Why is it harder to find jobs in India's metro cities than in small towns

Smaller towns and cities in India are seeing a thriving demand for manpower, while job creation is still sluggish in the metro areas

The employment gap between India's big cities and small communities is growing, reported the Economic Times (ET).

According to staffing companies like Teamlease Services, Xpheno, and Foundit, job creation is still sluggish in the metro areas as companies remain cautious due to macroeconomic and geopolitical headwinds. In contrast, smaller towns and cities are seeing a thriving demand for manpower as many companies increase their presence to meet rising consumer demand.

Data from Teamlease Services shows that in the September quarter, hiring for entry-level white-collar and blue-collar jobs across the manufacturing, banking, financial services and insurance (BFSI), telecom, e-commerce increased by 17 per cent Year-on-Year (YoY) in tier-2 and tier-3 towns like Rajpura, Kushaiguda, Hosur, Ludhiana, Jodhpur, Jabalpur, Kalwara, and Zirakpur. This is in contrast to a five per cent decrease in similar jobs in metropolitan cities.

Data from Xpheno shows a similar trend- a near twofold jump in entry-level white-collar jobs in small towns in October compared with a year before.

The trend is being driven by a number of factors, including the expansion of banks and financial services companies into previously unbanked areas, the rise in e-commerce and retail sales, and the demand for frontline workers in manufacturing sectors like smartphones, electronics, and autos, executives at staffing firms told ET.

Kartik Narayan, chief executive of staffing at TeamLease Services, stated that several companies have been looking to expand beyond the metros, which leads to a rise in demand for talent. However, he said that talent is in short supply.

"In BFSI, there is a huge push for personal loan, home loan, credit card sales," said Narayan, adding, "The market is growing for e-commerce and retail companies as well, while phone, electronics, auto and large contract manufacturers need more people to scale up production," he was quoted as saying by ET.

Co-founder of Xpheno Anil Ethanur agreed, saying, "Companies in fintech, the non-banking financial institution [NBFC], ministry of micro, small and medium enterprises [MSME], e-commerce, and retail are looking to increase footprint in tier 2 and 3 cities even as hiring in megacities and especially in the technology and startup sectors - the largest employment generators - continue to be muted."

Co-founder of Xpheno Anil Ethanur agreed, saying, "Companies in fintech, the non-banking financial institution [NBFC], ministry of micro, small and medium enterprises [MSME], e-commerce, and retail are looking to increase their footprint in tier 2 and 3 cities. Although hiring in metro cities and especially in the technology and startup sectors continues to be muted."