11 Sep 2025

Why Tech Startups Are Hiring More in Tier-2 & Tier-3 Cities

Overview

A Big Shift in Tech Hiring

The Indian startup ecosystem is evolving rapidly, and tech hiring is no longer limited to Tier-1 cities like Bengaluru, Mumbai, or Delhi NCR.
More and more startups are now hiring talent from Tier-2 and Tier-3 cities, such as Jaipur, Coimbatore, Indore, Lucknow, and Bhubaneswar.

According to NASSCOM, 60% of new tech jobs in India by 2027 will come from Tier-2 and Tier-3 cities.
This shift is being fueled by digital adoption, remote work culture, and cost optimization, making smaller cities a goldmine for tech talent.

Why Startups Are Looking Beyond Tier-1 Cities

1. Larger Talent Pool at Lower Cost

Startups can access skilled tech professionals at 20–30% lower salaries compared to Tier-1 cities.
Lower living costs make these cities attractive for employees, reducing attrition rates.
Many fresh graduates from engineering and tech institutes are based in these regions.

Example: A software developer in Tier-2 cities like Indore or Kochi costs much less to hire than one in Bengaluru — while maintaining the same level of skill.

2. Remote Work Revolution

The rise of remote and hybrid work models post-pandemic has removed geographical barriers.

Startups can now build distributed teams without the expense of relocation.
Employees get the flexibility to work from their hometowns, improving satisfaction and productivity.

Keyword Insight: Searches for “remote tech jobs in India” have doubled in the past two years, reflecting this trend.

3. Untapped Tech Talent in Smaller Cities

India has over 400 engineering colleges spread across Tier-2 and Tier-3 cities, producing millions of graduates every year.

Many of these graduates are underutilized due to lack of local opportunities.
Startups hiring here gain access to fresh, motivated talent ready to upskill and grow.

Example: Cities like Bhubaneswar and Coimbatore are becoming tech hubs for IT services and startups.

4. Reduced Competition for Hiring

In Tier-1 cities, top tech talent often has multiple job offers, leading to high attrition and offer dropouts.

Tier-2/3 markets are less saturated, so startups can secure talent more quickly and retain them longer.

5. Government Support and Infrastructure

State governments are encouraging IT park developments, skill-building programs, and tax incentives to attract companies.

Programs like Digital India and Startup India are boosting growth in smaller cities.
Cities like Jaipur, Kochi, and Chandigarh now have co-working spaces and reliable internet infrastructure, making them startup-friendly.

Challenges Startups Face in Tier-2/3 Hiring

While opportunities are vast, there are challenges to consider:

Skill Gaps: Fresh graduates often need training in modern tech stacks like AI, cloud, and DevOps.
Awareness: Candidates may not know about niche tech roles or startup cultures.
Brand Perception: Startups must build trust and visibility to compete with larger brands.

How ATJ Helps Startups Hire Smarter

At Antal Tech Jobs (ATJ), we specialize in connecting startups with top-tier tech talent, no matter where they’re based.

Here’s how ATJ supports your hiring:

10,000+ new tech profiles added every month across India, including Tier-2 and Tier-3 locations.
A growing pool of niche tech professionals — from software developers to AI engineers.
High registration-to-application conversion rate (70%+), ensuring engaged candidates.
Free access for Antal Network partners, making hiring cost-effective.

Pro Tip for Startups: Build a strong employer brand presence on ATJ to attract motivated candidates outside Tier-1 cities.

Future Outlook: The Rise of Distributed Tech Teams

The future of tech hiring in India will be distributed and decentralized.

By 2027, half of India’s tech workforce is expected to be based in Tier-2 and Tier-3 cities.
Startups that embrace this early will have a first-mover advantage, accessing talent before competition catches up.

Insight: Companies that diversify their hiring across geographies reduce hiring costs, improve retention, and strengthen business resilience.

Conclusion

Tech startups are redefining hiring strategies by tapping into Tier-2 and Tier-3 cities.
With a vast talent pool, lower costs, and rising infrastructure, these cities are becoming the new growth engines of India’s tech industry.

Platforms like Antal Tech Jobs make this transition seamless, helping startups discover, attract, and hire niche tech talent across regions.
If you’re looking to scale your tech team, it’s time to look beyond Tier-1 and explore the untapped potential of smaller cities.