Tech Mahindra may allow 25% employees to work from home till March 2021

The company is in talks with clients to seek approval, and is building a control system to track staff productivity in real time

Tech Mahindra on Monday said it is in discussions with its clients to allow 25-30 per cent of its employees to work from home (WFH), at least till the end of the ongoing fiscal. In order to effectively track the productivity of these employees as well as the overall business outcome, the company is also building an integrated command control system, a Beta version of which is already operational, Manoj Bhat, chief financial officer of the Pune-headquartered company, said.

“We believe that 25-30 per cent is a number that can easily be sustained (for WFH) in the current financial year. We have seen a lot of willingness from customers to consider remote working. But we have to work with our customers to make this a viable model which will happen in the next 1-2 quarters,” Bhat told Business Standard.

"The point is to get to know what is collectively happening in work from home, work from the premise or client location and how to do you track the outcome and productivity on a real-time basis," he added.

At the end of Tech Mahindra had a headcount of around 125,000. According to the company, around 94 per cent of them are currently working from home, owing to the lockdown that has been imposed to contain with the spread of Covid-19 pandemic.

Bhat said that one of the reasons why the company is looking at making the proposed control and command centre an "integral" part of its workstyle in the future, is to make the quality management system online and real-time rather than depending on manuals and documents. However, Bhat agreed that, the company has to deal with data privacy issues, laws of the land and client preferences to take WFH forward on a larger scale. "That's why we are not talking about a much higher number."

During its post earnings conference call with the analysts last Thursday, Tech Mahindra highlighted WFH as one of cost-optimisation strategies. Others measures being considered by the company include reduction in subcontracting costs, third-party costs, and savings in travel expenses which account for 2-3 per cent of total costs. The company has also announced to temporarily hold disbursal of variable pay and bonuses. 

"We have always said our model will be going in for subcontracting and as we transition it to our own workforce, you will see that costs coming down. The costs have now dropped to 3 per cent of revenue from 16 per cent (in previous quarters) is reflective of that practice," Bhat said.

“Some operating leverage should manifest from the cost takeout initiatives whenever revenue growth recovers though part of it (along with currency depreciation) will go towards providing a better value proposition for stressed clients,” brokerage firm ICICI Securities had stated in a recent report on Tech Mahindra.