While the smaller towns and cities are seeing thriving demand for manpower with many companies ramping up their presence to meet rising consumer demand, job creation remains muted in the metros as companies tread cautiously amid macroeconomic and geopolitical headwinds, according to staffing companies such as Teamlease Services, Xpheno and Foundit.
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Tier 2 and 3 towns such as Rajpura, Kushaiguda, Hosur, Ludhiana, Jodhpur, Jabalpur, Kalwara, Zirakpur recorded a 17% year-on-year increase in hiring for entry-level white collar and blue-collar jobs across e-commerce, manufacturing, BFSI, and telecom sectors in the September quarter, showed data from Teamlease Services. This compares with a 5% decline in similar jobs in the metros.
Data from Xpheno echoes the trend. It showed a near twofold jump in entry-level white collar jobs in small towns in October compared with a year earlier.
A mix of factors, including penetration of banks and financial services companies into new and unbanked regions, growth in ecommerce and retail sales, and demand for frontline workers in manufacturing sectors such as auto, electronics, and smartphones is driving this trend, according to executives at staffing firms.
“Many companies are looking to expand beyond the metro cities, leading to a rise in demand for talent, which is in short supply,” said Kartik Narayan, chief executive, staffing, at TeamLease Services. “There is a huge push for personal loan, home loan, credit card sales in BFSI. The market is expanding for ecommerce and retail companies too, while phone, electronics, auto and large contract manufacturers also need more people to ramp up production,” he added.Anil Ethanur, co-founder, Xpheno concurred and said, “Companies in fintech, NBFC, MSME, ecommerce and retail are looking to increase footprint in tier 2 and 3 cities even as hiring in mega cities and especially in the technology and startup sectors – the largest employment generators – continue to be muted.”Top roles in demand include sales and support (credit card, home loans, automobile sales), warehousing and delivery, machine operators, and other shop floor workers.
For instance, IIFL’s gold loan business has doubled its branch network to 3,000 in four years due to ballooning demand for credit from underserved smaller locations.
“To meet the business expansion, we have become a major employer in tier 2, tier 3 and tier 4 cities,” said Saurabh Kumar, head of gold loan business, IIFL Finance. So far in FY24, the company has added about 4,000 people in smaller locations and is likely to add 2,000 more by March-end.
“We see this trend continue as there is a massive business opportunity to finance the under-banked and unbanked in smaller locations,” said Kumar.
Motilal Oswal Financial Services Group CHRO Niren Srivastava said: “There is a significant uptick in tier 2 and 3 hiring for housing finance and broking & distribution businesses.”
“Improved infrastructure, including transportation, connectivity, and digital access, has made tier 2 and 3 cities more conducive for businesses to operate and expand their operations,” said Sekhar Garisa, CEO, foundit, a part of Quess. Employers are looking to tap into a growing talent pool, expand their markets, and reduce operational costs in these new regions, he added.