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Post pandemic, employees reluctant to return, firms take offices to small towns

The IT and software services sector, which is among the top organised sector employers, is seeing companies expanding to some of the smaller towns and cities that are emerging as “talent hubs”, looking beyond the traditional campus centres like Bengaluru, Hyderabad, Pune and Gurgaon.

Global professional services firm Accenture, which has over 3 lakh employees in India, is also looking in the same direction. (Suvajit Dey)

For a chartered accountant from Bharuch or a technology consultant from Ajmer, a post-pandemic move back to the metropolitan cities where their employers have traditionally had offices may not now be necessary.

Service sector companies, including the Big Four audit majors and technology companies, are making a transition to tier-2 cities and setting up offices at smaller locations to be closer to their employees instead of favouring geographical proximity to clients, in what is being seen as a renewed thrust on developing hub-and-spoke office networks.

This is particularly true for skilled professional workers such as chartered accountants, who comprise roughly 30-40 per cent of the workforce of some the Big Four (Deloitte, PwC, KPMG and Ernst & Young) audit companies, and predominantly come from a small number of states such as Gujarat, Rajasthan and Tamil Nadu. With these employees preferring to work from closer to their hometowns in smaller locations such as Jaipur, Ahmedabad, Coimbatore, Bhubaneswar, and so on, companies are transitioning to setting up new workplaces in these towns to cater to an increasingly popular post-pandemic trend.

The IT and software services sector, which is among the top organised sector employers, is seeing companies expanding to some of the smaller towns and cities that are emerging as “talent hubs”, looking beyond the traditional campus centres like Bengaluru, Hyderabad, Pune and Gurgaon.

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Deloitte India is learnt to have opened new offices in Jaipur and Coimbatore since the pandemic to cater to employees who had earlier worked out of Mumbai or Chennai, with a new office expected in Noida in addition to its hub at Gurgaon. PwC has opened up new workplaces in Bhubaneswar and Jaipur this year and plans to expand in Noida and Thane in due course. Accenture has set up centres in three new locations in India — Jaipur, Indore and Coimbatore. India’s largest software company, Tata Consultancy Services, is looking to expand its presence into regions such as Guwahati and Goa even as Infosys, which had set up offices in Indore and Nagpur, is now planning to expand to Noida, Visakhapatnam, Coimbatore and Kolkata. Tech Mahindra is also setting up physical centres in smaller or non-traditional hubs, including Coimbatore, Visakhapatnam, Nagpur, Bhubaneswar, Chandigarh, Kolkata, Indore and Vijayawada.

A senior executive with one of the Big Four companies said: “Most of the educated workforce here is either from Rajasthan or Gujarat, so they all went back during Covid. Now, with a hybrid working system in place, when they were asked to return to office once or twice a week, they refused. Most of them, in their mid-20s to mid-30s, are from smaller towns such as Ajmer, Bikaner and Jaisalmer in Rajasthan or Bharuch and Jamnagar in Gujarat, and they don’t want to return to Mumbai to work. We cannot ask them to resign because the person sitting in Bharuch is a CA, has technical skills and good conversational English. When I am trying to recruit a person in Mumbai as a replacement, we find it tough to find employable people. A CA from a fresh batch cited that he knows good Kutchi (language), but people with good English drafting skills are a prerequisite and that’s why decisions were taken to open offices closer to their hometowns.”

Another feature of this trend is that companies have had to opt for contractual workers to get some specific tasks completed in offices in metropolitan cities, with existing employees continuing to work closer to their home base. “Roughly 30-40 per cent of our employees come from smaller cities. Many have refused to return to office, saying they are continuing to work as per the requirements by the company. For some work, such as the filing of tax returns, we hired contractual workers who would come in for three-four months and do the work and then leave. The permanent pool of workforce is being retained by opting to open up offices in tier 2 and 3 cities,” the executive said.

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Deloitte India said it is planning to expand more in non-metropolitan cities.

“We have had offices in non-metros even before the pandemic and are planning to expand into more soon. India is brimming with talent and that’s not limited to the metros. With growing demand for specific skills and the opportunities of hybrid working, organisations are better equipped to welcome this talent pool and give them the flexibility to continue to stay closer to home while fulfilling their professional ambitions,” said S V Nathan, partner and chief talent officer, Deloitte India.

PwC has opened up workplaces in Bhubaneswar and Jaipur this year, and plans to expand in Noida and Thane going ahead. “Our talent pool is no longer centred in metro cities, and we are looking to leverage the wealth of skilled professionals in other cities too,” said Sanjeev Krishan, chairman, PwC in India.

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In the IT sector, this move is also aimed at arresting the high attrition rate in the industry, especially after a large number of employees returned to their hometowns during the pandemic and attempts by companies to bring them back were leading to many putting in their papers.

Tech Mahindra is also setting up physical centres in smaller cities, including Coimbatore, Thiruvananthapuram, Visakhapatnam, Nagpur, Bhubaneswar, Chandigarh, Kolkata, Indore and Vijayawada. “At Tech Mahindra, we believe that tier-2 and tier-3 cities are emerging as future talent hubs that could propel the next stage of growth. We are hiring talent from new areas…to diversify talent, and are also leveraging the gig workforce as talent can be found anywhere. New positions are filled based on best-fit talent to deliver outcomes without any location constraints,” the company’s global chief people officer and head of marketing, Harshvendra Soin, told The Indian Express.

Global professional services firm Accenture, which has over 3 lakh employees in India, is also looking in the same direction. “We have recently set up our Advanced Technology Centres in India (ATCI) in three new locations — Jaipur, Indore and Coimbatore — and an Intelligent Operations Centre in Jaipur to expand our global delivery and innovation network. These locations offer our people greater flexibility to choose where they want to work from,” said Lakshmi C, managing director and lead of human resources, Accenture in India.

“In addition, as emerging talent hubs and homes to reputable educational institutions, these locations are helping us strengthen and grow our diverse talent base in India even as our presence unlocks new avenues for local talent,” she added.

For the first quarter of the ongoing financial year, IT and software services companies continued to report high attrition rates, but noted that these rates have now peaked and are expected to cool down in the coming quarters. While Bengaluru-headquartered Infosys reported 28.4 per cent attrition rate, Noida’s HCL Technologies reported 23.8 per cent, Mindtree saw 24.5 per cent, Wipro reported 23.3 per cent and TCS reported 19.7 per cent.

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In response to an email query, Wipro said: “Over the course of the pandemic, employee expectations have re-formed. Workforces over a span of just three years are moving toward boundaryless careers, and employees can work from anywhere. This emerging development, coupled with remote working and the growth of digital transformation outpacing the supply of adequately skilled tech talent, is leading to a change in company culture.”

“Employees today want to build connectedness within teams and with the larger organisation in a social manner and not necessarily a formal setting. In addition, employees want companies to be the drivers of work-life balance, establish collaborative hybrid work environments, enable faster development opportunities, offer flexible work support, and account for mental health and wellness. With all these factors in consideration, hybrid working will remain the mainstay for Wipro,” the company added.

First published on: 09-08-2022 at 04:55:20 am
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