For decades, India’s economic growth was concentrated in metro hubs like Mumbai, Bengaluru, Delhi, Chennai, Hyderabad, and Pune, where global corporations set up operations and attracted talent nationwide. But today, a new narrative is emerging not in high-rise business parks, but in the expanding talent corridors of Tier 2 and 3 cities. According to Apna’s ‘India at Work – Q1 2025’ report, over 3.1 lakh jobs were posted in Q1 2025—a 26% increase year-on-year. Small and medium businesses (SMBs) led this surge, posting over 2.1 lakh jobs, and job applications reached a record 1.81 crore, up 30% from the previous year.
The shift toward hiring from these cities is not just a tactical move. It’s a socio-economic transformation. It has the power to democratize opportunity, bridge the urban-rural talent divide, and foster true workforce inclusion. Hybrid work models, the need for resilient talent pipelines, and a growing focus on accessibility and diversity are shaping this evolution.
What’s Driving the Shift?
- Mainstreaming of Hybrid and Remote Work
The pandemic revolutionized work models. Remote and hybrid setups, once considered exceptions, are now standard practice. This change has decoupled employment from geography. Talent can now contribute to the economy from their hometowns, provided there’s a reliable internet connection and a laptop. Between 2023 and 2024, hiring in Tier 2 and 3 cities increased by 25–35% across sectors such as retail, BFSI, healthcare, and manufacturing. This indicates a growing trend of companies leveraging affordable talent and hybrid work models. - Rising Digital Skilling and Infrastructure
Tier 2 and 3 cities are seeing a surge in digital literacy, supported by coding bootcamps, fintech growth, online certifications, and startup ecosystems. In Q1 2025, job postings for software/web developer roles in Tier 2 cities rose by 65.4%, with a 42% rise in fresher applications for these positions, reflecting the growing demand for advanced tech talent and digital skills. As infrastructure improves, these cities are becoming fertile grounds for emerging talent. - Business Benefits for Employers
Non-metro hiring brings a cost advantage with lower salaries, lower operational costs, and reduced attrition. Employees from smaller towns are more likely to stay longer due to family proximity and better work-life balance. For GCCs and large tech firms, this translates into stable, cost-efficient operations. SMBs have adopted AI-powered hiring tools, halving time-to-hire and reducing hiring costs by 25%, while attracting over 1.3 crore job applications in Q1 2025 alone.
A Skill-First, Location-Second Mindset
Forward-looking organizations are adopting a skill-first approach, focusing on what candidates can do, rather than where they are from. This shift widens the talent pool, enabling greater participation from women, persons with disabilities, and economically marginalized communities.
A young woman from a Tier 3 town, equipped with digital skills, can now join a Fortune 500 company without relocating, thanks to hybrid roles and virtual onboarding. This redefines accessibility and creates a more equitable workforce.
Women’s participation in the workforce soared, with over 62 lakh applications, a 23% year-on-year jump. Applications from women for enterprise roles doubled, marking a 92% surge, especially in Tier 2 and 3 cities like Chandigarh, Indore, and Jamshedpur. Freshers from non-metro areas contributed over 66 lakh applications, a 46% increase, with many new users holding formal degrees or certifications.
The Role of the Hire-Train-Deploy (HTD) Model
The HTD model is gaining traction as a way to bridge the skill gap in smaller cities. It involves hiring based on aptitude, training candidates in job-specific skills, and deploying them into projects. More than 70% of new fresher users on Apna held formal degrees or professional certifications, aligning with the rising demand for skill-ready talent in Tier 2 and 3 cities.
This model is especially impactful in Tier 2 and 3 regions, where graduates may lack industry-readiness. Focused training, combined with mentoring and soft-skills development, enables companies to build talent where it’s needed most, closer to the source.
Collaboration Is Key: Public-Private Partnerships
Creating a sustainable ecosystem requires collaboration with:
- Colleges and Universities to modernise curricula and provide hands-on exposure
- Skill Development Centres to deliver certifications and practical training
- Government Initiatives like Skill India, PMKVY, and NCS to enable inclusive employment
- NGOs and Social Enterprises to empower underrepresented groups.
These partnerships ensure the entire talent journey from awareness to employment is supported.
Challenges to Overcome
The potential is vast, but not without hurdles:
- Infrastructure Gaps: Power supply, internet quality, and transport can lag
- Cultural Integration: Teams must be trained to collaborate across diverse geographies
- Limited Exposure: Candidates may require workplace orientation and confidence-building
These issues can be mitigated through thoughtful onboarding, local infrastructure investments, and sustained mentorship.
The Inclusion Dividend
Hiring from across India is not just about lowering costs, it’s about building resilience. It injects new perspectives, stimulates regional economies, and contributes to national development. This strategy also supports ESG goals by reducing urban migration, increasing regional equity, and enabling economic participation across demographics.
Why This Shift Makes Business Sense
- Metro Saturation
Big cities are grappling with congestion, rising costs, and infrastructure strain. Tier 2 and 3 cities offer space, affordability, and scalability. Cities like Rajkot, Indore, and Lucknow have emerged as new tech hubs, with talent from smaller cities like Warangal, Jabalpur, and Prayagraj seeing 20–50% growth in job applications, reflecting a shift in corporate hiring focus. - Existing Talent Pools
According to recent reports from NASSCOM and Deloitte, Tier 2 and Tier 3 cities currently house up to 15% of India’s tech talent pool. However, these cities are producing a significant share of the country’s graduates, about 60% of India’s overall graduates hail from smaller towns and cities, and many of these graduates either stay local or relocate to metros for employment. - Digital Enablement and Long-Term Workforce Strategy
Remote hiring and digital onboarding have removed physical barriers. Companies can now operate from virtually anywhere. This is not a short-term fix. Companies are building a layered team’s core strategy in metros and support functions in smaller cities. Over time, these feeder locations evolve into thriving hubs themselves.
Conclusion
Hiring from Tier 2 and 3 cities is not an alternative plan; it’s the future of workforce strategy in India. It opens doors, fosters inclusion, and strengthens the country’s economic fabric.
Let’s move beyond the belief that great talent only resides in big cities. True inclusion begins when opportunity meets potential regardless of pin code. By expanding their talent horizons, organizations don’t just future-proof their workforce; they help shape a more inclusive India.
