Why WFH is an idea worth trying with or without Covid-19

Drive into any commercial hub in India and you’ll be struck by the level of activity, the sheer weight of humanity and barring a few exceptions, the feeling of organised chaos. Approximately 50 million workers occupy private and government offices around the country. Indeed, office complexes and commercial areas showcase some of the best aspects of Indian society. 

Entrepreneurship is everywhere. From the vendor hawking mouth watering street food to the chap going around selling phone chargers and extension cables. In recent years, these fixtures have been augmented by new age ventures which seek to ‘organise’ these industries: coffee chains, casual dining chains, and the odd expensive restaurant chain posing as ‘fine dine’. 

The office workers show up in the morning, streaming out of local train stations, hopping off buses, scootering in or alighting from the ubiquitous taxis. They are in a hurry to clock in by 0930! 

The crowds stream out again around 1 PM for lunch, or for the post lunch break. Some just walk around, chattering twenty to the dozen -- politics, relationships and the evil bosses dominate conversations. Many folks amble across to the local cigarette kiosk for their single ‘sutta’ and a cuppa.

This familiar scenario across India is about to go up in smoke. And the Covid-19 pandemic is singularly responsible.

 A popular meme going around is a multiple choice question which asks, “Who is the biggest driver of digital transformation in your organisation?” The choices are CIO, CEO and coronavirus. No prizes for guessing the right answer here! 

The prolonged lockdown has demonstrated that ‘work from home’ or WFH, the acronym preferred by millennials, is not just a viable option, but according to many CEOs I have spoken with recently, actually a better option from a productivity perspective. 

Many employees today, including in our company, thirst for the office to reopen so that ‘normalcy’ can be restored. I submit that they aren’t dying to get back to office. They’re just dying to get out of their homes. It is obvious that WFH is not suitable for all industries or occupations. It is impossible for a farmer, or a truck driver, or a warehouse worker or a nurse, or a gardener to work from home. 

However, the vast swathes of office workers can.

The business case is just too compelling. The savings on rentals, office running expenses, transportation expenses and so on, will add up to a sizable percentage of the operating budget. It is not surprising that many are suggesting that the next 3-5 years are going to see seismic changes in commercial real estate. 

A single company, TCS, has announced that by 2025 it expects 75% of its 425,000 employees to be working from home. 320,000 shifting to home working will mean that the company needs approximately 32 million fewer square feet of office space. Assuming a conservative Rs 60 square foot per month rent, that amounts to Rs. 2,340 crores of savings ($300 million approximately) in just rent each year. You can be sure that the TCS CFO is going to drive this initiative hard. 

However, in my view, the cut goes way deeper than just commercial real estate. 

All the service providers I have described above will see their businesses suffer great disruption. The micro entrepreneurs will be worst hit; the larger chains will have to reorient their model to ‘delivery’ as folks order more stuff home. 

There is going to be a demand collapse for transportation services, especially the commuter bus and taxi services. The service providers to the offices: architects, furniture suppliers, air conditioning equipment suppliers, the security guard companies and the building materials companies are all facing disruption. 

Conversely, some companies will benefit. Packaged foods companies as well as basic grocery suppliers will benefit as people snack and cook more at home. The home delivery industry will see a positive, as will the home services folks such as Urban Company. Technology suppliers will benefit, as remote working demands more technology: better laptops and tablets, robust and secure networks, state of the art security at all levels, more software for automation and for conferencing and events. 

The WFH trend will also trigger some profound changes in urban design and infrastructure. 

The cutting of the commuting umbilical cord will mean that people can live anywhere, even in different cities from their place of work. Though unimaginable even two months ago, this could literally result in the decentralisation of urbanisation in India, leading to the development of new cities and faster growth of (relatively cheaper) Tier II and III cities.

It will, in turn, trigger a redesign of transportation networks as well as changes in the mode of public transport. Utilities will have to rethink electricity grids and consumption patterns will change. 

WFH will mean that individuals will use private transportation much less frequently. The shared mobility trend, and its attendant deleterious effects on auto companies, is likely to accelerate. Fewer cars and motorcycles are going to be required, and fewer kilometres driven also means that the giant oil industry will see a secular reduction. The services industry which surrounds autos: accessories shops, mechanics and petrol pumps will also be disrupted. 

Whether WFH is good or bad for the economy in the long run is up for debate. What is not debatable is that this trend will have positive environmental impact along at least the following vectors: less air pollution, less noise pollution and a reduction in consumption as fewer office clothes, shoes and other paraphernalia will be needed. The impact of even 20 million out of the 50 million people working from home will be significant. 

For that reason alone, it is an idea worth trying. 

Jaideep Mehta is CEO of Mosaic Digital, the company that owns and publishes TechCircle. This views in this article are his own.