Recruitment in India’s smaller cities have fallen from the previous year’s levels, as the availability of qualified talent rises in the metros, reports Live Mint, citing executives in the recruitment industry. The worst decline was seen in the IT and outsourcing, manufacturing and engineering, and consumer sectors. During the pandemic, companies hired workers to meet soaring demand, driving up salaries in big cities. This prompted many of them to turn to tier-2 and tier-3 cities for workers. Since the market has turned sluggish now, talent costs have cooled, and companies are asking staff from smaller cities to relocate to metros for the same pay.

Prasadh M.S., head of workforce research at staffing firm Xpheno, said "Active talent demand and hiring action in tier-2 and tier-3 locations have dropped 44% since January 2023. On a year-on-year basis, the drop is over 46% compared to May 2022. Also, the contribution of tier-2 and tier-3 openings to overall active jobs has dropped to 32% from previous highs of 72% in December 2020.” Xpheno's data also showed that after the pandemic outbreak, demand for tier-2 and tier-3 talent leapt far ahead of the big cities. The focus on hiring talent in tier-2 and tier-3 cities was the highest in late 2020 and early 2021.

A.R. Ramesh, director of digital business solutions, professional staffing and international engagement, Adecco said the current hiring landscape primarily focuses on replacements and specialised project-based positions and companies are now reallocating their skilled workforce and potentially relocating individuals from tier-2 and 3 cities to major metropolitan areas.

Meanwhile, Aditya Narayan Mishra, CEO of CIEL HR Services, said the April-June quarter is estimated to see a 45% drop in hiring mandates from non-metro for the firm.