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How covid-19 is pushing businesses to move out of the metros

The pandemic may change the way businesses build and run offices. Moving out of metros to tier 2 and 3 cities, where the majority of the workforce is from, could be the new normal

Zoho Corp. founder Sridhar Vembu.
Zoho Corp. founder Sridhar Vembu. (Photographs courtesy Zoho)

When the lockdown in late March sent a number of Zoho Corp. Pvt. Ltd employees back to their home towns, the software company headquartered near Chennai pivoted to the kind of work-from-home routine that would become the norm among certain industries in the months that followed. Alongside, when Zoho did an in-house survey, it discovered that 40%, or about 3,500, of its employees wanted to continue staying—and working from—home.

The study provided the impetus for more satellite offices. Since 2011, it had already been experimenting with rural offices—it has one in Tamil Nadu’s Tenkasi, with about 500 employees, and another in Renigunta, Andhra Pradesh, with 150. Its offices, including the one in Pleasanton, California, and the main one at Vallancheri, tend to be off city centres. The firm has opened, or is opening, another five, possibly 10, in Tamil Nadu, Kerala and Andhra Pradesh. One of them is in Surandai, in Tamil Nadu’s Tirunelveli district, which had a population of about 35,000 according to the 2011 census.

Zoho's office at Tenkasi.
Zoho's office at Tenkasi.

These smaller offices, with 20-odd employees in each, will come up in rented spaces. Any employee may take the initiative in identifying a location for an off-shoot. The company will set it up, putting in place the infrastructure and other facilities. So far, centres have typically emerged from a bunch of colleagues living within a radius of 20-25km deciding collectively to set up an office in their area.

“The pandemic sped up our plans,” says Praval Singh, Zoho’s vice-president, over the phone from Noida, Uttar Pradesh. “Without the pandemic, we may not have actively pursued it. Employees of smaller offices have become so passionate, about how they have a lake nearby, the scenery, etc.”

Even before corona became more than a beer brand, some established companies had already found solace in smaller venues. Online medical advice company iCliniq, for instance, shifted to relatively quieter Coimbatore from Bengaluru eight years ago. Now, the pandemic may see more businesses rethinking workplace locations outside cities or within them. For, the ecosystem of working remotely that developed during the lockdown has given employers an indication of why their offices need not be centralized, or clustered in metropolitan cities.

To begin with, real estate rates in smaller towns are lower—so the cost of setting up an office in a village is much less. If employees carry their city salaries into more economical towns, their spending power increases, potentially allowing them a better quality of life. The local economy too gets a boost, with more employment opportunities and spending.

Also Read: Has the pandemic made you want to move to a greener life?

“We are distributing the workforce closer to where they belong,” adds Singh. “We want to do the hub-and-spoke model, with 20-30 people each connected to a hub. We are going in that direction, of rural revival. The pandemic has shown that people want to be closer to family and friends.”

Other companies are seeing the same trend. Co-working company 91springboard’s spaces may have been used sparingly over the last few months, even after the process of “unlocking” started in June, but it has had a “massive amount of enquiries”. Every company planning for a post-covid-19 future is exploring options, says Anand Vemuri, one of the company’s four co-founders. The future, he says, will see a lot of satellite offices, to seat smaller sets of people closer to their homes rather than forcing everyone to travel to one base.

“A typical company with, say, 300 people in Bengaluru is wondering: Can I have 30-40 desks across the city? Then everyone can get to one of these distributed offices. Companies may be wary of having a hundred per cent work-from-home system but if, say, 30 employees are from Chennai, they can set up a satellite office there,” he says.

For the past few years, 91springboard’s headquarters has been split between Delhi and Panaji, Goa, where a chunk of its management team is based. The decision was driven by a need to work remotely and escape Delhi’s air quality.

Vemuri says they are seeing a bigger shift now—earlier, distributed offices and remote working contributed to 15% of 91springboard’s business, largely from a few international companies. He expects that number to grow to 45%, and include Indian firms.

“We are gearing for hot-desking (multiple people using the same work stations at different times), remote working.... Between now and March, we want to evaluate where the demand is flowing. By then, we would need to know which neighbourhoods to expand to.”

Cedric Courtin, founder of Paris- and Chennai-based design firm Ateliers Courtin, is in the process of moving his practice to Puducherry, while designer Pinakin Patel has plans to shift his workshop from Alibaug to Uttar Pradesh, according to an article in Architectural Digest in July. Bengaluru-based broking firm Zerodha has told employees they can work from their home towns without any change in salary and is acquiring land in Krishnagiri, on the Tamil Nadu-Karnataka border, to set up an additional workplace.

Not every employee may wish to move to a quiet village. Education and medical facilities tend to be better in bigger urban centres. People crave human interaction—like the water-cooler conversation—and the sense of community in workspaces to avoid that sense of isolation and disconnect.

There is, obviously, a flip side. Not every employee may wish to move to a quiet village. Education and medical facilities tend to be better in bigger urban centres. People crave human interaction—like the water-cooler conversation—and the sense of community in workspaces to avoid that sense of isolation and disconnect. Day-to-day activities are less challenging than bigger strategy meetings, which need people in a room, hours of deliberation over a whiteboard and endless cups of coffee, interactions that allow employees to both learn and bond.

“The disadvantage is also access to talent,” says Saurabh Nanda, founder of Goa-based travel company Vacation Labs. “If you are building a business that will not go beyond 50-100 people for the foreseeable future, you can hire those many in a smaller city. If the trajectory puts you in the 200- to 400-member team category, then it’s hard to scale up.”

Any growing company needs to fill positions across the board, from top management to recent college graduates, and not everyone can work from home. “A large part of the workforce is entry level that needs face time, culture and hand-holding. It’s difficult to on-board a fresher remotely,” adds Nanda, who considered Mumbai and home-town Kanpur before founding his company in Goa to save on overhead costs.

For firms like Zoho, the possible downsides of a dispersed model do not seem to be a deterrent. Most of its close to 8,000 employees in Chennai have come from other cities, towns and villages, moving to a city for a job. That’s a big compromise in quality of life and cost of living, says Singh—something his company’s founder is on a mission to reverse.

“By living close to their towns,” Zoho founder Sridhar Vembu told the portal YourStory, “they can get back to farming, serve their temples, mosques and churches, and continue their regular work. Their children can be home-schooled, and the concept of schooling itself will change going forward.”

Arun Janardhan is a Mumbai-based journalist who covers sports, business leaders and lifestyle.

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