Bringing Offices to Home

Amidst all the uncertainties birthed by the spread of Corona Virus, one thing is very certain – not everything is getting back to how it was. One of the key changes that have emerged from this situation is increased telecommuting or as we like to call it Work-from-Home (WFH). The global tech sector, comprising some of the world’s largest employers like, Amazon, Google, Facebook, Microsoft and Twitter and even consulting firms like ZS Associates have announced a mandatory work from their home until the last quarter of 2020. Computer and software jobs are more agile and that is evident with how quickly and efficiently massive changes have been implemented. India’s tech sector is not far left behind in taking the lead and leaders are coming forth making big announcements.

Rajesh Gopinathan, CEO of Tata Consultancy Services (TCS), has also expressed his opinion that, “…it will never be 100/100.”, by which he meant that 100% of the workforce will not be required to be at the office for 100% of the time.

While some companies in the IT/ITES sector already had the work-from-home capability, the lockdowns and social distancing policies necessitated a complete closure of office complexes, resulting in the entire workforce being asked to operate remotely. TCS moved about 90% of its approximately 4.5 lakh employees post-lockdown to an operating model it calls SBWS (Secure Borderless Work Spaces), wherein the employees have been working from outside the approved facilities, securely connecting with clients and TCS systems. Witnessing no perceptible reduction in the productivity, the company has realized that they don’t require more than 25% of the workforce to be at the office to be 100% productive.

Deciding that the time has come let go of the 20-year-old operating model, TCS aims to shift to what it calls, a 25- by-25 model, by 2025, in which only 25% of the employees would be required to be present at office facilities for 25% of the work-time.

Let’s see what TCS stands to gain from this move.

1. Working in offices has an associated seating cost arising from property rent, electricity consumption and other facilities. This was believed to be an essential cost for ensuring productivity, so far. However, the pandemic has helped break such mental blocks. Roles where the primary output is on a computer or telephone can be moved to a complete work-from-home model or to need-based attendance, thereby cutting seat costs without compromising on the productivity.

2. Flexibility to work from homes also implies that considerable time spent in commute, especially in major cities, can instead be used for work, learning, fitness or for pursuing other hobbies, possibly leading to increased employee satisfaction and perhaps a better work-life balance for some.

3. Further, having the workforce distributed over a wide geography can safeguard against hinderances to business continuity in the event of a disaster.

For any IT company to shift to a remote-working model, a major challenge will be getting the clients’ go-ahead. While business continuity is the primary concern for corporates, security of client data needs to be ensured. There is no dedicated law on cybersecurity or a data protection law in India, and this complicates the scenario for businesses as they continue to be held liable for client data leaks even when the work is being done from locations outside the office facilities.

While working from home is provingly better from companies, this might be a short term aberration for the employees, who would have to move to more digitally inclined routes of collaboration, especially C-level and other senior executives who might find it difficult to adjust to newer technologies quickly.

The way forward will be for the companies to come up with detailed work-from-home policies and get agreement from employees for the same. Working by connecting Virtual Private Network (VPNs) and implementing Cloud based solutions can ensure that basic security is taken care of in the remote-working model. Apart from that the regular security protocols related to not sharing of passwords, not creating back-ups, etc. should be rigorously maintained.

In response to the lockdowns, to ensure minimal losses to business continuity, Infosys, another Indian IT giant, provided high speed broadband connectivity for its remote workers and expanded its VPN bandwidth by ten times. The company increased its backend capacity by 4 times to support the increased numbers of concurrently connected remote workers. Furthermore, it moved about 35,000 desktops to employee residences to ensure no setbacks to client deliverables.

Wipro, TCS and pretty much the rest of the IT/ITES industry has embarked upon the ambitious journey to have a majority of its staff work from home. While this was all started due to the Covid-19 pandemic, this is proving to be a beneficial accelerator.

At Wipro, a global crisis management task force under the COO was put to action. The taskforce proactively reached out to customers, briefed them about the measures being taken and sought their approval. The hectic efforts lead to approximately 93% of the employees being approved to work from home, and 90 % of the employees engaged in projects were enabled globally to work remotely.

Like TCS’s 25-by-25 strategy, it will become imperative for other IT majors in India to shift on similar lines, to remain competitive. Debates are happening at Wipro and possibly at Infosys, evaluating whether they need the entire workforce back on the campuses. Few Mid-tier IT firms also estimate that they can allow up to 70% of their workforce to operate from home, seeing a marked increase in productivity while all the employees worked from home. As this becomes a trend, the IT/ITES will be ushered into a new era of work culture.

There are a few other things that must be given a thought in this context. Couple of decades ago, Indian IT firms came up with the concept of ODCs (Offshore Development Centers) that are basically building/complexes where thousands of employees work for global clients. Consequentially, the IT sector became a guzzler of real estate, setting up sprawling campuses around Bangalore, Hyderabad, Pune, Noida, Gurgaon, and Chennai. With scales tipping in favor of remote-working, real estate prices (For IT companies) are likely to come down.

It should be noted though, that a reduction in the required number of employees at office and the reduction in the need for office space won’t be proportional.

50% fewer employees in office wouldn’t translate to a 50% less requirement of office space, as shared spaces in terms of cafeterias and break rooms will not reduce as much. Another matter to be considered by the companies will be regarding the Tax benefits that these companies enjoy upon operating from the current SEZs (Special Economic Zones). A shift to a distributed operating model will probably have some effect on these benefits. Nonetheless, the cost saving accrued from the reduction in required office space, to whatever extent that might be, will huge and envious for other industry sectors.

The need to travel to offices has been a deterrent for many women, especially working mothers, which eventually leads to them quitting jobs, causing a loss of good resources in many cases. The flexibility to work from home will allow such women to dispense their familial obligations without having to compromise their careers in the IT sector. This can encourage even more women to enter the IT field of work, thereby bringing in a lot of untapped talent to the industry.

Also, with the businesses functioning normally in a decentralized manner, employees will not necessarily have to shift out from their hometowns to the IT/ITES hub cities.

Most of the hometowns are tier-2 and 3 cities where the telecom and internet infrastructure are not as developed as that in the metros. With remote working becoming the norm, these cities will see a rise in consumers of such facilities. This will present a great opportunity to telecom and internet service providers for growth at such places, heralding major changes in the corporate landscape forever.

Down the years, the structure of companies in the IT/ITES industry might change. We may see the core of the organizations shrinking to a handful few, supported by subject matter experts, who might be working on contract, for multiple non-competing firms. The general view one has of an “employee” will be changed. The age-old “desk job” would lose its meaning as people would be dispensing their services to various employers simultaneously, while sitting on their couches and sipping some home brewed coffee.