Winning Bizness Desk

Mumbai.India’s hiring momentum is clearly shifting beyond metro cities, with tier-2 and tier-3 locations emerging as strong job creators. Cities such as Indore, Jaipur, Ahmedabad, Kochi and Chandigarh are witnessing faster recruitment growth than metros, driven by lower costs, stable talent pools and expanding technology roles. According to leading jobs and talent platform Foundit, hiring growth in smaller cities has touched nearly 20 percent, compared to 14 percent in metro markets. The platform estimates that India could see around 1.28 crore new jobs this year, with a significant share coming from non-metro regions.

Hiring growth accelerates beyond metro cities

The rise of smaller cities is not limited to volume alone but also reflects a change in employer strategy. An Upgrade Recruit report notes that companies are setting up “regional capability corridors” in tier-2 and tier-3 cities, supported by artificial intelligence adoption and improved workforce stability. AI-linked technology roles could rise from 20 percent today to 32 percent by 2027. Nearly 79 percent of HR leaders say employee retention in smaller cities is equal to or better than metro locations, making these markets more attractive for long-term expansion.

Tech roles shift steadily to smaller markets

The contribution of tier-2 and tier-3 cities to overall tech hiring stood at about 12 percent in FY24 and is expected to reach nearly 19.7 percent by 2027. Companies are prioritising roles such as engineering, customer support, data analytics and backend operations. This shift is creating local skill ecosystems and reducing migration pressure on large cities. Over the past year, placement mandates from these cities have risen by around 40 percent, especially for AI engineers, data analysts and automation specialists across BFSI, IT services and manufacturing sectors.

Key drivers behind small-city job expansion

Several factors are pushing companies to look beyond tier-1 locations:

• Operating costs in tier-2 cities are 10 to 35 percent lower than metros
• State policies in Tamil Nadu, Karnataka and others encourage decentralised hiring
• Broader and less competitive talent pools improve workforce stability
• Faster infrastructure development supports tech and service operations

Cities such as Ahmedabad’s GIFT City, Coimbatore, Kochi, Indore and Lucknow now account for nearly one-fourth of AI-related hiring mandates nationwide.

Global capability centres fuel long-term growth

Global Capability Centres, or GCCs, are playing a major role in reshaping the job map. India already hosts over 1,500 GCCs, generating around 13 lakh jobs. Industry estimates suggest foreign companies could invest up to Rs 9.6 lakh crore in GCCs by 2030, with more than 500 new centres likely by 2026. These centres, already present in Visakhapatnam, Jaipur, Vadodara, Kochi and Chandigarh, deliver services across finance, HR, supply chain, engineering, R&D and digital cloud functions.

Why tier-2 cities are becoming preferred job hubs

Multiple social and economic factors are reinforcing this trend:

• Total operational costs are significantly lower than tier-1 cities
• AI and data science roles offer up to 20 percent higher pay
• 65 percent of women tech professionals prefer working closer to home
• Nearly 50 percent of registered startups are based in tier-2 and tier-3 cities
• About 60 percent of India’s graduates come from smaller towns

According to NASSCOM and Deloitte’s Emerging Tech Hubs report, 26 cities including Jaipur, Indore, Coimbatore and Ahmedabad have already evolved into recognised technology hubs, signalling a lasting shift in India’s employment landscape.