Big vs Small firms battle for talent in tier 2& 3 cities

The battle for talent is being played in smaller towns and cities in India where the workforce is no longer coming cheap. Recruitment firms note that given the right profile, many would prefer to stay in smaller towns than get swayed by bigger brands and shift to large metros where cost of living does not match up to the incremental increase in paypackets. This tussle comes at a time when larger companies specially in the IT, ITes and retail sectors are tapping into the interiors and some even opening offices there to attract talent.

“In tier 2 and 3 today employees are looking beyond brands. If a smaller company can give them the work experience, then they are opting for it. A lot also depends on the negotiations and workforce in smaller towns are including costs of travel back to home etc if they need to be shifted to larger metros,” said A.R. Ramesh, director of digital business solutions, professional staffing and international engagement of Adecco India.

The data collated by skillset platform myXP-where executives can log in for jobs and internships charts out salaries given for junior roles. In its database , it has companies like -WebHopers Infotech Pvt Ltd which offers Rs 2-2.2 lakh in Panchkula, Young Minds Technology Solutions Pvt Ltd gives Rs 2.4 lakhs in Tirupati, Softobiz Technologies Pvt. Ltd offers Rs 4 lakh in Sahibzada (Mohali) amongst others.

Nikhil Sikri, co-founder and chief executive officer of myXP told Mint that larger tech and retail firms hire entry level executives in tech, sales, field operations starting at Rs 2.5 lakh. “There is barely a 20% salary difference and people prefer to stay in hometowns. Although resistance is not much to move to metros if the jobs are unavailable in their hometowns,” said Sikri.

The war for talent comes on the back of big companies like IBM, Tech Mahindra and many others who are diving into places like Indore, Vijayawada, Coimbatore, Kochi, Ahmedabad, and suburbs of cities such as Hyderabad etc. There is a cost advantage for the large scale startup and tech recruiters and for last two years with work from home, companies were location agnostic.

But now that work from home has morphed into a hybrid form where employees are put into a roster and many have to head office couple of times a week, a shift closer to work place is forcing employees to think twice.

“There is a definite tussle between larger firms specially tech and smaller companies for talent in small towns. The employee may join for 6 months in an unknown company but for better exposure he will have to move to a larger firm,” said Guruprasad Srinivasan, group chief executive of recruitment firm, Quess Corp.

The recruitment firm said that before pandemic the open mandates between metros and small towns was 80:20 while now it is 70:30. “One also has to look into real estate costs, rising inflation which is pushing large firms to go deeper interiors and hire from smaller towns while providing work from home option,” added Srinivasan.

But settling for a smaller firm may not always be the best option , specially in sectors like tech where the big firms can invest more in upping skillsets.

“The tech world moves fast in terms of versions and variations; the preferred workforce would always be a relevant one. If relevant work does not flow into these locations and brands then these engineers would find themselves in trouble,” said Supaul Chanda, vice president of technology recruitment firm Experis (of Manpower Group).