R Srinivasan

Why it makes sense for the government to 'work from home'

R Srinivasan | Updated on September 03, 2020 Published on September 02, 2020

Staggering establishment costs: The government owns more building space than anybody else in the country   -  Shanker Chakravarty

Shifting to virtual work can generate enormous savings

Unlock 5.0 has been announced. Even as the country is setting new world records in the number of new Covid cases on an almost daily basis, the government, spooked by the massive drop in economic activity — the GDP for the first quarter of the current fiscal has contracted by a staggering 23.9 per cent (and this number is likely to be revised sharply upwards as data gaps get filled in and information on the informal sector is added) — has simply gone ahead and opened up most activities. Public transport services are being further eased up, offices have been allowed to work with 100 per cent strength and most restrictions on movement of goods and people have been lifted completely. The strategy now appears to be to lock down the worst hotspots and hope that the exhortations for social distancing and mask discipline sink in the situation doesn’t go completely out of control.

Real incentive

How far that is successful will soon be evident, but most people have already adjusted to the new normal. India’s more than six million-strong IT workforce, for instance, has largely been transitioned to ‘work from home’ (WFH) protocols. From large employers to small businesses, most enterprises now have a near-permanent arrangement for their staff to work largely from home. From TCS to Twitter, large corporations are already transitioning to a situation where not more than a quarter of their workforce will need to come in to office, that too, not on a daily basis.

The reasons are not far to seek. Okay, till Unlock 5.0, there was no public transport available and there were real challenges in simply getting to work, given that most of our chaotic cities are constructed around a “work-home” binary which has prioritised (and therefore concentrated) workspaces in crowded business districts, with residences being located increasingly farther away. It is not just Mumbai — India’s capital of commuting; most of our cities, including non-metros, have long-ago exceeded “human scale”. Without personal or public mass transport options, the old system of ‘going to work’ is simply unworkable in a lockdown situation.

That may have speeded up the adoption of WFH across the board — at least in the white-collar work space — but the real incentive was savings on costs. Employers discovered that even if they were stuck with fixed overheads in terms of either owned office buildings or workspaces on long-term leases, the sheer savings from other overheads like power, air-conditioning, security, catering and so on, were nifty — these savings crucially went to the bottomline when the bottomline itself was collapsing.

Savings pull

Another equally important factor for the success of WFH was, however, the pull factor. WFH is actually WFA: work from anywhere. It gave employees the flexibility to deal with work from home, or the hospital if someone in the family was sick, or even a park with public Wi-Fi. They could spend more time with family and also help their partners with a share of the housework. And above all, they saved time and money. According to a recent survey by Awfis, a major flexible workspace provider, WFH has resulted in massive savings in time and money for the employee too. The survey, conducted across June-July this year, polled 1,000 respondents across various cities and industries. It found that one in three persons employed in urban India was saving between ₹3,000-5,000 per month. This money would otherwise have gone towards commuting costs, clothes, food and the dozens of other small and big expenses which are a part and parcel of work life.

Even more interesting was the savings in time. Employees saved an average of 1.47 hours of travel time daily, which works out to the equivalent of 44 additional working days in a year. No wonder, managers are loving the idea of WFH as productivity has actually shot up.

Employers are saving enormously as well. In Mumbai, for instance, even in the distant suburbs, a 500-seater workspace can cost upwards of ₹10 crore a year in rentals, or ₹2 lakh per employee per year. In a recent interview, the CEO of Policybazaar.com mentioned that the fully loaded cost for employees tends to be 1.2-1.5 times the average salary at the executive level. I came across a report by PwC Netherlands, which calculated that if half the workforce worked from home one additional day per week, this will free up 8.7 million sq m of office space and over €1 billion in savings on rent alone! And this in tiny Netherlands, whose total population, 1.7 crore, is less than Mumbai’s!

Government at work

There is however, one employer — the biggest in India, in fact — who has been keeping strangely quiet about making WFH a permanent thing. And that is the government. Not just the government of India, but State, local, district and village-level governments have all, while reluctantly adopting some WFH, shifted rapidly to office work as restrictions lifted.

I can’t understand why. The government is not just the country’s largest employer. It is also the country’s biggest landlord, owning more building space than anybody else. And it spends a whopping sum of money every year, just to keep the show running. The establishment expenditure of the Central government grew from a budgeted ₹5.46 lakh crore in 2019-20 to a budgeted ₹6.10 lakh crore in 2020-21 (mind you, the actuals tend to overshoot every year by 5-10 per cent).

I have no idea what the combined establishment costs of States are, but given the budget size, it is expected to be at least the same or higher. Just imagine the savings if, say, 50 per cent of the government staff was enabled to work from home (which anyway is either provided or paid for by the government mostly). When electricity discom finances were examined under the Uday scheme, it was found that their establishment cost ate up 13 per cent of revenues!

WFH also means that there will also be no need for Soviet-era vanity projects like the much reviled Central Vista project in the heart of green and open Lutyens’ Delhi. The Central Vista project will include a new Lok Sabha, a new Rajya Sabha and a common Central Secretariat housing 51 Ministries in 10 buildings, apart from new residences for the Prime Minister and Vice-President. That’s over ₹20,000 crore saved right there!

Then there is the impact on transparency, efficiency, productivity and above all, accountability. Because virtual work leaves a very real and auditable trail. Maybe that explains the silence.

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Published on September 02, 2020
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