India’s hiring landscape is moving beyond traditional metropolitan centres, with smaller cities emerging as increasingly important talent hubs, according to a report by workforce staffing and HR solutions firm Genius HRTech.

As many as 69% of organisations surveyed said their hiring from tier-II and tier-III cities had increased by more than 30% over the past two years. The trend is expected to deepen, with 55% of employers anticipating that a majority of their hiring will shift to these locations over the next three years.

The report, based on a survey of 1,729 employers across sectors in August, including BFSI, FMCG, engineering, IT, manufacturing, telecom, retail and e-commerce, points to a broader shift towards more distributed hiring strategies.

The growing confidence in smaller-city talent is also evident, with 64% of respondents saying tier-II and tier-III cities already have industry-ready talent across most functions. Cost efficiency was cited as the biggest advantage by 39% of employers, followed by stronger employee loyalty at 26% and lower attrition at 22%. Another 13% cited access to untapped talent.

Manufacturing and engineering are expected to drive much of the next phase of this expansion. About 37% of respondents expect the sectors to account for the highest hiring demand in tier-II and tier-III cities over the next two to three years, underlining the growing role of smaller centres in India’s industrial and employment expansion.

However, infrastructure and connectivity remain a major hurdle. Sixty per cent of respondents identified these as the biggest challenges to expanding hiring beyond metros.

“Tier II and III cities are no longer being viewed simply as alternatives to metros; they are increasingly becoming strategic talent markets in their own right,” Genius HRTech chairman R P Yadav said. He added that the focus would now need to shift towards strengthening infrastructure and building specialised skills to sustain the trend.