By Indian engineer B. Ramachandran, aged 47, has opted for life in smaller cities over Bengaluru and Chennai, favoring the tranquility of Madurai, Tamil Nadu.
Embracing Change After the Pandemic
Post-pandemic, Ramachandran relocated to Madurai, where he can care for his ageing mother while working for Genpact, a technology services firm based in New York.
Attraction of Smaller Cities for IT Firms
IT companies are expanding into smaller cities like Madurai to leverage workers like Ramachandran and to benefit from lower land costs, rents, and wages.
Shift in Hiring Dynamics
The ease of hiring in tier 2 cities contrasts with pre-pandemic trends, where talent largely migrated from smaller cities to major IT hubs for employment.
Changing Recruitment Practices
Selvaganesh M.P., founder of IT firm SMI, now finds it unnecessary to travel to Bengaluru and Chennai to recruit talent, reflecting a shift in hiring dynamics post-COVID-19.
Corporate Expansion Beyond Major Hubs
Companies like Cognizant and Tata Consultancy Services are expanding into smaller cities, driven by cost efficiency, government incentives, and talent availability.
Expanding Workforce in Tier 2 Cities
HCLTech, for instance, has witnessed significant growth in its Madurai offices, exceeding its target of 5,000 staff by 2025, and has expanded into other tier 2 locations like Nagpur, Vijayawada, and Lucknow.
Benefits for Companies
Industry experts suggest that this trend helps companies reduce attrition and costs amidst weak sales growth in the Indian IT sector, which faces global economic uncertainty.
Financial Advantages
Salaries in smaller cities are 25%-30% lower, and real estate rentals are approximately 50% cheaper compared to established tech hubs, as per a report by Deloitte and Nasscom.
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