It is no secret that talent has been migrating to cities with lower living costs and better quality of life since the beginning of the previous decade. In a sense, the signs of this ‘reverse’ talent migration have been visible for a while, but enterprises have chosen to ignore it. However, the pandemic and the talent migration it has catalyzed has forced workforce planners to consider and prepare for the effects of ‘reverse’ talent migration.
But is it just the cost of living & work-life balance driving this change? It does indeed seem like that on the surface. The 2008 recession dealt a huge dent to several aspirations, forcing people to move back into tier2/3 cities to make better financial sense. This event tracks well with what we’ve seen so far.
However, our research indicates a growth in talent availability in tier 2/ tier 3 locations and the rapid improvements in infrastructure to be a significant factor promoting talent migration as well.
This topic deserves a deep dive, especially in the context of Covid, and how it may have unwittingly prompted talent stakeholders to sit up and take notice of the talent flux.
Is COVID the only factor behind the talent migration?
During the beginning of the pandemic, entire industries were thrown into disarray by the imposition of nationwide lockdowns with little warning. However, a significant portion of the IT workforce still managed to make it to their native locations and opted to work remotely from there within the comforts of all that is familiar.
At that time, this was seen only as a temporary measure. But as we complete more than a year in lockdown in several parts of the globe, many employees now realize that working from home — here home being their Tier2 or Tier3 cities — does not really put them at a disadvantage.
This has led to a sort of remote work revolution in many parts of the world. After all, if you can do your work just as well, or even better from your bedroom, why then must you be forced to endure long commutes and unsafe work environments?
While COVID-19 did indeed start the latest round of conversation around talent migration, it is now being fueled by the quest for employees to attain work-life balance.
But that is only one part of the coin.
The other part is that talent acquisition teams finally realize the huge potential of untapped talent in tier2/tier3 cities.
There is a plethora of talent in cities traditionally not considered as hotbeds of IT talent. Tier-2 and Tier-3 locations are experiencing high tech talent growth in the US due to expanding footprint by Tech giants, startups, and other Fortune 500 companies.
Draup’s research shows the inbound migration of tech talent to tier2/3 locations such as Baltimore, San Diego, & Charlotte increased by an average of 3.5%, while the outbound migration rate rose slightly to ~0.9% in areas such as Bay Area, Dallas & New York.
Meaning, there is a measurable flow of talent from Tier 1 to Tier 2/3 cities.
Excluding Covid, we have found that the top three reasons for IT talent migrations were:
- Better pay scale (all this means is a lower cost of living)
- Quality of Life
- Availability of numerous work from home(WFH) jobs
WFH is furthering talent migration trends
Unfortunately, WFH is one aspect of talent migration that gets lost in the chaos but turns out to be a cornerstone that is fueling the movement.
As remote working becomes a reality for more job roles, HR teams are finding it really hard to attract top talent.
In a user-posted poll on Blind, an anonymous network for professionals, 1 in 3 employees remarked that they would quit if WFH ends.
Apple’s employees, too, are part of this bandwagon. In an internal letter, staff members say they want a flexible approach where those who want to work remotely can do so.
“That Apple’s remote/location-flexible work policy, and the communication around it, have already forced some of our colleagues to quit. Without the inclusivity that flexibility brings, many of us feel we have to choose between either a combination of our families, our well-being, and being empowered to do our best work, or being a part of Apple,” reads a section in the letter.
As of writing this article, Apple has not responded to this letter. However, it is quite evident where the employee mentality is shifting.
Naturally, even if Apple relents, this is a very unfavorable scenario for other IT companies. Especially startups who are still in the initial stages and count on in-office collaboration a lot.
In other words, the allure of work-from-home is proving to be another major catalyst to the talent migration equation.
But what impact does this migration phenomenon have on the global workforce?
Impact of talent migration on the talent acquisition and how to protect yourself
Now that talent migration has blossomed into a whole new dimension that deserves its own case studies, HR teams are beginning to take note of the impact it has on the enterprise.
The biggest impact talent migration has is that good talent is becoming increasingly harder to find.
With the plethora of WFH and remote jobs on the offering, even new graduates are spoilt for choice. This is evident in the shockingly high attrition rates of IT majors like Infosys and Tech Mahindra and the measure they are taking to stop this talent outflow.
However, there is another way to circumvent the talent gap caused by talent migration activities.
The solution is to significantly ramp up hiring from hitherto unconventional talent sources. This one strategy is crucial for building long-term workforce sustainability when combined with reskilling.
This trend is already seen in countries like India, where cities like Pune and super micro hubs like Vadodara and Coimbatore are gaining momentum. Similar trends in the UK like a movement towards Birmingham, Bristol, Manchester, Belfast are a possibility. So is a movement away from Shanghai to places like Suzhou.
To extract more value from these emerging talent hubs, talent management teams need to leverage the capabilities of AI-powered talent intelligence tools like Draup to:
- Correctly estimate the cost of talent acquisition
- Derive location intelligence data for a location that include data on the type of talent available, the quality, the quantity, and the university ecosystem
- Identify emerging talent hotspots in tier2/tier3 locations and focus their hiring efforts in these locations
Of the above, identifying emerging talent hotspots take the cake in terms of critical talent acquisition imperatives.
Draup looks at each potential talent hotspot based on talent maturity and talent cost, thus allowing talent acquisition teams to hit the sweet spot on every hire. In addition to this, Draup evaluates candidate profiles with metrics that go beyond univariate parameters to provide talent managers with data related to:
- Technology skills
- Soft skills
- Adjacent skills & reskilling strategies
- Talent supply-demand gap analysis
- Top employers for a location
- Diversity metrics
- The adjacent talent pool for job roles of interest
By leveraging the above mission-critical data, talent stakeholders can protect their workforce from any potential long/short term impact of talent migration.