Low cost, abundant talent: Why IT cos are moving to smaller cities

Lower cost and attrition rates are making tier II and tier III locations attractive for IT firms

India’s top IT service providers including Accenture, Tech Mahindra, HCL Technologies and Mindtree are setting up shops in tier II and tier III locations amid a talent crunch in the usual metropolitan spots, The Economic Times reported.

Accenture is expanding to Jaipur, Indore and Coimbatore, while Tech Mahindra has recruited from Thiruvananthapuram, Vizag, Nagpur, Chandigarh, Indore, Vijayawada and Coimbatore. mid-level companies like Mindtree and Larsen & Toubro Infotech are also hiring rapidly in smaller cities.

Tier-II and tier-III cities are attractive locations for these companies as the cost to set up is low, as is the attrition rate against the higher availability of talent.

Accenture has ramped up hiring for specialised areas like digital, cloud, security and data from small cities. HCL has launched its ‘New Vistas’ strategy, as part of which it is seeking to tap the talent pool and a better quality of life in these towns. “Campaigns like Stay Rooted which aims to provide global career opportunities to people in their hometowns, and Come Back Home, which provided avenues for people to return to their cities and still pursue global careers, were instrumental in growing and nurturing talent in our New Vistas locations,” a spokesperson told ET.

When Covid-19 hit, companies were seeking refuge from high costs and looking to diversify recruitment in these centres. Now it is to retain employees not wishing to return to base locations. State governments, including in Karnataka and West Bengal, have also asked companies to set up “satellite offices” in their tier-II and tier-III cities.

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