IT Sector’s Return To Office Will Be Gradual But Not 100% In 2021

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Information technology companies’ return to office in 2021 will be gradual with no perceptible change by end of March, revealed a survey by Hyderabad Software Enterprises Association (HYSEA), the apex body of IT and ITeS companies in Hyderabad. As per the survey, Return to Office (RTO) will peak towards the end of 2021 and will never be 100 percent.

60 percent of the companies plan to have less than 20 percent of their workforce operating from office by end of March 2021. But there will be a significant increase of 40 percent in Work from Office (WFO) numbers by end of June.

The survey further reveals that nearly 75 percent of large and very large companies are planning only 0-9 percent of employees working from office by end of March. By June 2021, the WFO percentage is likely to touch 20 and in quite a few cases, WFO is expected to touch 30 percent. By December 2021, the likely WFO percentage for large and very large companies is 50-70.

More than 55 percent of the industry plans to increase WFO percentages to greater than 70 percent by Dec 2021, with more than 39 percent planning to increase to greater than 90 percent WFO. No one responded saying 100 percent WFO will return, said HYSEA, a registered apex body with more than 300 members representing the IT/ITES industry in Hyderabad.

As many large companies have reported that a significant percentage of their employees are working from outside Hyderabad (native places), RTO will become that much more time-consuming and complex considering the reverse migration that needs to happen in large numbers, the survey report added.

While life in Hyderabad seems seems to be inching back to normal, the WFH percentages for IT/ITeS industry continue to remain as predicted at around 90 percent. In the case of many large companies, it remains as high as 95 percent.

Productivity also continues to be very high, despite many large companies reporting that the work environment at home is the single largest factor impacting Work From Home (WFH). More than 63 percent of companies report productivity levels greater than 90 percent relative to the pre-pandemic levels. In the case of large and very large companies, nearly 100 percent responded saying that the productivity levels are greater than 90 percent and in some cases 100 percent.

Contrary to the analysts’ predictions, almost no one among the large and very large companies mentioned plans for any hub-spoke model in the medium term.

The IT/ITES industry in Hyderabad has over 5.82 lakh employees working in 1,500 companies. The sector had clocked exports of over Rs 1.28 lakh crore during 2019-20. The participating companies were defined as micro (0-100 employees), small (101-500 employees), medium (501-1,000 employees), large (1,001-5,000), and very large (more than 5,000 employees). The respondents include all sectors of the IT Industry, including IT Services, IT Products and IT-enabled Services.

Also to be noted is that in the last nine months, only 20 percent of the LVL companies have terminated some office space in the last few months. The majority have held on to the status quo and not anticipated any increased office space requirement post-RTO. The trends clearly point that WFH will remain the status quo for the majority in 2021 as well.

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