- India's tier-2 cities are developing rapidly and are home to several industrial clusters and startup hubs, particularly in the IT, manufacturing, and export sectors.
- Termed as the "reversal of talent movement", many urban professionals in India are relocating to tier-2 cities to seek better career opportunities, benefit from lower living costs, and now – access cleaner air.
- Several multinational companies, including HCL, Infosys, Wipro, and Ericsson have expanded their operations in tier-2 cities due to the availability of talent, infrastructure, cheaper real estate, and low cost of setting up.
Tier-2 cities have emerged as a strong base for industrial clusters and startup incubators in India, leading to the emergence of new IT and manufacturing hubs.
Many multinational companies (MNCs) have expanded their operations to these cities due to the increasing availability of talent, low cost of setting up, competitive wage rates, affordable real estate, and lower operational costs.
Further, it is important to note that Indian cities are classified into tiers – tier-1, 2, and 3 – based on their population size, and this may not necessarily indicate their level of economic development.
In the last three to five years, many of these cities have become preferred destinations for urban professionals in India as they value the conditions of livability – cleaner air and green environment – over some of the concrete benefits of tier-1 cities. However, tier-2 cities are also themselves expanding and improving their transport connectivity and infrastructure – further proving attractive to both businesses and talents.
On their part, organizations setting up in tier-2 cities save on costs as salary structures can be more competitive and the cost to company (CTC) per employee is less than in tier-1 cities. Employees, too, save more due to cheaper living costs.
According to the Experis IT Employment Outlook Survey (EITEOS) conducted in December 2019, employers in tier-2 cities, such as Chandigarh and Jaipur are looking to hire more IT talent in the near term.
In this article we spotlight the top five tier-2 cities foreign entities should be looking at when making their hiring decisions. This list is based on the analysis provided by the LinkedIn India Workforce Report 2018 and other surveys conducted by career and recruitment platforms in India.
Chandigarh, a union territory of India, is the joint capital of the northern states of Punjab and Haryana.
It is India's first planned city, and has a strong transport network, established industrial townships, and is a hub for commercial and business activity.
Chandigarh is ranked at the top along with Kerala in Niti Aayog's SDG India Index, which evaluates the progress of states and union territories based on social, economic, and environmental parameters.
Major legacy industries based here include tourism, hospitality, food products, wood products, furniture, textiles, art silk hosiery, and machinery.
While there are many job opportunities in these industries, hiring in the following sectors has significantly improved – engineering, manufacturing, automobile, and banking. Recruiters in Chandigarh often look for professionals in the field of accounting, finance, customer service, and administration.
According to a November 2019 survey by job portal TimesJobs, most jobs in India were posted for the Delhi-NCR region followed by Chandigarh. In the last two years, the city has also become home to start-ups and co-working spaces, indicating that India's tier-2 cities are capable of providing key technological and economical support for organizations to thrive.
Chandigarh has several educational institutions that cater to talent development in the city. These include Panjab University, Post Graduate Institute of Medical Education and Research, Punjab Engineering College, Post Graduate Government College, and DAV College.
Major MNCs that have a presence in Chandigarh include – Infosys, Tech Mahindra, Dell Technologies, HDFC Bank, Airtel, HCL, Kotak Mahindra, OYO, Wipro, Uber, Vodafone, Ericsson, and Marriott International.
The third largest city in the state of Gujarat, Vadodara was on the list of the top 10 Indian cities attracting talent, according to the LinkedIn India Workforce Report. Major industries in the city are petrochemicals, engineering, chemicals, pharmaceuticals, plastics, IT, and foreign exchange services.
According to a survey by jobs portal monster.com from August 2019, hiring in Vadodara went up by 11 percent in the first half of 2019. Talent recruitment is high for IT, civil, and mechanical engineers, web developers, and quality assurance managers and in the pharmaceutical sector.
The University of Baroda, Indian Institute of Information Technology, GSFC University, Baroda Medical College, Vadodara Institute of Engineering, and Manubhai Patel Dental College are some of the leading educational institutions situated in the city.
These institutions have been keenly investing in their infrastructure and academic staff to establish Vadodara as a center of learning and to attract students from around the country and abroad. This move will help organizations pick the best talent from a diversifying candidate pool.
Some of the reputed MNCs that have set up in Vadodara include Tata Consultancy Services (TCS), Larsen & Toubro, Nielsen, ABB, Mastercard, Schneider Electric, Siemens, Indian Oil, GE, Hero MotoCorp, General Motors, and Cadila Pharmaceuticals.
Capital of the state of Rajasthan, Jaipur is an important micro, small, and medium enterprises (SME) cluster in north India. Established industries in the area include tourism, textile, food and beverages, tobacco, mining, automobiles and bicycles manufacturing, and gems and jewelry. However, in recent years, Jaipur has been pushing to develop into an IT hub in the country and received approval in 2018 to set up an IT/ITeS SEZ.
In terms of hiring, the top sectors are IT, travel and tourism, outsourcing services, financial services, and mining industries, particularly for entry level and middle management positions.
According to LinkedIn's India Workforce Report 2018, Jaipur is among the top 10 destinations for job seekers who are looking to immigrate to another city to find career opportunities. (Apart from Jaipur, Chandigarh and Vadodara are also mentioned in this list.)
The availability of a skilled workforce is facilitated by the presence of reputed higher educational institutions. Major institutions include the University of Rajasthan, IIS University, Manipal University, National Institute of Agricultural Management, Indian Institute of Health Management Research, Jaipur National University, and Malviya National Institute of Technology.
Prominent MNCs based here include Genpact, Infosys, Deutsche Bank, Ericsson, HCL, MetLife, Vodafone, OYO, Amazon, ITC, Honda, Trimax, and Jio.
Lucknow, the capital of India's most populous state Uttar Pradesh, is a renowned historical cultural center. However, over the last six years, it has been steadily evolving into a successful IT hub. This is due to major investments made by leading technology MNCs – TCS and HCL Technologies.
As of 2016, HCL had committed to invest about INR 1,500 crore (US$15 billion) to developing an IT city in Lucknow. The project is classified as under establishing a special economic zone (SEZ) and aims to be a sustainable technology hub. It is expected that the SEZ will create approximately 25,000 job opportunities.
Apart from IT, other important industries in Lucknow include aeronautics, automobile, machine tools, distillery chemicals, and furniture. Top hiring sectors are manufacturing, engineering, IT, telecom, FMCG, and real estate.
In terms of the talent force available, the country's premier business and management institute, the Indian Institute of Management (IIM), has a branch here. Other premier educational institutions in the city are University of Lucknow, Bahasaheb Bhimrao Ambedkar University, Amity University, Dr. A.P.J Abdul Kalam Technical University, Sanjay Gandhi Post Graduate Institute of Medical Sciences, King George's Medical University, and Dr. Ram Manohar Lohia Institute of Medical Sciences.
Major MNCs with a presence in Lucknow are HCL, TCS, Tata Motors, Airtel, Vodafone, ITC, OYO, Wipro, Ericsson, Nokia, Amazon, Nuance, Cipla, Nestle, and Abbott.
5. Kochi (Cochin)
Kochi (also known as Cochin), an important port city in the southern most state of Kerala, is another tier-2 city that has fast become an IT hub. The state government has established an info park that houses 392 companies, including major MNCS like TCS, HCL, Wipro, Ernst & Young, and Cognizant, which employed around 42,000 professionals as of 2018.
Since Kochi is a port city, its main industries include seafood and spices export, shipping, and shipbuilding. Other key industries are manufacturing, health services, banking, chemical industries, and construction.
When it comes to major hiring sectors, jobs in the field of banking, marketing, retail, insurance, finance, manufacturing, and construction are in high demand.
It is also expected that tier-2 cities like Kochi will slowly develop into start-up hubs, resulting in the creation of more dispersed regional jobs and investment opportunities. Reputed educational institutions in the city include Cochin University of Science and Technology, Cochin College, St. Teresa's College, Kerala University of Fisheries and Ocean Studies, Amrita Institute of Medical Sciences and Research Centre, Rajagiri Business School, and SCMS School of Technology and Management.
Moreover, the state of Kerala also holds the highest literacy rate (93 percent) in India, providing organizations recruiting in the region with highly qualified candidates for their job postings.
Prominent MNCs with a presence in Kochi include TCS, Cognizant Technology Solutions, Wipro, Ernst & Young, Fingent, IBS Software, KPMG, Xerox, IBS Software Services, and Avaya.
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