Shekhar Iyer has been working for an IT giant in Bangalore for seven years, climbing the organizational hierarchy like every other peak performer. Today, he has been offered a role at the companys new Coimbatore set-up, an opportunity that Shekhar had always wanted. And why not, Coimbatore is his hometown, where he spent his childhood, completed his education, and even began his career. It could be that career-making move for him, but something is holding him back. He realises that fifteen years of Bangalore life has changed him and now he has doubts: Will Coimbatore give him and his family the exposure and best-in-class services that they are accustomed to? It is a gamble for Shekhar, and he reluctantly takes it up.

On moving to his hometown, he is surprised at how drastically it had changed in terms of education, living standards, and job opportunities. But the icing on the cake was the work-life balance he was able to strike, and which he realized was missing in his life in the metro.

The story is similar for thousands of other IT professionals who are gradually migrating to tier-2 cities in search of better career opportunities, and to escape the chaotic life of the tier-1 cities. But in the IT industry, this transition is only recent. The percentage of employees that companies attract from metros to tier-2 locations such as Indore, Coimbatore, Bhubaneshwar, etc, is still very small. Hence, companies are facing a severe shortage of middle management or experienced talent to head operations in new tier-2 set-ups. While on one hand there is no dearth of local talent in the upcoming tier-2 cities in India, due to the large number of educational institutions and the strengthening industry-academia collaborations, there still exist gaping holes in the middle management level.

Inherent Features
Talent in smaller cities in India are governed greatly by cultural paradigms. Things taken for granted by the working class in the metro are greatly valued by those in tier-2 cities. The brand value of a company that an employee works for is directly associated with respect, career growth, and overall standing in society. MphasiS, which has a presence in tier-2 cities like Indore, Mangalore, Ahmedabad, and Puducherry has experienced similar trends. A good physical office environment, which is taken for granted in the metros, mean a lot to employees in smaller cities. We get a lot of requests from parents, siblings, and sometimes friends who want to visit and take a look at our office building, says Narayan Nair, head, HR, MphasiS.

CSC is another large IT giant and one of the first companies to enter a tier-2 city like Indore, in 1996. Local talent was relatively low on employability standards, and hence, CSC had to invest a lot in training and other soft skills enhancements. Anuj Kumar, associate director, HR CSC India says there are a lot of challenges in terms of meeting the needs of employees apart from providing them with the required training. And we have to create additional avenues of professional growth in terms of out-location training and encouragement to join and participate in activities of professional bodies. Recreational activities such as creating a family club or other recreational avenues available in any tier-1 citiy also matters a great deal and helps in building a close-knit employee community.

Satyam, which has presence in a large number of tier-2 cities has also witnessed a unique set of needs in tier-2 locales. Rajan Kanagasabai, head, HR Sourcing, says, Employees from tier-2 locations are very sensitive about the brand and the standing of the company they work for. It certainly determines their social standing. They are emotionally attached to their workplace and dont believe in job-hopping, which is a common feature in tier-1 cities. This automatically makes attrition levels low.

While companies such as CSC, MphasiS and Satyam have experienced certain differences in the expectations of employees in tier-2 locations, Infosys and Collabera feel that the expectations and needs of employees remain the same. We havent experienced a difference in the expectations. Considering that we hire primarily from campuses, all the colleges we visit have a diversity of students from various parts of the country which helps in doing away with any kind of mismatch in expectations, says Nandita Gurjar, VP and group head, HRD, Infosys Technologies.

Sharing similar experiences is Collabera, which has development centers in Baroda and Thiruvananthapuram. Mohan Sekhar, president and COO, Collabera says, I havent seen a big difference between the mix of locals and migrants. Expectations of these employees pretty much remain the same, be it local, urban, or migrant. Most employees expectations revolve around opportunities to grow in an organization, challenging and rewarding work opportunities, pay that is on par with industry standards, etc.

Hiring and Retention
Hiring the right talent is another important task for companies while operating out of tier-2 locations. According to Nair, hiring techniques dont differ very much from the metros but word-of-mouth has been the most important source of publicity for MphasiS so far. Talking about the mix of local and external talent Nair says, Most of the talent employed is local. Sometimes senior managers may move from a metro to a tier-2 location as a career progression. Many managers are opting for this and find the move beneficial and suited to their needs as well as that of their family. As a part of building a good middle management layer, MphasiS has incentivized experienced employees and encouraged them to move to the new and smaller centers for better designations and larger roles.

Hiring techniques at the entry level are not different at Collabera. High-quality entry-level talent is readily available, but the challenge lies in attracting mid-level talent. When it comes to lateral hiring, employee referrals help us in getting the right talent, says Sekhar. At entry level, the ratio between local verses external talent recruited is almost 90:10, and at mid-level the ratio is 70:30. Also, to tackle the middle management crisis, Collabera has a special recruitment initiative called back-to-home, where the company targets specific people who are outside their hometown and are willing to migrate back for their career. Sekhar says that in the IT sector most companies have the same pay scales, whether it is tier-1 or tier-2 cities. However, in the BPO industry, salaries in tier-2 cities are lower than tier-1 cities.

Girish Babu, former CEO of Technopark, Kochi, is of the opinion that with cities such as Bangalore having reached a point of saturation, other tier-2 cities in the south such as Kochi, Thiruvananthapuram, and Trichur are gaining importance. An increasing number of companies are setting up base in Kochi and other parts of Kerala he says. He further adds that companies entering Kochi and Thiruvananthapuram are trying to attract people from all over India and abroad who want to move back to their homeland. The attrition rate is also extremely lowjust about 1.5% in and around Kochi. He attributes this to the tendency among people there to be emotionally attached to their workplace and a general aversion to changing jobs. Attrition rates have been good so far. But going forward I see a tendency of attrition going up because BPOs here are paying lower salaries compared to the tier-1 cities, Babu explains.

Infosys has been an exception when it comes to middle management issues or even attrition rates in tier-2 locations. The hiring channels used by Infosys to tap the talent are similar in all cities. Also, one of the primary reasons for attrition at Infosys is due to employees proceeding for higher studies.

Training Needs
Ample talent is available in non-metros judging by the number of graduates in both technical and non-technical streams. The challenge is to educate them about the opportunity of working in the industry. MphasiS has observed that in smaller cities, there are stereotypes associated with the BPO industry. So, it is investing heavily on training and developing raw talent.

Satyam, on the other hand, is investing largely in soft skills training, as it believes that there are certain socio-cultural differences between tier-2 and tier-1 employees. Kanagasabai also shares a very interesting point: We have observed that talent from tier-2 locations are very strong when it comes to core skills and fundamental knowledge, but they lack in soft skills. On the other hand, talent from tier-1 locations are stronger in soft skills and they aspire for managerial roles due to the immense exposure they receive. Hence, people from tier-2 locations are more interested in building a specialized career and develop certain key expertise within their field of interest.

Going forward, all large IT companies foresee tier-2 locations playing a key role in their business operations and outlook. While they not only serve as a low-cost destination, they also have the capability to meet the manpower needs of these companies. Tier-2 cities will play a larger role in keeping the companies afloat as tier-1 cities are becoming prohibitively expensive in terms of overheads. Besides, attrition is higher and with it the consequent costs. Keeping these factors in mind many companies are planning to expand further into tier-2 locations.

Priya Kekre
priyak@cybermedia.co.in

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