Talent pool, low operation cost luring IT firms to shift base to tier-2 cities

INDORE: A good ecosystem of business, talent pool and lower upfront cost in tier -2 towns have lured many information technology enabled service companies to set up base in Indore during pandemic to keep the wheels rolling.

While a few IT and ITES firms have permanently set up base in Indore during pandemic others have taken up space for 2-3 years to look into the feasibility and evaluate cost of operations.

Post pandemic that has impacted almost every sector, Indore has emerged on the top list of many companies exploring options in tier-2 cities to set up base due to smooth connectivity and reduced cost of operations


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Chinmay Shah, senior manager HR business partner at an IT firm headquartered in Pune said, “We have taken up a space in Indore two months back. Indore is an emerging city with nice infrastructure, connectivity and availability of talent pool. Getting all these facilities in a tier-2 city reduces the cost of operations and also helps in hiring talent.”

Companies said they chose the location after a survey by their sales team evaluating the overall cost of operations, infrastructure and availability of resources.

Another HR executive at an outsourcing firm that has rented a place for three years in Indore said, “We were also hit by the pandemic, especially our credit card segment. Business at other verticals was running fine but we need to reduce our cost of working in the pandemic for which we chose Indore. We have started hiring and looking to expand in phases.”

According to Madhya Pradesh State Electronics Development Corporation, five firms have taken up spaces in the electronic complex in past 6 months.

The corporation’s IT Parks and Infra general manager Dwarkesh Kumar Sarraf said, “Post pandemic and increase in remote working cultures, companies are finding it economical to start their offices from tier 2 cities like Indore. We have received many enquiries and visits from companies wishing to start operations from Indore.”

Besides companies, senior professionals have returned to their home city in past few months as location has no longer remained a priority post pandemic and cost of living is almost one-third of a metro in small towns.

Narendra Sen, operating a data center in Indore said, “Earlier people were apprehensive to relocate to tier-2 cities but post pandemic job seekers from metros are opting places like Indore in interviews. We are getting many such candidates in interviews willing to relocate to Indore in pandemic.”

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