70% companies report high attrition in Tier 1 cities: KPMG report

The study found that 90 percent of the companies leveraging the talent pool of satellite cities like Navi Mumbai, and Gurugram are highly satisfied with the outcomes.

Seventy percent of companies report high attrition in Tier 1 cities such as Mumbai, Delhi and Bengaluru due to intense competition and higher career opportunities, a KPMG report has said.

Satellite cities of these metros such as Navi Mumbai and Noida and Tier 2 towns like Kochi and Indore have comparatively lower attrition rates. The Talent Feasibility Report attributed it to factors such as better work-life balance, proximity to family and support networks.

KPMC conducted the survey in February and March through conversations with HR leaders and talent acquisition heads from more than 40 companies spanning over 10 sectors.

The survey found that 90 percent of the companies leveraging the talent pool of satellite cities such as Navi Mumbai, and Gurugram are highly satisfied with the outcomes.

The nature of work influences organisations' decision criteria, with Tier 2 cities often housing transactional and doer roles, while tactical and transformational roles are located near headquarters, primarily in Tier 1 cities and some satellite towns.

Candidates now prefer office campuses that offer amenities such as cafeterias and recreational spaces, state-of-the-art health and fitness clubs, a commitment to sustainability and excellent connectivity infrastructure.

Cost of living and compensation

Employees consider residential rent, property indices, local purchasing power and the overall cost of essentials such as goods, utilities and transport when evaluating the cost of living.

The report says Chennai, Hyderabad, and Delhi have lower cost of living indices, while Bengaluru, Gurugram, and Pune offer higher local purchasing power. The cost of living varies across Indian cities.

As many as 95 percent of the leaders says that cost-of-living differences across Indian cities do not affect compensation decisions.

Cities like Navi Mumbai, Hyderabad and Chennai are improving business environments by offering competitive commercial leasing prices, resulting in increased attractiveness for organisations seeking to set up operations in these locations.

Unlike in the 2000s, the attractiveness of SEZs in the current market, where industry experts employ a cost-benefit analysis approach, is changing.

Leaders say while tax rebates and simplified regulatory procedures are often considered crucial, the overall appeal needs to be evaluated for supporting SEZs.