Mumbai, February 8 As businesses expand beyond major cities, labor codes are accelerating recruitment in smaller cities, leading to an increase of up to 56% in job postings in tier III and IV markets, according to a report.
India's Labor Codes are triggering a significant redistribution of job opportunities across the country, with smaller cities emerging as the unexpected winners of regulatory reforms, according to a report by WorkIndia, a blue-collar recruitment platform.
The report revealed that despite early concerns about hiring freezes, the data showed a 8.4% increase in total job postings after the codes came into effect.
Tier III and IV markets experienced a surge in hiring, with Kolhapur witnessing a 56.3% increase in job postings, while Udaipur saw a 55.3% increase.
Goa recorded a 23.6% jump, Vijayawada 20.2%, Kochi 17.7%, Coimbatore 14.1%, and Raipur 13.9%, according to the report.
Collectively, the report revealed that these tier III and IV cities are growing at 12-15% or higher, signaling that Labor Codes are accelerating formal hiring in emerging and semi-urban regions.
The WorkIndia report is based on an analysis of data on its platform from October 1 to November 20, 2025, comparing pre-Labor Code reforms data with post-reforms data from November 21, 2025, to January 31, 2026.
The report further stated that tier I markets are also experiencing growth, with Ahmedabad witnessing a 19.2% growth, Pune at 13.2%, Mumbai at 8.8%, and Kolkata at 8.9%.
The data reinforces that demand remains strong across major employment hubs, even as smaller cities experience disproportionate growth, according to the report.
Work-from-office roles increased by 8.7%, while work-from-home postings declined by 10.4%, indicating a clear shift towards on-site employment under the new regulatory framework.
This shift suggests that compliance requirements are pulling employees back to supervised, formal work environments where adherence to labor standards can be more readily monitored and enforced, it stated.
However, salary structures have remained remarkably stable, with average minimum and maximum salaries showing negligible variation post-implementation, indicating that employers are absorbing compliance costs without immediate wage restructuring.
This stability suggests that companies are prioritizing operational adaptation over compensation adjustments in the early phase of the Labor Code rollout.
Meanwhile, gender participation saw a significant positive shift, with job postings for women increasing by 10% compared to 6.3% for men.
This gap represents the widest gender differential in hiring growth recorded in recent quarters, highlighting improved inclusivity in hiring practices after the Labor Code changes.
"The narrative that Labor Codes would kill jobs was always backward. What kills jobs is informality, lack of structure, protection, and scalability. What we're seeing now is the opposite: an 8.4% surge overall, 56% in smaller cities, and women's opportunities growing faster than men's.
“Compliance isn't the enemy of hiring. It's becoming the engine of it, especially outside the metros," WorkIndia Co-founder and CEO Nilesh Dungarwal added.