Can Indian ITeS industry adopt a 4-Day Workweek?

At the APGI 2023 Conference, a question was asked during the panel discussion around when can India expect a 4-day workweek. It's a question that has been trending for a while now and many organisations across the globe have moved to a 4-day working. Since some time now, I've been taking a holiday every second Friday and ensuring that I consume all my leaves every year. It's improved my work-life balance and given me time for activities beyond work.

Countries like Sweden have been experimenting with this idea since 2015 with mixed results and many other countries have also been experimenting with 6-hour working days. India also introduced it's new labour codes that introduced 4-day workweek having 12-hour shifts. Which begs the question, how feasible would a 4-day workweek be in the Indian context?

The Indian Context

It's not been very long since parts of the Indian professional industry moved to a 5-day working model. Growing up, most schools (excluding mine) worked for 6-days (maybe half-day on Saturdays), and a major chunk of the Indian industries still work 6-days a week. Reliance's technology subsidiary (now Jio Platforms) earlier used to be operational for 6-days a week which also applied to their vendors like PwC; these 5-day working vendors compensated their employees gracefully for the additional day their employees spent working for Reliance.

In fact, Business Insider recently published 4-day workweek not yet feasible in India. In addition to this, every state in India has regulations around the maximum number of hours employees can work in a day / week / month / quarter. So when the question is asked around when can the Indian ITeS industry expect a 4-day workweek (including at the APGI 2023 Conference), the usual answer is -

Jab hoga tab hoga (loosely translating to - it'll happen when it happens)

The question probably isn't when will it happen, it's - what will it take for the Indian ITeS industry to adopt the 4-day workweek, and below is the probable answer to this question.

Managing the source of revenue

The most common source of revenue for the Indian ITeS industry is the number of hours devoted for client billable work. That's where a majority of the shift will probably happen when it comes to 4-day workweek. When the number of days reduce, the revenue also reduces, to be precise, it reduces by 20%. However, the costs do not reduce by the same - the salaries can't reduce, the appraisal percentage can't reduce because the cost of living does not reduce, the brick & mortar rents continue until work can be moved to fully remote, the licensing fees do not reduce, the cost of operations do not reduce, the number of public & personal holidays should not reduce, etc.

Owners of privately held companies may decide to move to a 4-day workweek and take a hit on revenue, in turn providing better work-life balance to their employees, however that may not be the case for invested companies where shareholders' profitability is a major constraint. However, there are a few (not so simple) steps to manage this. To start with, since the revenue reduces by 20% and we have a day less to recover this loss, increasing the billing rate by 25% would offset the incurred losses. So if an organisation was charging $60 per hour for a consultant then the new billing rate would be $75.

However this would mean that the recovery for a vendor's loss of revenue is being shifted onto the client and that may not be acceptable to them. Although this shouldn't lead to a loss of business because money isn't (shouldn't be) the only parameter for engaging with a service provider. It's the value that these service providers create for their clients that carries more weightage and every service provider should work towards establishing this USP for themselves. And, an industrywide shift like this wouldn't leave enough room for competition driven by billing rates; sooner or later with the shift of talent, this eventually will become a norm.

One effect that will certainly happen would be the increased cost for the consumer as the clients will also offset their losses by increasing the prices for the ultimate customers. This will result in an increased cost of living which will result in a need for increased salaries and this will feed into the cycle of the increased billing rate. So maybe that 25% increase isn't the right number, however due to the differences in the profit margins and economic needs of individuals, an appropriate number can be calculated by every organisation and it's not a very complicated math.

Managing the mindset

Theoretically speaking, 40-hour workweek is possible in 4-days without making any changes mentioned above; by simply moving from an 8-hour workday to a 10-hour workday. The labor codes of India allows for this arrangement. In fact, Karnataka & Haryana even allow 50 hours overtime in a period of three months, Telangana & Tamil Nadu?allow 6 hours of overtime in a week, and Maharashtra allows 125 hours of overtime in a period of three months.

It's important to know and acknowledge this because it's common for Indian ITeS employees to spend longer that 8-hour workday even today. However, the client is usually not billed for more than 8-hours a day; in one of my earlier jobs my additional billed hours were escalated by the clients as against their vendor policies however my expected extra-hours were not reduced due to an approaching deadline. And many organisations mandate employees to be in their (home) office for 9-hours a day to ensure that they're productive for 8-hours. So if we can convince our clients to bill for 10-hour workday instead of 8-hours and ensure that the employees are in their (home) offices for 11-hours, everybody wins!

This is precisely the mindset that organisations need to get away from in-order for 4-day workweek models to thrive.

The idea is not to squeeze out 40-hours in a week from employees, it's to reduce the number of working hours for employees thereby increasing their value as professionals. The above stated norm which is pretty much an induced behaviour as a result of flexible working benefits provided to the Indian ITeS employees needs a shift where individuals are treated as professionals providing value to their clients instead of hands providing hours to their clients. This is much easier said than achieved.

E.g., in the above section I spoke about managing billing rates; our industrial revolution mindset has moulded us to specify our billing rates in hours. That results in multiple complications for Indian ITeS employees, like one is expected to constantly type code for 8-hours in-order to justify their value to the clients, similar to putting a bolt on a nut on an assembly line. Unfortunately that's not how knowledge workers (should) operate; solving complex problems requires a lot more than banging keys. And then there's the expectation to perform organisational activities like taking interviews, participating in community initiatives, producing thought leadership, etc.; an hourly billing mindset loosely translates into completing these (mandatory) organisational activities beyond the 8-hours dedicated for clients (and the 1-hour dedicated for hunger breaks). Worse, these are a part of performance evaluations (that's a story for another time). These examples may be difficult for employees in the west to comprehend but are very common for an Indian ITeS employee, usually driven by those in the west.

So what's a better mindset that needs to be imbibed? Mindset without actions is wishful thinking, so some actions need to change. When it comes to client billing, a change could be as simple as moving from an hourly billing rate to a daily billing rate, loosely translating to an employee dedicating their workday for a client. However the employee carries the autonomy to decide how their client commitments are fulfilled. This employee is then required to spend not more than 8-hours a day to manage their responsibilities towards their clients (e.g. delivering code), their organisation (e.g. mentoring a fellow team member), and themselves (e.g. learning a new skill); these are indirect benefits for a client anyway. It's proven research that such autonomy intrinsically motivate individuals thereby improving the quality of work, bringing in more focus, and reducing turnover. This is an accepted way of working amongst many western knowledge workers and yet an alien concept in the Indian ITeS context.

Other mindset shift that can make a difference is to enforce a minimum number of leaves employees should take instead of a maximum allowed, and without an option to carry-forward these leaves. As strict as this sounds, this is necessary for a healthy work-life balance. I read somewhere that an annual appraisal makes us happy once a year, a balanced work-life makes us happy everyday.

Finally, managing ourselves

India still shows up in the list of developing countries and will probably continue to be that way for a while. The Indian ITeS industry however has moved from being a source of low-cost workforce to a source of knowledge partners. And perhaps we need to behave as such. Indian schools often teach their students that "Work is Worship"; that we must respect everyone's work and it is unethical to judge someone on the basis of their profession. And yet, we bend over backwards to please our clients by whom we wish to be treated as equals.

If this is hard to believe then allow me to provide some examples. When a (potential) client visits an Indian ITeS provider they are welcomed with garlands, rangolis, diyas, and their names are projected at the office reception; because that's how we treat our guests. We reserve elevators for them, provide cookies & beverages at their desk, order special meals, and take them out for drinks. Have we enquired if they're comfortable with this exhibit? Most likely their response will surprise us. Moreover, this isn't a behaviour of equals.

Many teams have moved towards having equal distribution of late evening calls with their clients however many still rely on Indian ITeS employees to serve during off-hours given our history of hosting call-centres. This needs to change, we need to change, and respect the value we add for our clients. Simple habits like saying "No" is a good start to make this shift. This requires relationship building as stakeholder management and value articulation as client satisfaction. This requires to set better measurable goals and showcasing our thought leadership.

It's not been long since a snobby client in my previous organisation smirkingly asked me if I felt happy when they visited because my team got special meals. That hurts to hear as a manager of a team; but it felt nice to let them know that it was the same meal that's served in the cafeteria for every other employee. Sure this isn't just a change we need to make to treat our clients as equals, most leaders need to change and act as equals as well, and that's probably a bigger problem to solve in the Indian ITeS context.

In Conclusion

Unfortunately, even if these may look like simple implementations it's far too difficult as long as our managers exist as gatekeepers of revenue targets, holiday approvals, and bell curve performance distributions; and the Indian ITeS industry worships leaders who want Indians to works for 60-hours a week. So maybe Business Insider is not wrong in saying that India isn't ready for a 4-day workweek but maybe that's because we aren't ready to give up our old ideas. The good news is that that's the easy part.