Side effects of Coronavirus: The global economy tanked due to several lockdowns, social distancing and closure of businesses. But one thing that has set the ball rolling is the unprecedented shift of focus from Metros to small towns.
That means cities like Mysuru, Tumakuru, Mandya, Davangere, Ballari, Mangaluru, Udupi, Hubballi-Dharwad, Belagavi, Kalaburagi, Vijayapura, Shivamogga, Karwar, Bagalkot, Raichuru, Bidar and other small cities/ towns in Karnataka are seeing increased job relocation. The truth is, these jobs belong to Metros and other big cities, but are being executed now from small towns and cities, which is boosting the local economy.
This article talks about the trends that are making it happen on the ground and how it will benefit the local economy.
Since independence, the opportunities in India have always been in the Metros and other big cities. Be it higher education institutes, government offices and private companies these cities have dominated the scene. People from all over India migrate to these cities to make their living, and their migration is creating all sorts of problems there. The infrastructure is far stretched with choked roads, elevated cost of living, pollution in the air, which is driving people crazy.
Not all can afford big offices
The MNCs, who have built “CASTLE OF OFFICES ” in the big offices to create good impressions to their employees and their clients, triggered even more migration of people from small towns that has brought in high inflation.
These companies now find it increasingly difficult to contain the high cost of operations driven by high inflation, as operating out of such IVORY TOWERs with all the supporting infrastructure is quite expensive that not all companies can afford it. Unless companies do work which is high on the “VALUE CHAIN” and has high-profit margins, it’s impossible to run the show from those white elephants for long.
Difficult to run the show when profits are shrinking
Also, thanks to the intense competition from peers, the profit margins are shrinking like never before, as their clients bargain to the bones. Low value added jobs with low margins are no more profitable to execute out of India and they are finding their way to Vietnam, Philippines, Indonesia etc.
In a nutshell, Metros or other big cities are becoming double-edged-sword for companies – based out of big cities can attract talented employees but the cost of operation goes up as a result of high-cost-of living. That means, what is gained out of attracting talented employees is lost on high-cost of operations, and the net gain is hardly noticeable.
Why not look for alternative cities & small towns?
MNCs rarely go to small towns
The MNCs rarely go to small towns because of few reasons listed below
- Inadequate infrastructure – of all kind
- Lack of awareness
- Unwillingness of skilled people to migrate and settle in small towns
- Shortage of skilled manpower locally.
- Poor road/ rail/ air connectivity to other commercial hubs
Though companies do go and establish manufacturing units in small towns, they do it to avail incentives the government doles out. They won’t go there out of love for the town. In contrast, the service companies hardly head to small towns. They rather stay put in big cities cribbing about all issues they face in day-to-day life.
Why is it so? – Locally there is a lack of skilled people. The talented people from outside refuse to join them in small towns because of the above said reasons.
Small towns and their brand value
Though governments do all things including the development of infrastructure to lure the investment from IT/ BPO and R&d companies to tier 2/ 3 cities. They are failing to do so, because there is resistance from MNCs, as they find it difficult to attract talent to the small towns.
Why do talent refuse to go to less known cities & towns?
They won’t go because of the perception that the town is undeveloped so their life could be boring there. However, the reality may be quite opposite. But what matters more is perception, not the reality.So, Perception management is the key.
Does anyone know why Bengaluru, even with all the problems related to infrastructure and pollution, attracts far more IT and high technology investments than any other city in India. Because it is perceived by the people as a high-tech city “cool” to live, like Sanfrancisco in the US. People even equate it with the silicon valley of the US, though in reality both are like “chalk” and “cheese”, as far as culture is concerned. Executives die to live there (Bengaluru), so investments follow them.
How to change the perception? The government has to do brand building for Tier 2/ 3 cities in order to change the perception. This is because, like products and services, cities and towns too need branding in order to appear “SEXY” in the eyes of the people. They should find it “cool” to live there, that’s when they come to live. The truth is, every city should market itself for attracting investments and marketing needs branding, both are tightly connected.
Side effects of Coronavirus: Everything is changing on ground
The year 2020 saw the arrival of CoronaVirus and turned everything upside down. The year saw the lockdowns, social distancing, business closures like never before due to the side effects of coronavirus. The lockdown affected business operations of MNCs and they had to somehow deliver their critical services – internet banking, operation of OTT platforms like Netflix, Amazon prime video etc, mobile telecom operations, utility operations of electricity boards, railway ticketing service etc.
How did they manage? – Because of the lockdowns and social distancing, there were no transportation services for the people to physically come to offices and work. However, the business operations must go on somehow. That was when the service providers resorted to Work From Home (WFH) with gusto. These specialists did remote working and managed their clients’ networks without any glitch during the lockdown periods, thus earning the confidence and appreciation from their bosses and clients.
Thus the trend of Work From Home started.
How Work From Home became a reality?
Over the last decade or so businesses have tightly embraced digitalisation, that means their operations have moved from paper based systems into electronic form.
- HR operations
- Marketing/ branding and content creation activities
- Order acceptance and processing
- Entire banking operations including loan disbursal
- Hotel room/ tour package booking activity
- Call-center operations
- Accounts, bookkeeping and tax filing.
- Air/ rail/ bus ticket booking services
- Internet based payment services including UPI
- IT and Telecom network maintenance
- Business Process Operations (BPO)
- Cloud and Data center operations and many many more
The employees have to log on to the intranet/ internet network to work when they work from their offices. At home also they would do the same thing to login to the system, there is hardly any difference. In fact, all white collar jobs can be serviced remotely without any hitch.
Side effects of Coronavirus: The people fled to their hometowns
When the lockdowns were lifted and offices were still closed, employees hailing from different cities moved en masse back to their hometowns and switched to working remotely from there. The business went on without any hitch. For working from home based out of their hometowns, all they required was a stable broadband connection and power. Fiber optic based broadband connection available at low cost gave them stable internet connection and UPS provided quality power 24×7.
Benefits of Work From Home from their hometowns
Though people who Work From Home are official employees of MNCs, and because they are allowed to live and work from their hometowns at the same salaries they earn in Bengaluru/ Mumbai, their salary is considered to be a luxury in their hometowns and are considered to be rich there. They can save a lot living in small cities as the cost-of-living there is low. Also, the money spent on purchasing goods and services can pump-prime the local economy. So, this is how economies of rural & small towns started seeing the uptick in 2020, when big urban areas were experiencing recession because of the side effects of coronavirus.
Work from home is making even the corporates win too
The side effects of Coronavirus turned out to be an advantage for MNCs, as they no longer need massive office complexes to house 1000s of employees. They can move to small offices to accommodate a few core teams. This can save on power and utility bills and pay less for Internet connections.
The money saved is nothing but money earned, as their profits surge.
What will deepen Work From Home further?
Following technologies will make Work From Home even more popular in the coming years
- High speed mobile 5G technology with 5G backhaul facility
- Next generation collaborative working tools
- Blockchain technology for safe and secured virtual collaborative work
- Next generation Virtual team meeting tools
- Google meet, Skype business, Cisco telepresence
- Next generation digital project management tools to accurately track project progress and manage it cost effectively within budget.
- Startups based out of small cities but employees based out elsewhere.
- Gig economy – is a system in which organizations hire independent workers for short-term commitments. People have to digitally look for assignments all over the virtual world and market themselves accordingly. If people have the right skills, and companies find it worthwhile, they get hired on a temporary basis to execute a predefined work. Like a pro, each one of them have to execute their work satisfactorily from wherever they are, and walk away with money, once their assignment is officially over. However, work will come if and only if one has deep knowledge in the subject he claims he is good at, and he is able to start off without taking anyone’s help.
- So, in a way the trend in the near future is going to be “work goes to where talent is”. A 180 degree shift from what we have seen so far. People used to go where there were jobs and this millenia old trend is finally getting reversed.
Work From Home concept was NOT new to corporates
Though the concept of Work From Home has been in vogue for some time now. In fact, a few companies have a policy of letting their employees Work From Home if need be, for one OR two days a week, as an incentive to keep them happy. Beyond that it takes a lot of permissions from the management.
TRUST DEFICIT hindered Work From Home so far NOT technology
The reason behind NOT ALLOWING employees Work From Home fully, and letting them only visit the office if there is a need, is TRUST DEFICIT. The Management was doubting the INTEGRITY of employees till the Coronavirus hit them on the face. The lockdowns, office closures and social distancing imposed to contain the infections, brought the change in the mindset, as the employees had to Work From Home for long hours in order to keep their clients’ operations running without any glitch. They did that perfectly well, thus earning the appreciation and confidence of the management as well as their clients.
The age of permanent Work From Home has arrived.
Government’s dilution of obsolete OSP rules
The dilution of Other Service Providers (OSP) clauses that emphasises the need for employees to work together under one roof, goes a long way in enabling WFH. Employees belonging to Business Process Outsourcing (BPO) companies can now not only WFH but Work from anywhere (WFA). That means, one can work from coffee shops, restaurants and other hired office cubicles, that too from different cities altogether.
Also, the IT industry through their association “NASSCOM” is now seeking permanent WFA arrangement for units operating in Special Economic Zones (SEZ), from where nearly 60% of Indian IT services are exported. Government is seen to be granting their wish, as it will put millions more people on payroll, which is good for the Indian economy.
Side effects of Coronavirus have finally brought jobs to small cities which over the last few years the governments couldn’t achieve despite doing whatever they could. The 2020s will see the rise of Tier-2/ 3 cities as economic power houses of India.
Should we thank Coronavirus for this