India’s Labour Codes Are Redrawing the Hiring Map- Tier III & IV Cities Emerge as the New Growth Engines: Report
As implementation matures and state-level adoption deepens, the real test will be whether employers continue to invest in decentralised, formal employment models. If current trends persist, India’s future workforce may be more evenly distributed, more inclusive, and more resilient than ever before.
India’s long-debated Labour Codes are beginning to reveal their real-world impact—and the results are challenging long-held assumptions about regulation, employment, and geographic concentration of jobs. Contrary to fears of hiring freezes and cost-driven slowdowns, fresh data indicates that the new labour framework is actively reshaping India’s employment landscape, shifting momentum away from over-saturated metros toward smaller, emerging cities.
A report by WorkIndia, a leading blue- and grey-collar recruitment platform, reveals that total job postings increased 8.4 per cent following the implementation of Labour Code reforms. More strikingly, Tier III and IV cities recorded hiring growth of 12–15 per cent and above, with some locations witnessing surges exceeding 50 per cent.
This trend signals not just a redistribution of jobs—but a structural transition toward formalisation, compliance-driven hiring, and regionally diversified workforce strategies.
From Compliance Anxiety to Hiring Acceleration
When India consolidated 29 central labour laws into four Labour Codes—on Wages, Industrial Relations, Social Security, and Occupational Safety—employers initially voiced concerns around higher compliance costs, reduced flexibility, and potential job losses.
However, the WorkIndia report suggests the opposite outcome. Instead of suppressing hiring, the Labour Codes appear to be unlocking formal employment opportunities, especially in regions historically dominated by informal labour.
“The narrative that Labour Codes would kill jobs was always backwards,” said Nilesh Dungarwal, Co-founder and CEO of WorkIndia. “What kills jobs is informality, lack of structure, protection, and scalability.”
Tier III & IV Cities: The Unexpected Winners
The most pronounced impact of the Labour Codes is visible outside India’s traditional employment hubs.
According to the report:
Kolhapur recorded a 56.3% rise in job postings
Udaipur saw a 55.3% increase
Goa posted 23.6% growth
Vijayawada increased by 20.2%
Kochi grew 17.7%
Coimbatore rose 14.1%
Raipur expanded by 13.9%
Collectively, these Tier III and IV markets are growing at 12–15 per cent or more, substantially outpacing national averages.
Why Smaller Cities Are Scaling Faster
Several structural factors are driving this acceleration:
Lower Cost of Compliance
Smaller cities offer lower real estate, wage, and administrative costs, making it easier for employers to absorb compliance obligations without restructuring compensation.Formalisation of Informal Work
Labour Codes incentivise documented employment contracts, social security registration, and standardised wage definitions—conditions easier to introduce in greenfield or semi-formal markets.Local Talent Availability
Improved digital matching and reduced migration dependency allow employers to tap local workforces rather than relying on metro-based labour inflows.Operational Decentralisation
As companies rebalance supply chains and service delivery networks, smaller cities are emerging as operational hubs rather than satellite locations.
Metros Hold Steady—but No Longer Dominate Growth
While smaller cities are gaining momentum, Tier I markets continue to demonstrate resilience rather than decline.
The report notes 6.6 per cent overall growth across Tier I cities, indicating sustained demand across established employment centres:
Ahmedabad: +19.2%
Pune: +13.2%
Mumbai: +8.8%
Kolkata: +8.9%
This suggests that India’s employment growth is no longer a zero-sum contest between metros and non-metros. Instead, hiring demand is broadening—diversifying geographically rather than relocating entirely.
For HR leaders, this implies a multi-node workforce strategy, where metros remain centres for leadership, technology, and high-value roles, while Tier III and IV cities scale operational, support, and frontline functions.
Work-from-Office Makes a Comeback
One of the most telling behavioural shifts captured in the data is the return to physical workplaces.
Work-from-office roles increased by 8.7%
Work-from-home postings declined by 10.4%
This reversal suggests that regulatory compliance requirements—ranging from working hours to safety norms—are easier to monitor in supervised, on-site environments.
From a policy perspective, this reinforces a key intent of the Labour Codes: to bring workers into visible, auditable, and protected employment structures, rather than loosely governed remote or informal arrangements.
For HR teams, this shift raises critical questions around:
Site readiness and infrastructure expansion
Workforce housing and transport in smaller cities
Compliance-driven workforce scheduling and attendance systems
Salary Stability Despite Higher Compliance
Perhaps the most surprising insight from the report is what did not change.
Despite increased compliance obligations, average minimum and maximum salaries remained largely unchanged post-implementation.
This stability indicates that:
Employers are absorbing compliance costs rather than passing them on to workers
Early-phase Labour Code adoption is focused on operational alignment, not wage restructuring
Companies are prioritising long-term workforce stability over short-term cost recovery
For global HR observers, this challenges the assumption that labour regulation necessarily leads to immediate wage inflation or cost shocks.
Women’s Workforce Participation Shows Strong Gains
Another significant outcome of the Labour Code rollout is its apparent impact on gender inclusion.
The report highlights:
10% growth in job postings for women
Compared to 6.3% growth for men
This represents the widest gender differential in hiring growth seen in recent quarters.
The improvement may be attributed to:
Standardised wage definitions reducing pay ambiguity
Stronger protections around working conditions
Increased employer accountability in formal hiring processes
For DEI leaders, this data suggests that regulatory structure can be a catalyst for inclusion, not a barrier—particularly in regions where informal employment has historically excluded women.
What This Means for HR and Business Leaders
The early signals from Labour Code implementation point toward a structural rebalancing of India’s labour market, with several implications for HR strategy:
Geographic Workforce Planning Must Evolve
Hiring strategies should now actively include Tier III and IV cities as primary growth markets.Compliance Capability Is a Competitive Advantage
Organisations that operationalise labour compliance effectively can scale faster and access wider talent pools.Formalisation Drives Sustainability
Structured employment improves retention, gender participation, and scalability—key metrics for long-term growth.The Metro Monopoly Is Ending
Talent density is no longer confined to large cities; productivity and compliance can coexist in smaller regions.
A Structural Shift, Not a Short-Term Spike
The WorkIndia data suggests that India’s Labour Codes are not merely regulatory adjustments but economic enablers, accelerating formal job creation where it was previously constrained.
“Compliance isn’t the enemy of hiring,” said Dungarwal. “It’s becoming the engine of it—especially outside the metros.”
As implementation matures and state-level adoption deepens, the real test will be whether employers continue to invest in decentralised, formal employment models. If current trends persist, India’s future workforce may be more evenly distributed, more inclusive, and more resilient than ever before.
For HR leaders globally, India’s experience offers a powerful case study: well-designed labour regulation, when paired with scale and digital infrastructure, can unlock growth rather than restrict it.
For further insights into the evolving workplace paradigm, visit
- India’s Labour Codes Are Redrawing the Hiring Map- Tier III & IV Cities Emerge as the New Growth Engines: Report - February 11, 2026
- Girish Ramadurgam on Talent-Fitment” Problem: How to resolve the skill mismatch - January 19, 2026
- Viplav Bhatt on Mukand Limited’s Journey to Building Organisational Capabilities for a Changing Industry Landscape - January 19, 2026
