Hybrid work mode: Tech Mahindra only needs 50% office space

Call technology a boon or bane but companies do not necessarily want to restrict themselves to a strict work from office model in a post-pandemic world. IT firm Tech Mahindra plans to use less than 50% of the company’s office spaces in the coming months. “From a real estate point of view, I do not need more than 50% of the workspace. My own reading is that it will be more like 40%. If for every employee, I used to provide 150 sq ft of space, I am now going to give them only 60 sq ft because I can do the flexi working,” managing director and CEO CP Gurnani tells Fortune India.

“Our internal surveys show that mostly youngsters want to come back to work, middle-aged people are more comfortable not driving and working from home,” says Gurnani.

Gurnani backs his reasoning by emphasising on the merits of technology that has enabled employees to work from anywhere in the past couple of years. “The world of work has changed. AI, automation, security, distributed platforms... it is a given. Hybrid is here to stay. Technology has proven it. It is just a matter of which functions, which areas require much more interaction,” says Gurnani.

In fact, in terms of leasing of traditional office spaces, the average deal size for technology companies dipped by 15% pan-India in 2021 compared to pre-Covid-19 levels, data sourced from property consultant Colliers showed. Analysts at the firm say that technology companies are exploring a hub-and-spoke office model wherein the idea is to have one main office in a tech corridor and multiple smaller offices near residential locations.

“This trend is likely to gain momentum. Going ahead, we expect small and medium-sized deals to gain prominence juxtaposed to large-sized deals,” says Ramesh Nair, CEO, India and managing director, market development, Asia at Colliers.

With hybrid work model giving corporates an opportunity to hire skilled talent from tier two and three cities at lower costs, several IT companies are also tapping into co-working spaces to accommodate such employees. For coworking player Smartworks, the IT sector makes up about 55% of its clientele. “Almost 60% of the workforce from the top seven cities have gone back to their native places and potentially 10% of them will never get back to their original work stations,” Amit Ramani, founder & CEO at Awfis had said earlier. Tech Mahindra is aggressively betting on talent from tier two and three cities.

The firm has hired over 8,000 employees from nine locations including Bhubaneswar, Nagpur, Vijayawada and Coimbatore. The company, however, did not disclose whether they have booked co-working spaces or not. It is understood that they have set up smaller campuses in few such locations.

The concept of hybrid work model is gaining wider acceptance. E-commerce startup Meesho, for instance, has decided to completely shift to a hybrid work model. The firm is giving its employees the option to choose to work from home, office or any location of their choice. Based on employee demand, the company will however, consider setting up satellite offices at locations with higher talent density. Meesho describes the structure as a ‘boundaryless workplace model.’ The startup claims that it will make provisions for annual workations and in-person quarterly summits.