Labour codes trigger job surge in smaller cities, women hiring sees strong boost

The new legislation on labour in India is altering the distribution of jobs in India. Although the main centres of employment have always been metros, the number of jobs in smaller cities is growing at a faster rate. Firms outside of large cities are recruiting in the tier III and IV markets, which are providing an alternative to the workers in the small towns as reported by PTI.

On the contrary to the fears that had been raised before about the hiring slowdowns, job postings have grown after the Labour Codes were enacted. A report released by WorkIndia indicated that the total number of postings increased by 8.4 percent, with smaller cities such as Kolhapur and Udaipur recording the highest growth, which was over a 55 percent increment in the number of jobs. This indicates that formal hiring is diffusing beyond the normal urban centers.

Rapid job growth is experienced in smaller cities

The most benefitting cities are Tier III and IV with the help of the Labour Codes. Kolhapur experienced a 56.3 percent rise in job placements, as Udaipur experienced 55.3 percent. The cities that record significant increases are Goa (23.6%), Vijayawada (20.2%), Kochi (17.7%), Coimbatore (14.1%), and Raipur (13.9%). All in all, these smaller cities are increasing by 12-15 percent or more, indicating that new labour regulations are contributing towards the increase of formal jobs in new locations.

The comparison between the data provided by WorkIndia between October 1 and November 20, 2025 (pre-Labour Codes) and November 21, 2025, and January 31, 2026 (post-Labour Codes) is made. It demonstrates that small cities are currently becoming significant formal employment centres.

Expansion still goes on in Metropolis

Even the metros are experiencing constant growth. Ahmedabad recorded 19.2 per cent growth in employment, Pune 13.2 per cent, Mumbai 8.8 per cent and Kolkata 8.9 per cent. Small cities are expanding more, but still, big cities are also important employment centers.

More on-site jobs

It is reported that there is a shift towards working in offices. There was an increase of 8.7 per cent in the work-from-office jobs and a decrease of 10.4 per cent in the work-from-home jobs. This has been attributed to the reason that compliance with labour rules can be well monitored by employers in on-site locations.

However, there has been a minimal increase in the average wages despite the changes. This means that firms are operating on compliance expenses without improving compensation pay right away and concentrating on modifying operations initially.

Women’s hiring sees a boost

Advertised positions of women were up by 10 percent compared with 6.3 percent for men. It represents the greatest gender gap in enhanced hiring growth in recent years, and it is more inclusive following the Labour Codes.

A changing workforce in India

The trend as reported by the WorkIndia report is very clear: the smaller cities are emerging as new work centers but the metros continue to record consistent demand. Labour Codes not only enhance the level of compliance, but they also provide more opportunities in the country, and formal jobs are now available to a broader and more inclusive labour force.

(With inputs from PTI)
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