India’s hiring landscape is undergoing a significant shift, with companies increasingly looking beyond traditional metropolitan centres for talent. A new report by Genius HRTech has found that a large majority of employers have substantially increased hiring from Tier-II and Tier-III cities over the past two years.
The trend reflects growing confidence in talent available outside cities such as Bengaluru, Mumbai, Hyderabad, Delhi and Pune, while companies are also looking at smaller cities to control costs and access wider talent pools.
69% Employers Increased Hiring From Smaller Cities
According to the survey of 1,729 employers, 69% of organisations said their hiring from Tier-II and Tier-III cities increased by more than 30% over the past two years.
The survey covered employers across sectors including BFSI, FMCG, engineering, IT, manufacturing, telecom, retail and e-commerce.
The trend could become even more pronounced in the coming years. Around 55% of respondents expect the majority of their hiring to shift towards Tier-II and Tier-III cities over the next three years.
Companies See Cost Benefits
Cost efficiency emerged as the biggest reason for companies to expand hiring beyond metros.
Around 39% of employers identified lower costs as the primary advantage of hiring from smaller cities. Employee loyalty was cited by 26%, while 22% pointed to lower attrition.
Another 13% of respondents said access to previously untapped talent was the biggest advantage.
For companies, this means smaller cities are increasingly being considered as long-term workforce locations rather than simply lower-cost alternatives to major metropolitan centres.
Smaller Cities Have Industry-Ready Talent
The availability of skilled workers is also becoming less of a concern.
Around 64% of employers surveyed said Tier-II and Tier-III cities already have industry-ready talent across most functions.
This suggests that companies are finding candidates with the skills needed for mainstream business operations without necessarily having to relocate them to major cities.
Remote and hybrid working models have also made it easier for companies to recruit from locations that were previously outside their traditional hiring networks.
Manufacturing And Engineering Could Lead Hiring
Manufacturing and engineering are expected to be among the biggest beneficiaries of this shift.
Around 37% of respondents expect these sectors to generate the highest hiring demand in Tier-II and Tier-III cities over the next two to three years.
The trend could be supported by the expansion of manufacturing facilities, industrial corridors, infrastructure projects and supply-chain operations beyond India’s largest urban centres.
Other sectors are also increasingly exploring smaller cities for operations, sales, technology and support functions.
Infrastructure Remains A Challenge
Despite the growing interest in smaller cities, companies continue to face challenges.
Around 60% of respondents identified inadequate infrastructure and connectivity as major obstacles to expanding hiring beyond metros.
Reliable transport, office infrastructure, internet connectivity and access to specialised skills will therefore remain important if companies want to build larger operations in these locations.
India’s Job Market Is Becoming More Distributed
The changing hiring pattern suggests that India’s employment geography is becoming more distributed.
Instead of concentrating recruitment in a handful of metropolitan hubs, companies are increasingly building access to talent across multiple cities.
For workers in smaller cities, this could mean greater access to organised-sector jobs without having to relocate to expensive metros.
For employers, the strategy offers access to new talent pools, potentially lower operating costs and the opportunity to build long-term workforce hubs.
The next stage of this trend will depend on whether smaller cities can strengthen infrastructure and develop specialised skills at the pace required by India’s expanding businesses.
Summary
India’s hiring landscape is moving beyond traditional metros as companies increasingly recruit from Tier-II and Tier-III cities. A Genius HRTech survey of 1,729 employers found that 69% increased hiring from smaller cities by more than 30% in two years. Cost savings, employee loyalty and lower attrition are major drivers, while manufacturing and engineering are expected to lead future hiring.
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