Infosys, TCS, Accenture: WFH culture forcing IT companies to enter Tier II, Tier III cities

After decades of operating from India's tier I cities like Bengaluru, Mumbai and Delhi, major IT companies are now beginning to foray into tier II and tier III cities in the country. A recent example of this trend has been Infosys’ new office in Yelahanka, Karnataka. The campus commenced operations on Monday, and employees were notified of the new arrangement in an email from the human resources department.

In an internal communication addressed to employees, the company noted that the new facility will aid the company's hybrid work model. The message read, "We are excited to announce the launch of our new North Gate facility in north Bengaluru to further promote flexibility and encourage you to work in hybrid mode and closer to your homes."

As part of its efforts to accelerate the implementation of its hybrid work strategy, Infosys has also established offices in tier II cities like Visakhapatnam and Coimbatore, aiming to tap into the talent pool present in those regions.

Furthermore, not just Infosys, other IT majors are also opening facilities in tier-II and tier-III cities to help employees work closer to their homes. IT major Accenture, which traditionally operated in India's metros till now, established offices in Jaipur and Coimbatore a few months ago, enabling access to a wider talent pool and providing employees with greater flexibility in choosing their work location.

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IT company IBM has started opening up centers in tier II and tier III cities, Sandeep Patel, MD India- South Asia, told Business Today in an interview earlier this year.

He said, "I like to call them emerging regions and not tier II/ tier III cities. They have an advantage in the sense that we can access the local talent pool, we can also set up training centers for the talent there and then onboard them into the larger organization."

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Persistent Systems, another Indian IT company, has also embraced this model to attract employees to the office. It has opened up centers in Goa and Nagpur. TCS has offices in tier II cities across India, like Bhubaneswar, Kochi, Thiruvananthapuram, Nagpur, Indore, Varanasi, Gandhinagar, among others.

Aditya Narayan Mishra, MD of CIEL HR, told Business Today that IT companies are making such arrangement to bring employees back to office.

“Following the trend of remote work during the pandemic, many employees have relocated to their hometowns. As organisations transition to a hybrid work model, some employees are hesitant to move back to cities and are open to other opportunities that provide flexibility, resulting in increased attrition,” Mishra highlighted.

Major IT players have been pushing employees to work from offices. Recently, both Tata Consultancy Services (TCS) and Infosys, have sent intimation to employees via email to start working from offices. Other Indian IT companies, such as HCL Tech and Wipro, have also been steering employees towards a hybrid working model.

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Sumit Sabharwal, CEO of Teamlease HRtech noted that the new trend of setting up offices in tier II, III cities is also facilitated by improved internet penetration and infrastructure.

Sabharwal highlighted, “Moving to tier 2 and tier 3 cities makes better business sense when compared to a few decades ago. Internet penetration, education, infrastructure, supply chains, transportation, logistics, everything has improved by leaps and bounds. Tier II and tier III cities are now offering more scalability to businesses, resulting in increased interest from businesses.”

Apart from the accessibility to infrastructure, CIEL’s Mishra notes that real estate and maintenance costs are also lower in tier two and tier three cities, making them more attractive for major IT players.

“Opening office spaces in tier two and tier three cities can reduce attrition, lower real estate costs, and create holistic socio-economic development. It also provides companies access to diverse talent at a lower cost,” Mishra highlighted.

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