Samiksha Panda, an independent real estate consultant who works on workplace management projects in Delhi and Mumbai, has seen her business see a 3X growth since June 2020.
Panda, who primarily advises financial services clients, is seeing a rise in interest from insurance companies to move to a hybrid workplace model, with options of hot-desking.
"The cost saving by giving away excess floors or office spaces in large cities like Mumbai, Delhi and Bengaluru is massive. And employees are also comfortable working remotely so it is a win-win," said Panda.
Google is saving more than $1 billion annually by working from home due to the COVID-19 pandemic, Bloomberg reported.
During the first quarter of 2021, Google's parent company Alphabet said it saved $268 million in expenses from company promotions, travel and entertainment, compared with the same quarter last year, "primarily as a result of COVID-19."
In India's insurance sector, there is a move towards similar cost savings. Multiple office spaces are being given away or leased out.
"Companies will end up saving between Rs 10 lakh and Rs 1 crore on a monthly basis if hot-desking is adopted and extra floors and office space are given away on rent or leased," said Sunil Lobo, CEO, Strive High HR Services that works with corporate clients on workplace issues.
Underwriting, investment and claims teams take up maximum floor spaces in insurance companies. Sales staff and agents mostly work on the field and report to office once a week.
What are the changes?
Insurers like HDFC Life Insurance have made plans to offer hot-desking facilities to staff.
At HDFC Life, there is a move to a ‘Phygital’ working model, which is a combination of physical and digital.
HDFC Life MD & CEO Vibha Padalkar told Moneycontrol earlier that for teams (that can’t work from home), instead of fixed sets there would be hot-desking.
“So, if you come two days a week, then you will use that seat. On the other days, some other team will use those seats. That way we can reduce office costs and reduce the number of floors required,” she explained.
Hot-desking means that there are no fixed seats. Employees follow a roster system to work from office. This means that one cannot simply decide that he/she will work from office on any given day. If they walk in unannounced, there won't be any seating available in the office.
So, this helps the corporate to save up additional floor space that can either be leased out or sold.
In FY21 the number of branches of HDFC Life stood at 390, a reduction of 30 branches compared to a year ago. Padalkar said that the company looked at branches and the footfalls in each of them.
"But, we are in the process of adding new branches. Wherever the branches are closed, it is because in a lot of far-flung areas people are used to self-serve or virtual branch,” she said during the recent earnings call.
In the insurance sector as a whole, the move is towards rationalisation of costs by closing down branches that see low footfalls. In FY21, close to 500 of the 11,600 branch offices of life insurers were shut according to industry sources.
"Hot desking is the way forward. Multiple branch offices are not required in the same vicinity. So there will be further rationalisation happening as far as branch office space is concerned," said the human resource-head at a bank-led life insurer.
Is this feasible?
HR experts are of the view that while companies may give up some additional space, a complete remote working setting and giving away office properties won't be the trend in India Inc.
Rituparna Chakraborty, co-founder and executive vice president, TeamLease Services, told Moneycontrol that many companies have realised that after the initial love affair with WFH that it takes a toll on the mental health of employees.
"There are various challenges and employees themselves want to work from office. Once vaccination is in place, things will go back to office. A few floors could be given up by corporates but they wouldn't completely give up on their workplaces," she added.