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Work from home gets real; efficiency, productivity challenges crop up

After being forced to shift to work from home (WFH) model during Covid-19 pandemic, a big debate has opened up in companies regarding cost efficiency and productivity in the long run after employees and managements found it delivered mixed results.

While it has gained popularity in the short term due to Covid-19 crisis, companies are realising new challenges are cropping up like quickly upgrading and testing their technology infrastructure— and also with that a whole host of attendant problems like client & data confidentiality, lack of onsite support and network security have cropped up. Then there’s also human psychological aspect; employees need emotional and social bonding.

“There’s going to be a change in we operate post Covid-19 for sure. We can have our 20% staff working from home, anything beyond that will depend on the benefits. But a large-scale deployment this way would be a challenge as law of diminishing returns will kick in,” said George Inasu, Chief Operating Officer, Fidelity National Financial India.

According to Inasu, the employee cost under WFM and work from office is similar at around Rs 12,000 per seat. While the company’s cost of transportation and food is saved in WFH, the incentives needed to ensure better productivity and engagement has spiked by 140% during the lockdown. According to Knight Frank’s survey of 232 occupiers across the country, 28% have seen productivity improvement in the last 8 weeks of WFH, but in 61% cases it has either declined or remained same. Companies will have to re-engineer processes like hiring, performance appraisals, supervision, incentive and rewards to accommodate the new mode of work whether it’s a major shift or small tweaking for non-core operations.

So is tech-enabled work from home a permanent shift? No, say experts, it will be a combination. “I don't think it is fair to say that future is work from home. What does that mean? It is not that everything is going (to be) work from home. Forget confidentiality, I don't think human beings would like to do that 100%. Our view is that it is going to be a combination of on-shore, near-shore, off-shore and work from home,” said N V (Tiger) Tyagarajan, CEO of Genpact, India's largest business process management player.

“Some people have said that 75% of the delivery will be work from home. I don't believe this. It depends on the industry,” said Tyagarajan.

According to him, every service and industry can actually build a whole methodology to determine the processes, proportion and type of work that can be done in each of these four buckets. In financial services sector, cost factor is likely to prompt companies to explore this option. However, that would be for non-core functions and critical units like fund management, dealing and senior staff of various functions will continue to operate from offices because of sensitivity of issues they deal with and the regulatory requirements of some of these roles.

The concept of WFH is not new for many IT companies. It has always existed in a small percentage but mostly to allow flexibility to employees. However, during the Covid-19 crisis it has proven to be an effective business continuity process. Consultant say, the long-term efficacy of this arrangement will have to be evaluated carefully to understand its impact on the overall business, going beyond just the financials.

“The operational expense of real estate expenses of work from office versus work from home has to be compared. While the savings on real estate operations expenses are marginal by all means, this saving has to be measured against qualitative aspects of the business such as lack of control, retention and attraction of talent, competitive edge, data security etc,” said Viral Desai, national director, occupier services, Knight Frank India. The Knight Frank survey says WFH is expected to impact real estate as 15% of these companies said they will reduce the portfolio, while 62% have shown interest in increasing the same.

“Definitely, there will be some shift towards work-from-home given that social distancing norms will result in lesser number of employees being able to attend office etc as more space per employee would be required but not to the extent it is being envisioned,” said Gaurav Karnik, Partner & National Leader - Real Estate, EY India.

Currently companies have no alternative than to allow WFH due to lockdown, however, when mass vaccination or a cure is available, the situation will be reassessed to create a model that delivers more productivity at least cost while taking best care of employee needs.

May 18, 2020

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