Tier 2 locations are becoming increasingly valuable centers for building technology teams, offering diverse talent pools and cost advantages.
Tier 2 locations are emerging as valuable hubs for building successful technology teams.
These cities are experiencing substantial growth and are attractive destinations for organizations seeking to capitalize on skills and diverse talent pools.
While Tier 1 cities remain important tech hubs, Tier 2 locations offer unique workforce planning advantages such as affordable talent and favorable business environments.
Austin, Texas; Pune, India; and Kraków, Poland are examples of successful Tier 2 locations.
Advantages of Leveraging Skills Abundance in Tier 2 Locations
Let us look at some principal benefits tier-2 locations can provide workforce planning teams:
1. Advantages in terms of cost: The low cost of living in tier 2 locations reduces the cost of hiring employees and operational expenses.
Businesses can redirect these savings to other investments, such as R&D, employee benefits, or providing a market advantage.
2. Access to a diverse talent pool: Tier 2 locations are a draw for professionals who studied and gained experience in bigger cities but decided to return.
As a result, the workforce has diverse perspectives, creativity, and problem-solving skills. Access to a diverse talent pool can boost innovation and produce better answers to technological problems.
3. Reduced competition and supportive environment: Tier 2 locations offer a less saturated talent landscape than Tier 1 cities with large tech companies and fierce talent competition.
Businesses in these regions can attract top-tier talent by providing opportunities for growth and career advancement.
This decreased competition enables businesses to acquire high-quality talent without engaging in bidding wars or compromising on quality.
Local governments may offer incentives such as tax breaks, infrastructure development, and streamlined regulations to attract businesses and investment to Tier 2 locations.
This thriving business environment can foster a thriving and expanding business ecosystem.
4. Diversification and regional presence: Establishing a presence in Tier 2 allows businesses to diversify their operations geographically.
This can buffer against regional economic fluctuations and lessen reliance on a single market.
In addition, it allows businesses to serve regional customers better and gain a greater understanding of local markets.
5. Lower operational risks and increased employee satisfaction: Typically, smaller cities have better infrastructure planning and are less susceptible to natural disasters, making them more resilient and offering a higher quality of life than crowded urban centers.
A lower cost of living, shorter commute times, proximity to nature, and a strong sense of community can all contribute to greater employee satisfaction, increasing employee retention, productivity, and company morale.
However, tier 2 locations have limited infrastructure, low visibility, and the potential difficulty of locating specialized skill sets.
However, with proper planning, these benefits can outweigh the disadvantages and contribute to the long-term success of an organization.
Strategies to Build Tier-2 Tech Teams
Workforce planning teams must take note of these strategies to build effective technology teams in Tier 2 locations.
1. The right location and collaboration with local educational institutions
Workforce planning must include extensive research to identify Tier 2 locations with a large tech talent pool.
Consider areas with reputable educational institutions, tech-focused communities, a business-friendly environment, cost of living, infrastructure, connectivity, and quality of life.
With AI-based talent intelligence, workforce planning teams can find new tier-2 frontiers and create targeted recruiting campaigns to draw talent from these locations.
Partnering with universities and colleges in Tier 2 locations can assist organizations in developing a pipeline of skilled talent.
Organizations can bridge the gap between academia and industry by establishing internships, co-op programs, and other initiatives.
These partnerships provide students with practical experience and allow companies to identify and cultivate talented individuals.
Pittsburgh recently experienced this. Uber, Ford, and Delphi moved to the city to recruit Carnegie Mellon and University of Pittsburgh graduates for their autonomous driving projects.
Workforce planning teams could bring the office to the talent. Some companies have satellite offices or centers of excellence near talent hubs.
2. A strong employer brand and flexibility for workers
Developing a positive employer brand is essential to attract and retain talent in Tier 2 locations.
Competitive compensation, flexibility, development opportunities, and supportive culture can bolster workforce planning activities and foster loyalty and dedication.
Flexibility allows workforce planning teams to access talent in Tier 2 locations and expand their talent pool beyond geographical boundaries.
This strategy has increased productivity, enhanced work-life balance, and decreased overheads.
3. Competitive benefits and investment in upskilling/reskilling
Tier 2 locations may have skilled labor but need upskilling to meet specific technological demands.
Workforce planning could involve investing in training programs, workshops, and certifications to enhance your team members’ abilities.
With the ‘ Recruit to Reskill ‘ strategy, companies can save up to US$ 20K for Cloud Engineer roles. Additionally, companies can set up small centers in tier 2/3 locations to realize cost savings at scale. Here are two examples:
- Amazon’s Houston AWS re/Start program provides free cloud computing skills training.
- Microsoft opened its first cloud-based Microsoft Technology Center in Houston with a small data center to showcase MS Azure and innovative technologies.
Workforce planning teams can use skilled people in Non-Tier 1 and then reskill these people for roles with in-demand skills.
Draup analyzed sample roles such as ‘Cloud Engineer.’
After hiring for roles such as Storage Engineer, workforce planning can provide opportunities to reskill for the Cloud Engineer role. With targeted modules, the transition can be achieved in four months.
The above infographic shows the skills required for Cloud Engineer. Similarly, you can map skills for in-demand roles.
With talent intelligence, workforce planning teams can list the current and in-demand roles to map a reskilling journey to build a future-ready tech talent workforce.
4. Growth and advancement opportunities
A commitment to employee growth and advancement can aid in recruiting and retaining top talent.
Workforce planning teams must create career paths and growth opportunities for the members of your technology team.
Offer professional development opportunities, mentorship programs, and challenging projects that allow employees to increase their skills and advance their careers.
Draup for Talent enables workforce planning teams to track multiple locations in real time. It enables them to extract talent characteristics data at a given location and adapt themselves to the changing times.
Draup analyzed leveraging tier-2 locations to hire scarce talent and build a skilled tech workforce. The report discusses cost-effective strategies to reskill tier 2 tech talent with in-demand skills for future roles.