Beyond the Metros: How Tier-II Talent is Powering India’s New Growth Hubs

“If you’re only hiring from metros, you’re missing the bigger picture – Tier-II cities and its talent.” That’s the quiet truth echoing across boardrooms – and it’s getting louder.

For decades, India’s talent narrative has centered around its Tier-I cities: Bengaluru, Hyderabad, Pune. These metros have long powered India’s emergence as the “GCC Capital of the World”. But a subtler, more transformational shift is underway – beyond the metro skylines, deep in the heart of Tier-II cities.

Ahmedabad. Coimbatore. Kochi. Thiruvananthapuram. Vadodara. Kolkata. Once seen as affordable extensions to their Tier-I counterparts, these cities are quickly becoming strategic talent hubs in their own right – not with noise, but with numbers, momentum, and impact.

A Shift That’s Been a Long Time Coming

India is home to over 1,700 Global Capability Centers (GCCs), yet just 7% of them operate in Tier-II cities – a gap forward-looking enterprises are beginning to close. Companies like Diageo, Calsoft, Flex, and Kraft Heinz are actively turning to these rising tech corridors, attracted by a blend of skilled talent, improving infrastructure, and government-backed momentum.

In many ways, the pandemic was the tipping point. Remote work disproved long-standing assumptions – that talent must migrate to metros, that only Tier-I cities have reliable infrastructure. Professionals returned home, stayed productive, and discovered better mental health, output, and quality of life.

That one-time adjustment has evolved into a permanent mindset shift: because if 60% of India’s graduate population resides outside the metros, then logic and economics suggest it’s time to meet them where they are.

The Demographic Dividend, Rebalanced

India’s Tier-II cities are young, educated, and ambitious. These emerging hubs produce thousands of STEM graduates annually and are developing specialized talent clusters in areas like ER&D and IT-BPM.

According to the Zinnov-nasscom India GCC 5-Year Landscape Report 2024, digitally skilled talent in Tier-II cities has grown by over 25% in just the last two years.

Even more compelling? Retention. While attrition in Tier-I cities hovers around 15.2%, Tier-II cities report 20–30% lower churn. Stronger roots, reduced migration fatigue, and better work-life balance are turning these locations into stable, long-term talent engines.

From an operational lens, companies can save up to 25% on total employment costs by setting up in Tier-II cities – thanks to lower real estate prices, reduced overheads, and sustainable compensation expectations.

A Policy Tailwind That Can’t Be Ignored

India’s shift toward Tier-II city development isn’t driven by business alone. Policy has joined the push.

The 2025 Union Budget laid out a national framework to expand the GCC footprint beyond Tier-I cities, focusing not just on geographic redistribution, but on building a resilient, future-ready economy.

Policy support is now directed at four pillars:

• Infrastructure development
• Regulatory easing
• Financial incentives
• Talent ecosystem growth

From Warangal in Telangana to Bhubaneswar in Odisha, and GIFT City in Gujarat to the Silicon Valley Hub in Kolkata – state governments are translating intent into infrastructure. Pre-approved clearances, capital subsidies, and industry-academia initiatives are fast-tracking the rise of new business nodes.

What Sets Tier-II Talent Apart

The data suggests:

• Tier-II cities house nearly 800,000 digitally skilled professionals, ready to be tapped by the global tech ecosystem.
• Employee retention is significantly higher, with companies reporting attrition rates up to 30% lower than metro-based centres.
• Quality of life indicators – housing, commute times, and environmental conditions – are consistently better in these cities, improving morale and productivity.
• Operating in Tier-II locations reduces total cost of ownership by 25-30%, without compromising talent quality or infrastructure reliability.

The Real Question Isn’t “Why Now?” – It’s “Why Not Already?”

While Tier-I cities will remain as core innovation hubs, they’re beginning to show signs of strain – from rising costs and infrastructure pressure to talent saturation that’s prompting companies to rethink their expansion strategies. Office vacancy rates in Bengaluru and Pune have risen, traffic congestion is worsening, and real estate costs are escalating fast. The demand-supply mismatch in talent has led to wage inflation, while infrastructure lags demand.

Metros have played their part and will continue to. But as companies look to scale with stability, they’re no longer asking where the talent is. They’re asking where it’s ready to stay, grow, and build. That shift is expanding the map. For a growing number of companies, Tier-II cities are fast becoming the first choice – not the fallback.

Looking Ahead: India’s Talent Strategy Needs a Reboot

If India is to realize its USD 7 Tn economy ambition by 2030, the next wave of growth must be inclusive, distributed, and deeply rooted in its Tier-II talent ecosystem.

The foundation is already laid. The talent is available. The policy is aligned.

Now, all it takes is vision – and the willingness to look beyond the familiar.