80% of IT services companies likely to get to 5-day work mode by FY24 end

IT services sector shift towards full-time office work amid client demand and productivity concerns

Gayatri Joshi (name changed), a resident of Australia working for an information technology (IT) firm, has been working from home for the past three years. Even as the country opened up after the pandemic, Joshi continued to work from home without the need to go to office. She is employed by a large Europe-headquartered IT services firm with a huge India footprint.

Rahul Kumar (name changed), employed by an India midcap IT services firm and stationed in the US, has the option of a hybrid work model. While his employer does not mandate it, since he works from the client side, he must be in office for at least four days a week.Closer to home, Ranjita Das (name changed) has just received an email from her human resources (HR) head informing her that the company plans to implement a five-day work mandate, starting early next month.

These three scenarios highlight the current situation in the IT services sector.

The industry is making efforts to bring its employees back to office. HR experts also point out that, with attrition returning to normal levels, many companies are using the current dip in business momentum as an opportunity to transition employees back to office.

According to HR experts, by the end of this financial year (2023-24), almost 80 per cent of IT firms will have made a five-day-a-week work-from-office policy mandatory. This stands in contrast to what employees desire. Whether you visit professional online platforms or ask HR experts, the two most common questions from employees are about remote work or a hybrid work model.

“Hybrid as a concept will persist, but remote work is mostly off the table for most companies. Companies are clear about their preferences, and given the current market conditions, employers have the upper hand. I believe that by the end of this financial year, almost 80 per cent of IT services companies are likely to transition to a five-day work mode,” said Kamal Karanth, co-founder of Xpheno.
 

When asked about the mandates from clients when hiring candidates, Karanth mentioned that clients prefer employees who are ultimately willing to return to office 100 per cent when mandated.
 

Recently, some business unit heads at India’s largest IT services firm, Tata Consultancy Services (TCS), encouraged their teams to be in office for five days a week.

Sources indicate that although there was no company-wide mandate to return to office, the message is clear. TCS is not alone in asking employees to return.

Wipro has stated that senior employees and leadership has been coming to office for three days and they encourage employees to also come, must be in office for three days a week. In a statement the company said, "We believe the future of work is hybrid, and have adopted a flexible approach in our policies, keeping the requirements of our clients and employees as our foremost priority. Collaboration and innovation through shared perspectives is the foundation of a high-performing culture. Since May, all employees are being encouraged to work from the office, any three days of their choice, in a week."

Similarly, companies have acknowledged (off the record) that when clients have mandated that teams be in office, they must comply.
 

It appears that some of this demand is client-driven, especially in the banking, financial services and insurance (BFSI) sector.

In the US, banks have returned to office full-time; even their IT teams, previously remote, have been asked to come back.

However, a more significant reason is productivity, as pointed out by Karanth.

“Almost 30 per cent of their current employee base consists of freshers who have joined in the past two to three years. Organisations like theirs must sense the need to acclimatise these youngsters to office settings to meet the ever-increasing client demands in terms of skills, processes, and culture,” he shared.

Manu Saigal, director of general staffing at Adecco, stated that they have observed an increasing number of clients leaning towards full-time in-office work for employees.

“Many Indian employers are now sceptical about hybrid working, citing concerns about the productivity and performance of remote workers, who may face distractions, technical issues, or lack of supervision at home,” he observed.

Despite resistance from job seekers and employees, an internal survey conducted by Adecco reveals that 55 per cent of organisations prefer in-office work, while 35 per cent favour a hybrid model, and less than 10 per cent support remote work.

“Manufacturing, BFSI, retail sectors, and other traditional sectors have the highest in-office mandates, while IT, consulting, and business process outsourcing sectors offer more flexibility,” added Saigal.

Another factor pushing people back to office is the numerous deals recently secured by companies. Implementing these deals will require additional hiring, and companies want to avoid a repeat of the 2021 scenario involving quiet quitting and moonlighting.

“With attrition lower than before and job security concerns, the timing may be right to bring employees back to work,” said Karanth. However, for top talent, companies are willing to make adjustments.

“Currently, about 40 per cent of our mandates offer flexible work arrangements to their employees, as they recognise the benefits of remote working, such as increased productivity, employee satisfaction, and cost savings. The groups most likely to be asked to work from the office full-time are senior management, sales, customer service, and essential staff (almost 100 per cent for blue-collar staff),” added Saigal.