tier II and III cities, better infrastructure and improved connectivity is expected in times ahead. This will add to the potential of these cities as future job hubs.

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