Tech companies tap smaller towns to connect with talent – Times of India

MUMBAI/CHENNAI: German industrial engineering major Thyssenkrupp wanted to set up a technology nerve centre to power its core business globally and it chose Pune to do so. Other than the proximity to its domain business, going closer to new-age quality tech talent was key for the company to pick the city. In March, CK Birla Group’s IT services and consulting arm Birlasoft opened its first delivery centre in Coimbatore, home to some of the top engineering institutions.
Tier-2 and -3 town campus hiring has been on the rise as organisations look to cut costs while sourcing talent, report Namrata Singh and Sindhu Hariharan. In its campus study conducted from November2022 to April 2023, Deloitte India found that hiring across sectors in tier-2/3 towns jumped 40% over the same period the previous year.
According to the data, shared exclusively with TOI, salary differentials of 19% to 35% have been observed across various industries when comparing talent from tier-2 cities. The pay differential between tier-1 and tier-3 talent can be as high as 50-60%, says Deloitte.
“We are increasingly seeing a preference by organisations to tap tier-2/3 talent, both from an MBA as well as a BTech curriculum standpoint (47% and 52% preference, respectively). This is on account of three reasons. First, the attrition of the talent from tier-2/3 is seen to be much lower than top-10/ tier-1. Second, at the same campus value proposition, the ability of an organisation to get a ‘Day Zero’ slot is much higher in tier-2/ 3. Finally, for colleges within the geographical proximity of the organisation’s presence, it helps them build a better overall brand in the region,” says Neelesh Gupta, director, Deloitte India.
Rohit Gupta, head of thetechnology centre at Thyssenkrupp, says, in terms of talent supply, many of the metros today are at a saturation point. “We also find talent has many distractions in terms of pulls from other companies and other job roles,” he adds.
While there has been some normalisation in costs in recent years, Gupta says there is still a 15-20% cost difference for the company between metros and non-metros.
For Birlasoft, however, Coimbatore was a choice to go closer to top talent, and not a cost-cutting measure. “Our focus is on identifying skilled individuals regardless of their location, be it in metros or tier-2 cities. We believe in tapping talent wherever it exists to ensure a strong, skilled, and diverse workforce for our organisation,” says Arun Dinakar Rao, chief people officer, Birlasoft.
A major concern that still remains for organisations is to bring down attrition. Rao notes lower attrition in tier-2 towns vis-a-vis metros.