What has been the impact of the lockdown on the IT industry, in one of its major destinations, Hyderabad. While the disruptions have been much less compared to other traditional industries, the major takeaway is that this will lead to changes in a post-Corona world.
T S Sudhir of Filter Kaapi Live spoke to Jayesh Ranjan, Principal Secretary (Industries) in Telangana.
T S Sudhir : The IT sector has been largely unaffected in terms of work by the lockdown, with Work From Home an effective option and many companies reporting 90 to 95 per cent workforce in attendance. But do you see a larger impact Covid19 on the industry like it is visible on other sectors like manufacturing?
Jayesh Ranjan : For large IT companies, Work From Home has worked out well. Most of them are deep in the midst of projects which they had to execute and they are taking care of the deliveries. There has been no default and proficiency has not been affected. Indian companies have not let down their clients and this reputation will work well for them once this crisis is behind us.
The mid-scale companies and SMEs have been impacted to an extent. Their orders are usually short-term and that means they have not been getting orders now. Moreover, those IT firms that executed projects for auto, travel or airline sectors, have been adversely impacted. Layoffs are taking place in a few companies. We have formed a committee that also includes industry leaders to intervene in every complaint of a layoff and counsel them. We are telling them to instead effect paycuts. But the reality for some of these mid-size companies is that if they do not sack employees, they may have to shut down. The revenues are shrinking while there is an expenditure commitment.
Sudhir : Apart from these two, there is a significant start-up space that too has got into its own peculiar set of issues.
Jayesh : Yes, start-ups are a different kind of organisation and I cannot say all of us understand this space very well. These are challenging times for them. Those who are in the healthcare-related solutions space or even communication tools, are doing alright and in fact, many of them have gained both in terms of business and revenue. But we cannot say the same for those who are not in these sectors. So this is a moment when many may completely ditch the line they are pursuing. In a way, that is also the nature of the start-up ecosystem where a churn always takes place. Even if there was no Covid-19, this kind of a churn would have taken place except that now it has become bigger. This is the opportunity for them to acquire new skills, preserve cash, change line of activity if need be. We are providing them with the support for that from T-Hub and We Hub.
Sudhir : Companies like TCS are now planning to make Work From Home a part of their work culture. Do you see this as a positive development going forward?
Jayesh : If they have access to reliable infrastructure and good collaboration tools, yes, it is a positive development. Anecdotely, one is hearing productivity has gone up. It takes away the inconvenience of attendance and improves quality of life. It also cuts down on expenditure.
Sudhir : So does that mean it will tempt companies to move out of huge office spaces to smaller ones? What will be the impact on the real estate sector and commercial spaces as a result?
Jayesh : Some kind of balancing will take place as far as real estate is concerned. What we are seeing now is that a tall swanky building comes up but there are no proper facilities for sewerage. The building is constructed compromising on the quality of life.
At the same time, if you see how ratings are done in companies, a critical factor is the quality of office life. If you see offices of companies like Google or Facebook, it is a very unoffice-like office atmosphere. The ambience is such that you can even sleep overnight there. So there will have to be innovations in office spaces. They should not be intimidating but a space where you can deliver work while also socialising and destressing. So offices will need to be a new kind of office, a substitute for home.
Sudhir : For those opting to increase the percentage of employees working out of home, what kind of changes do you foresee in the HR kind of space, in the way the IT companies function at a person-to-person level, as a team.
Jayesh : IT is a lot of glamour but it also has its dark side. The HR-driven hierarchy in companies that are not very mature dictates that the team leader is like God and leads to too much authority invested in one person. This policing often leads to burnout and ailments. The Work from Home option will make that change. It will mean the employee can say I can contribute as an individual and can lead to more openness, trust and self-motivated behaviour. That will improve employee health quotient.
Sudhir : What has been the impact of the pandemic on investments in Telangana? Has there been a rethink, a cooling off of interest?
Jayesh : The slowdown is there marginally but it is not alarming. In fact, it is counterbalanced by American companies in China that are looking for other options. Enquiries and early level feelers have come from few such companies.