IT Companies betting heavily on emerging cities for Tech Talent

Two posts caught my attention this morning (1st Dec) as I was browsing through my LinkedIn feed.

Happiest Minds Technology opened a new development centre in Bhubaneswar and Persistent Systems announced a new office in Indore.

Such feeds were quite rare a few years back given that most of our IT industry is concentrated within the metro cities. But things are changing now.

Infosys is in the process of launching new centres in Vizag and Coimbatore in addition to centres in Indore and Nagpur.

Others such as Accenture, IBM, TCS, Wipro, and Tech Mahindra are either planning or have already set up new facilities in cities like Jaipur, Coimbatore, Kochi, Vizag and similar places. Zoho has announced setting up small offices in rural and non-urban areas across India.

It's been decades since the flourishing of the Indian IT Industry started, and only in recent times, we are observing such a rush by most large IT companies towards our emerging Cities and towns. There are certain changes in the patterns of what people want that have triggered this.

As you may have guessed already, Covid is a big catalyst for people's change in location preference and orientation. India's education system is blessed with more than 4000 Engineering Colleges. About 600 of them are Government Colleges and the rest are private.

More than one million engineering students graduate every year and this population is largely the target talent pool for Corporate Training programmes.

Although our population is highly concentrated around the Metro cities or the so-called "Tier-1" cities, these higher education institutions are daily distributed across the length and breadth of the country. This means that you will likely find engineers in every perceivable catchment area.

However, as the IT companies so far have been also concentrated in the metro cities for better infrastructure and facilities such as highly developed Tech Parks, SEZs, etc., people had no other option but to migrate from their native towns.

However, there are distinctly different phenomena that have changed this equation. Economic prosperity across many business domains through the last few years has opened up many opportunities, and Covid has sent the Engineers back to their native places for a considerable duration of time. The preference since changed to remain back home, closer to folks, and parents, have all the support system to you and family, and also enjoy a lower cost of living, cleaner air, and relaxed atmosphere rather than the hustle of the crowded cities and so on. Companies now literally have to provide a very good "why" along with their plight to the employees to come back to their base locations in metros.

This change has silently but significantly started impacting IT businesses. Hence, the sense that has started prevailing is that rather than calling you back to the base station, let us open offices in emerging cities and towns so as to provide employees from these areas the option to stay at or close to home. Just as companies are switching to Hire Train Deploy methods to not miss out on a potential talent, they are also making sure that location doesn't become a hindrance for them.

Given this, location strategies will evolve and will see significant diversification in the next few years to come. All of it has compounding effects as well. As emerging cities come to the limelight, people will have more options, and infra and facilities in these places will get better and better. Given the extreme population concentration in metros like Bangalore and the increasing difficulty of these places to accommodate any more population swell, this is a good chance that is happening.

However, there are distinctly different phenomena that have changed this equation. Economic prosperity across many business domains through the last few years has opened up many opportunities, and Covid has sent the Engineers back to their native places for a considerable duration of time. The preference since changed to remain back home, closer to folks, and parents, have all the support system to you and family, and also enjoy a lower cost of living, cleaner air, and relaxed atmosphere rather than the hustle of the crowded cities and so on. Companies now literally have to provide a very good "why" along with their plight to the employees to come back to their base locations in metros.