IBM plans to step up hiring from tier-II cities

IBM India will be looking to increase its headcount across business units of the company in high double-digits, and talent from tier-II cities will form a significant portion of the future workforce in the company.

Instead of hiring talent from smaller cities and placing them in offices in key metros, IBM is planning to take offices closer to where majority of the talent is. Thirukkumaran Nagarajan, vice president and head of human resources, IBM India/ South Asia told FE, “We are extending opportunities to talented people across all the cities beyond just the metros. In the early 2000s, we set up offices in big metros, but now we are expanding across tier-II cities.”

Last year, the American technology major expanded its software lab foot print with product engineering, design and software development centres in Kochi. The company had grown its BPO operations in Ahmedabad and in the suburbs of Hyderabad, and has also expanded in Mysuru, with a global delivery centre for IBM Consulting.

In 2022, the company will be expanding to Coimbatore and doubling down on its footprint in Kochi. In February, IBM acquired Microsoft Azure consultancy Neudesic, which has a significant presence in Kochi. The company also announced a new automation innovation centre in Kochi that will be housed within the software lab, and will be operational by September.

“Traditionally, at least 70% of the IT talent has never come from the big cities but every other city. So, we are now taking offices closer to the talent pools. We are expanding across the cities and will have more plans next year as well,” Nagarajan said. He said hiring will be across various business units in India.

With the pandemic raising demand for talent in new-age digital technologies, the focus at IBM is now on hiring people with the required skills and not just their academic records. “Our focus has shifted from degrees to skills. We don’t necessarily look for folks with big degrees from best colleges, which is just a good entry point. It (degree) does not define success in the IT industry in the long run. It all comes down to the skills that you have, the ability and the propensity for you to learn and the ability to handle transition,” he said. IBM is hiring what it calls ‘New Collar’ employees with diplomas as well, but Nagarajan said they are passionate and talented.

The company is scaling up its university hiring on a high priority as it helps build competitiveness, Nagarajan said. “We are investing in our early professional hires and that footprint is across the country. We have invested and trained thousands of freshers in SAP, AI, Cloud, Java, Full Stack, Data Sciences and DevOps and futuristic technologies,” he said.

However, he denied that the focus on tier-II hirings has much to do with the cost advantage that it brings along, given that living costs are significantly lower in smaller cities. “Differential in pay is not because of the city but the skills that a person has, which is defining pay competitiveness. Pay is role, skill and talent driven, and not really city,” he said.

According to a report by international property consultant, Savills India, there has been an emergence of new locations as hotspots for India’s IT-BPM sector. Cities from the south and west of India form almost 60% of this concentration with Ahmedabad, Surat, Vadodara and Nagpur drawing strength from mature IT-BPM destinations like Mumbai, Navi-Mumbai, Thane and Pune. All the southern cities benefit from the presence of Bengaluru, Hyderabad and Chennai. Smaller cities in Karnataka, Tamil Nadu, Uttar Pradesh and Madhya Pradesh have high availability of home-grown skilled talent. Moreover, with steady adoption of remote working, the talent pool in these states prefers working from urban centres closer to their hometowns.

Naveen Nandwani, managing director (commercial advisory and transactions), Savills India said, “Emerging cities are pivotal for shaping the industry in the current decade and in years beyond 2030. Factors, including ‘Work from Anywhere’, relocation of talent to their hometowns, are critical in the evolution of tier-II and III cities as supplementary ecosystems to the already established IT-BPM locations.”