Labour Codes spur hiring in Tier-III, -IV cities; job postings rise 56%

New labour codes are driving an 8.4% rise in job postings, with tier III and IV cities seeing up to 56% growth as companies expand formal hiring beyond metros

As businesses expand beyond metros, labour codes are accelerating recruitment in smaller cities, pushing job postings in tier III and IV markets by up to 56 per cent, according to a report.

India's Labour Codes are triggering a dramatic redistribution of job opportunities across the country, with smaller cities emerging as the unexpected winners of regulatory reform, according to a report by blue and grey-collar recruitment platform WorkIndia.

It revealed that despite early fears about hiring freezes, the data found the total job postings grew by 8.4 per cent after the codes took effect.

Tier III and IV markets experienced a surge in hiring as Kolhapur witnessed 56.3 per cent growth in job postings, while Udaipur saw 55.3 per cent increase.

Goa recorded a 23.6 per cent jump, Vijayawada 20.2 per cent, Kochi 17.7 per cent, Coimbatore 14.1 per cent, and Raipur 13.9 per cent, added the report.

Collectively, the report revealed that these tier III and IV cities are growing at 12-15 per cent and above, signalling that Labour Codes are accelerating formal hiring in emerging and semi-urban regions.

The WorkIndia report is based on an analysis of data on its platform during pre-Labour Codes reforms, October 1 to November 20, 2025, compared with data during post reforms period - November 21, 2025, to January 31, 2026.

The report further stated that tier I markets aren't being left behind as they witnessed steady growth of 6.6 per cent overall, with Ahmedabad witnessing a growth of 19.2 per cent, Pune at 13.2 per cent, Mumbai at 8.8 per cent, and Kolkata at 8.9 per cent.

The data reinforces that demand remains strong across major employment hubs, even as smaller cities experience disproportionate acceleration, according to the report.

Work-from-office roles increased by 8.7 per cent, while work-from-home postings declined by 10.4 per cent, a clear shift towards on-site employment under the new regulatory framework.

This swing suggests that compliance requirements are pulling employees back to supervised, formal work environments where adherence to labour standards can be more readily monitored and enforced, it stated.

However, salary structures have remained remarkably stable with average minimum and maximum salaries showing negligible variation post-implementation, indicating that employers are absorbing compliance costs without immediate wage restructuring.

This stability suggests companies are prioritising operational adaptation over compensation adjustments in the early phase of the Labour Code rollout.

Meanwhile, gender participation saw a significant positive shift, with job postings for women increasing by 10 per cent compared to 6.3 per cent growth for men.

This gap represents the widest gender differential in hiring growth recorded in recent quarters, highlighting improved inclusivity in hiring practices after the Labour Code changes.

"The narrative that Labour Codes would kill jobs was always backwards. What kills jobs is informality, lack of structure, protection, and scalability. What we're seeing now is the opposite: an 8.4 per cent surge overall, 56 per cent in smaller cities, and women's opportunities growing faster than men's.

"Compliance isn't the enemy of hiring. It's becoming the engine of it, especially outside the metros," WorkIndia Co-founder and CEO Nilesh Dungarwal added.