All big Indian and multinational giants have their presence in tier 1 cities and the metros. Naturally, the job opportunities in these locations are immense. This is one of the prime reasons why attrition in these cities is very high. What about the tier two and three cities then? Is attrition high there too or are people from such cities more stable?
Very recently, CP Gurnani, CEO, Tech Mahindra, mentioned in a media interaction that at his company, data analytics shows that attrition level is relatively less in people from tier 2 and tier 3 cities as compared to employees in the metros. In fact, it is not very surprising to notice that even Apparao V, CHRO, HCL Technologies, has very openly conveyed to the media that HCL is now following a strategy to attract more talent from tier 2 and 3 cities and expand in those areas as it would want more stability in the employees.
In fact, many of the IT companies see tier 2 and 3 cities in India as emerging areas for tech talent that comes at a comparatively lesser cost. They look towards these smaller cities for cost effectiveness, stability and reliability.
“It is not just Uniphore. I see a trend in all IT firms turning towards talent from tier 2 and 3 cities, for three major reasons — cost, stability and reliability”
Anurag Verma, VP-HR, Uniphore
During a chat with HRKatha, Anurag Verma, VP-HR, Uniphore, agrees that in his company as well, he has seen a trend where attrition amongst tech talent from tier 2 and 3 cities is way less compared to the metros. Verma shares that in the metros, the Company sees an attrition of 20 per cent on an average, annually, whereas, for the talent in the tier 2 and 3 cities, this figure is only 12 per cent. There is a clear and rather significant difference of eight per cent!
It is not just the stability, which is higher in tier 2 and 3 cities. Verma admits to witnessing almost 100 per cent job-acceptance ratio in the smaller cities, whereas in the metros, this ratio varies between 70 and 80 per cent.
“It is not just Uniphore. I see a trend in all IT firms turning towards talent from tier 2 and 3 cities, for three major reasons — cost, stability and reliability,” says Verma.
Just like many other IT firms, Uniphore is also looking towards Coimbatore, Trichy , Warangal, Visakhapatnam, Nagpur, Ahmednagar, Nasik and other such smaller cities, to tap the great tech talent they have to offer. “The pandemic has actually changed the talent game over the last few years. Since we all enjoy the flexibility to work from home, it is very easy to onboard people from across the country,” tells Verma.
Even Lalit Kar, SVP-HR, Reliance Digital, notices that people in tier two and three cities are more stable compared to people in the metros. But the case may differ for those working out of their home cities and people from tier 2 and 3 cities who move to the metros. Kar points out that those arriving in the metros from tier 2 and 3 cities exhibit high levels of stability in their first job, but then, they get carried away by the innumerable opportunities available in the market, and end up behaving like their metro counterparts. Kar shares that at Reliance Digital, the difference in attrition rate between tier 1 and tier 2 cities is almost 10 per cent. This difference further increases when the tier 1 cities are compared with the tier 3 cities in India.
“Hotels give perks such as accommodation to workers because of which, the attrition amongst such talent is less”
Prashant Khullar, SVP-HR, Max Life Insurance
Kar shares an interesting insight. For Reliance digital, the educational requirement at the shop floor is 12th standard-pass. Once, the Company made an offer to its employees wherein those from the smaller towns could opt to move back to their hometowns and join the stores in their respective towns in Bihar, Madhya Pradesh or Jharkhand. Surprisingly, there were hardly any takers for this offer, simply because there were not many in the workforce from such areas. This only proved that “Mostly, such talent does not move out of their hometowns. This is one of the reasons why they are more stable,” asserts Kar. Since such talent prefers to stay put in their own towns, opportunities being less, they hardly get a chance to move to any other firm or establishment. Also, since the minimum wage has increased, attrition has gone down.
For Verma, people who come from the tier 2 and 3 cities show the enthusiasm and zeal to succeed and rise up the corporate ladder to prove themselves. “They know they are competing with the best, and therefore, they show a lot of desire to achieve more, which keeps them motivated,” mentions Verma. However, Verma also predicts that this phenomenon of less attrition in tier 2 and 3 cities will vanish after a few years, since many IT firms are now expanding their operations into such cities and the talent there will have more and more opportunities to move out.
“Mostly, such talent does not move out of their hometowns. This is one of the reasons why they are more stable”
Lalit Kar, SVP-HR, Reliance Digital
Speaking with HRKatha, Prashant Khullar, SVP-HR, Max Life Insurance, shares that in his company or sector he does not really witness a trend of lesser attrition rate in tier 2 and 3 cities compared to the metros. However, he does mention that his experience in the hospitality sector shows that such a trend was still quite relevant there. “Hotels give perks such as accommodation to workers because of which, the attrition amongst such talent is less,” shares Khullar. “But things have now changed. Talent from the tier 2 or 3 cities is now getting exposed to innumerable opportunities, and hence, has a choice,” he adds.
Clearly, talent from smaller cities tends to be more stable and more economical than their counterparts in the metros. Although the trend is rather prominent in the IT services sector presently, other services sectors are not untouched by this phenomenon.