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Renewed Focus Seen Among Headhunters For Hiring In Small Towns, Cities

The talent pool in tier II and tier III cities is quite small. Hence, a skilled employee residing in suburban areas doesn’t need to face tough competition for securing a job at any company. Therefore, they feel content and stress-free

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Gone are the days when MNCs focused only on metro cities to acquire talent . With the Indian economy growing astoundingly in the last decade,  companies have now shifted their attention to tier II and tier II cities. The trend of acquiring talent from small cities and towns was initially adopted by BPOs and manufacturing companies, but soon other industries followed suit. Although not yet happening on a large scale, there is a reverse flow of talent in India  to smaller cities from metro cities because small towns offer a better quality of life. This is mainly because urban areas today are struggling with issues such as lack of space, severe pollution, poor infrastructure and over-population.

From a company’s perspective, several factors are attributed to this trend, the biggest one being securing talent from big cities for  employment in small towns. Also, tapping into tier II and tier II cities also helps  expand such companies pan-India presence. Other than that, elements including a higher catchment area, reduced attrition, lower operational costs etc. also play an important role. Listed below are a few examples:

For companies
Low infrastructure cost: For most manufacturing and R&D companies, setting up operations in metro cities is often impossible because of high property rates. On the other hand, the startup cost in smaller cities is fairly low. Hence, companies can take a larger office space with better amenities and facilities without spending a bomb. Apart from the cost of renting a workspace, other services are also comparatively inexpensive in tier II and tier III cities. 

Reduced employee cost: Since the cost of living in small towns and cities is notably lower than their that in large cities, the overall employee cost is also less. Companies are not required to pay a hefty sum to their employees because the  cost of living is lower in smaller towns. 

Efficient employees: In any metro city, an employee on average spends about 1 hour to 2 hours to commute to work. For entry-level employees, the commuting time is even more as they can only afford to live in suburban areas and the travelling distance increases. Whereas in smaller cities, most employees have a commute time that’s almost negligible, which means they get to spend more time with their friends and families. A better work-life balance also equals  happier and more productive employees. 

Higher employee retention rate: Metro cities undoubtedly offer more job opportunities for skilled professionals. While there is no lack of talent in large cities, there is a risk that bigger companies will poach them. However, there are fewer opportunities available in smaller cities, which lead to higher employee retention rate. The talent pool in tier II and tier II cities may not be huge, but highly efficient employees are not rare to find. 

For employees
Better quality of life: Employees in smaller cities are typically paid 25% less than those living in metro cities. However, the cost of rent in tier II and tier II cities is almost half that compared to tier I cities. In addition to the low cost of living, a short commuting time to work also helps the employees lead a better quality of life. They are able to achieve a perfect work-life balance, something their large city counterparts can only dream of. 

Less competition: The talent pool in tier II and tier III cities is quite small. Hence, a skilled employee residing in suburban areas doesn’t need to face tough competition for securing a job at any company. Therefore, they feel content and stress-free. 

In a country where 70 per cent of the population resides in villages and suburban areas, the participation of tier II and tier III cities in the national hiring process is necessary. With large companies finally understanding this truth, the number of unemployed youth in India will reduce go  drastically.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

Tags assigned to this article:
talent retention human resources

Vidur Gupta

The author is the Managing Partner of Spectrum Talent Management

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