Looking at the 2 years that we lost due to pandemic, remote working is the biggest legacy that is left behind by the covid-19. Remote working has caused more people to take the road back home, to a cleaner, greener, small-town India. As large service corporations go remote, a trend that has been increasing especially in the service sector, people are starting to move out of expensive matchbox-sized homes, into larger spaces in the interiors.
Although remote work is not an option for most blue-collar and manual services jobs and health, education, and retail sales jobs, remote work has been witnessing faster growth in computer-related occupations, with business, financial, and management occupations also experiencing rapid growth in teleworking.
Big Indian IT firms, which have largely been confined to Bangalore, Hyderabad, and Gurgaon, a suburb of New Delhi, are exploring the option of employing skilled workers from tier 2 and Tier 3 cities like Coimbatore, Lucknow, Bhubaneswar, Jaipur, Madurai, and Mysuru. Analysts and human resource professionals pointed out that in the next five years, close to 25-30 percent of the IT workforce could potentially work from smaller towns and cities.
Tata Consultancy Services Ltd. last month said it would invest $100 million to set up a new outsourcing facility in Indore, a city of 2 million people in central Madhya Pradesh state. Infosys Ltd. has committed $27 million for a software center in Indore and is investing a similar amount to set up a campus in Nagpur, in the western Indian state of Maharashtra. Wipro Ltd., in September, opened a software hub in Vishakhapatnam in the southern Indian state of Andhra Pradesh that will employ 2,000 people.
“What COVID-19 did was change the perception that everyone should be next to each other in an office setting,” pointed out Sunil C, head – specialized staffing, Teamlease services, a staffing firm. This change in perception could act as a catalyst for the growth of the IT sector in tier-2 and tier-3 cities, he added.
HCL is running a “comeback home” campaign, encouraging local talent to take up opportunities in their hometowns. As part of this, it had a mega recruitment drive at Vijayawada recently; another is coming up at Nagpur, where it would be creating 1000 jobs in Engineering and R&D services, Application Development, and Infrastructure Management services.
Some of India’s states, keen to entice investment into job-starved second-tier cities, are offering tax benefits, making scarce land available for projects, and ensuring power and telecom connectivity. The government of Madhya Pradesh, one of India’s poorest states, has been trying to entice IT firms to Indore for years. The city has an Indian Institute of Technology, one of the country’s top engineering schools. After repeated delays, the state recently launched a special economic zone, where the new facilities of TCS and Infosys will be situated. The state has put in place IT-friendly policies, including new rules that lift a prohibition on women working night shifts. In return, the state government is asking IT companies to recruit half their workforce locally.
The latest initiative by the Yediyurappa government — Beyond Bengaluru — which was launched in November 2020, focuses on building an innovation and technology ecosystem, stressing the need for IT companies to move out of Bengaluru. However, industry experts have called for creating better facilities outside. Industry veteran Mohandas Pai said the ‘Beyond Bengaluru’ concept is not new and earlier too, the government was pushing to take the IT industry to tier-II and tier-III cities. Just by giving tax exemptions or incentives, it will not really happen he felt.
Infrastructure issues such as connectivity could be a concern but, experts pointed out that it could be addressed if there is enough demand is created in the market for telecom players to step up the services.
However, the growing traction of Investors is reflective in the evolving FDI landscape in India. It is clear that the Tier II cities will definitely compete with the metropolises and that they are being very effectively supported by forward-looking state governments.