Skills mismatch, migration to metros hurting recruitments in small cities

According to the study that surveyed more than 200 human resource executives, a majority of the respondents fretted over skilled talent being in short supply. This, combined with workforce migration, made recruitment in small towns tougher.

“Limited talent pool was the single biggest challenge faced by 76% of the respondents while hiring in tier-2 and tier-3 location mainly due to migration to tier-1 cities along with skill gap, and fewer educational institutes and industries,” said the study titled Talent Insights. The report was conducted for the October-December quarter, which took responses from 1,100 job seekers as well.

Skill mismatch dilemma

In fact, even the Economic Survey for 2024-2025, tabled in Parliament last month, warned of a mismatch between the skills taught in educational institutions and the requirements of employers, leading many postgraduates to be employed in positions that do not match their qualifications. “This mismatch has resulted in over 53% of graduates and 36% of postgraduates being underemployed in roles below their educational qualifications”, the Economic Survey highlighted.

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According to the senior vice-president of a private bank, about 30-40% of the just-recruited need “major skill upliftment” and 40-45% of the employee base needs regular training and intervention. “This is resulting in suboptimal return on investment and revenue per employee is decreasing,” said the executive who did not want to be named.

Digital product engineering firm, GlobalLogic, blames it on the swift changes in technology. “Rapid changes and innovation in technology are constantly widening the gap between the desired new-age skills to the existing but fast becoming obsolete skills and tech,” pointed out Shuchita Shukla- vice president, talent transformation and acquisition, GlobalLogic.

Upskilling needs

In fact, according to the Talent Insights, blockchain, cloud computing, coding, content marketing etc. that were popular skills to have even a year ago, have dipped in demand.

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Interestingly, the skillset gap has not impacted tier 2 and 3 hiring for the firm. “For us, it is impacting tier 2 and 3 hiring quite positively as we have been recruiting in these cities because of the availability of great talent that is quite keen on being invested in,” Shukla said. But the gap is “becoming evident in the mid and senior levels – that is where the upskilling and reskilling is quite important”.

Recruiters, however, have noted that the time taken by companies in IT, IT-enabled services (ITes), manufacturing sectors to train them is about a year. “Getting talent from tier 2 and 3 is a challenge and that is one of the reasons why we see entry-level jobs at ₹3.5 lakh (per annum) in sectors like IT. They have the degree, but companies take at least a year to train them,” said Kartik Narayan, chief executive officer for staffing, TeamLease Services.

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Future trends

The IT industry, one of the biggest recruiters in India, is expected to hire more employees in the coming quarters. The study noted that the IT market will witness intense hiring for professionals specialized in artificial intelligence, cybersecurity operations, data analytics, among others. The banking and financial sector, with demand for manpower as all services go digital, has also been one of the top recruiters.

“The future of hiring lies beyond traditional talent pools. As businesses navigate an increasingly competitive landscape, those who champion skill development and embrace new hiring frontiers will lead the way in shaping tomorrow’s workforce,” Akhil Gupta, chief executive officer, Shine.com.