Hiring in Tier-2 and Tier-3 cities is often discussed through the economics of talent: different salary markets, lower operating costs and access to pools of people beyond the metros.
Godrej Capital is approaching the question from the other end.
“If you have to expand in India, you’ve got to go deeper in the geography, especially if you have products that talk to that customer. You’ll have to go to where the customer is,” says Bhavya Misra, chief human resources officer.
For a lending business, proximity to the customer has implications beyond where a branch is located. Loan behaviour, local economic conditions and the rhythms of small-business activity can vary considerably between markets. Someone who comes from that geography may understand things that are harder to acquire through formal training alone: the local business environment, social context, seasonal patterns and how customers in that market behave.
“If as an organisation we want to understand the customer, the local ethos, the local socio-economic structure, what happens, what’s the significance of certain days, festivals, everything that goes on there socially, it is very important that you have people who come in from there into your company.”
Bhavya Misra, CHRO, Godrej Capital
That turns local hiring from a cost decision into a capability question.
Godrej Capital’s larger ambition is to take it further. It does not simply want people from those markets selling to local customers. It wants some of them eventually running the business there.
Local hiring at the same pay
Misra is clear on one part of the proposition: Godrej Capital does not pay less for the same role simply because it is located in a smaller city.
The rationale for going local, she says, rests instead on customer understanding, talent stability and changing career aspirations.
Good education and professional ambition are no longer concentrated in the largest cities. At the same time, not everyone with those ambitions necessarily wants to move to Mumbai or Bengaluru to pursue them. For an organisation expanding into smaller markets, the ability to build a career closer to home can widen the available talent pool.
“If as an organisation we want to understand the customer, the local ethos, the local socio-economic structure, what happens, what’s the significance of certain days, festivals, everything that goes on there socially, it is very important that you have people who come in from there into your company,” Misra says.
The argument becomes particularly relevant when the employee is making decisions about customers rather than simply processing transactions.
Local knowledge does not replace lending discipline or formal credit processes. But it can add context to them.
From campus to branch manager
The more ambitious part of the strategy begins after recruitment.
As Godrej Capital expands into new states, including Rajasthan, Andhra Pradesh and Tamil Nadu through its affordable-housing business, it is looking at campuses around its branches rather than relying entirely on talent brought in from larger cities.
“Our own effort, conscious effort has been that when we go into these states, wherever we are opening our branches, around those branches in those cities, can we hire from campuses that are there, get in those people, and then build programmes that can help build their capability over a period of time?” Misra says.
The intention is to create a pipeline that begins locally but does not end there.
Misra wants campus hires from these markets eventually to become branch managers, state heads and, potentially, move into national leadership roles.
That changes the proposition considerably.
Recruiting somebody from a local campus solves an immediate talent requirement. Developing that person into a state head could take years. Between those two points sit performance opportunities, manager decisions, mobility, exposure to different parts of the business and access to roles carrying progressively greater responsibility.
It is here that the success of the strategy will eventually become visible. Not in how many local hires enter Godrej Capital, but in how far they are able to progress once they are inside.
There is a diversity dimension too.
Misra says women’s representation becomes harder to sustain as companies move into smaller markets, particularly in sales and credit roles. Local campus hiring gives Godrej Capital an opportunity to bring women into those functions earlier and develop them rather than depending solely on the existing pool of experienced female talent in each market.
The hybrid entry
Going local does not mean Godrej Capital enters a new geography entirely with local hires.
When the company moves into a market for the first time, experienced employees from other locations help establish business processes, culture and ways of working. Local employees are hired alongside them and gradually build the capability to take on larger responsibilities.
“A company has to do both. One part of it is when you are just starting in a location. You might use people from other locations to build an understanding in that market of how we work, what’s the culture like, how do we like to do business, at the same time hire locally and train them to become self-sufficient, capable, and be able to take on larger roles,” Misra says.
The model creates a two-way requirement.
Experienced employees bring organisational knowledge into the new market. Local employees bring knowledge of the market back into the organisation.
Getting the balance right matters. Too much dependence on people transferred from established locations can limit the autonomy of the local team. Moving entirely to local leadership before people have enough organisational experience creates a different risk.
The intended transition is therefore from imported organisational knowledge towards locally developed capability.
Finding that talent also requires Godrej Capital to look beyond the institutions that dominate conventional corporate recruitment. Misra says the company has to identify local campuses and build relationships with institutions close to the markets in which it is expanding.
AI-based interviewing and shortlisting can extend recruitment reach. They do not remove the need to know where to look.
The same learning, delivered differently
Once people are hired locally, the next question is how much of their development should be different.
Godrej Capital runs a structured onboarding journey, with campus recruits receiving an additional one-week immersion into the lending business, products, customers and practical requirements of their roles.
The company does not change what employees need to learn according to geography. It changes how some of that learning is communicated.
“You might teach the same things because my product, my policies, my culture is not going to change based on which city you are based in. But what will change is how do I explain it to you? How do I make it more relatable to you by way of language, by way of examples which are more contextual to you?” Misra says.
It is a useful distinction between standardisation and localisation.
Credit policies cannot mean one thing in one city and something else elsewhere. Nor can organisational values change every time the company crosses a state border. But the examples, language and context through which employees understand them need not be identical.
The standard stays common. The route to understanding it can change.
The attrition test
Retention provides a more immediate measure of how the proposition is working.
Godrej Capital’s current attrition is between 20 and 25 per cent. Misra puts the corresponding industry level at around 35 to 40 per cent. The company wants to bring its own figure below 20 per cent.
Local hiring could contribute to that if employees value the opportunity to build careers without having to leave their home markets.
But retention alone would not demonstrate that the leadership pipeline is working.
For that, career mobility becomes more important.
Employees can grow within their city, move between geographies, shift across products or change business lines. Internal job postings provide another route to mobility as the organisation expands.
“The objective is to get the best possible people to work for my organisation, whether that talent exists in Tier-1, Tier-2, Tier-3, even deeper than that, we will make all our efforts to reach there, and over a period of time also invest in them, to grow them, to have them take larger and larger responsibilities,” Misra says.
That last part is what makes Godrej Capital’s smaller-city hiring strategy worth watching.
Hiring locally is relatively easy to measure. The company will know how many people it recruited, where they came from and how long they stayed.
The more consequential numbers will take longer to emerge.
How many become branch managers? How many move across businesses? How many women hired from local campuses progress into sales and credit leadership? And eventually, how many state heads began their careers in the markets they now lead?
Godrej Capital’s proposition is not simply that talent exists beyond the metros. That argument has largely been settled.
The harder proposition is that talent hired there should not find its career confined there.
If local hiring is the beginning of the strategy, local hires reaching larger leadership roles will be the evidence that it worked.