PESTEL analysis.

1. Political Impact: There will not be a huge political impact as majority of this

population does not exercise their right to vote in host states and are still registered voters in
their home states. This means that they are less likely on anyone’s agenda for any significant
post their migration back to their home state.

2. Economic Impact: There will be an impact on IT centric states, IT companies and IT

workforce but before we move to the analysis lets have some rough figures from various
sources to get a perspective of its affect.

Total IT Population: 4 Million (Direct Employment)

Average IT Employee Salary:

INR 358,450 (Experience < 1 year)

INR 615,702 (Experience 1 to 4 year)

INR 985,543 (Experience 5 to 9 year)

INR 1,445,290 (Experience 10 to 19 year)

INR 2,916,319 (Experience > 20 year)

Assuming 70% of the total IT population moves back to their native states i.e. 2.8 Million, we
would be moving a lot of money which is in circulation (in cities like NCR, Mumbai,
Bangalore, Hyderabad, Pune, Kolkata) back to other cities. This will create a state of equal
distribution of income/expenditure in other cities.

To put this into perspective I have assumed work force distribution across different salary
tiers for a population of 2.8 million people and we could see that approx. INR 2449 Billion
will move out of circulation from few IT centric cities to rest of the country.

2.1 IT Centric States: With departure of most of the IT workforce we can assume a
noticeable drop across revenue streams for the host state governments as activities like
registration/transfer of properties, sales tax on all items of consumption will decline due to
reduced consumption. Below are some of the general source of income for state governments
and most of them will take a hit.

 Intergovernmental Transfers
  Property Tax
 Charges & Miscellaneous
 Sales tax
 Other Tax
 Individual Income tax

2.2 IT Employees: IT employees will be the biggest beneficiary of this change and will
save on a lot of compulsory expense items. The list includes.

 Rent which constitutes to 25% of monthly salary for employees.

 Travel (Petrol/Diesel) expenses for the daily commute.
 Food & Miscellaneous expenses as there will be a noticeable
difference in prices across home and host states due to difference in
purchasing power parity within states.
These savings can then translate into yearly savings for employee and increase his purchasing
power due to higher net savings. Although, not conclusive but this may help in reducing
prices of commodities for population of the host state and simultaneously impact the
economics of home state due to homogeneous distribution of income across states.

2.3 IT Companies: With operational cost becoming significant part of the total
expenditure for IT companies reducing their infrastructure expense can surely help them
preserve some cash or divert this saving for all sort of other important activities. Companies
too can save on items like:

 Cost of leasing property

 Cost of consumables (electricity/water)
 Cost of security services/medical services/maintenance services

3. Social Impact:  Social impact of this change will be felt in host state as people bring
their culture along with them and this re-shift might change cultural diaspora of the society.
Also, employees will lose the human touch of working personally with their teams.

4. Technology Impact: There are some technological challenges which should be

addressed while we make this transition to WFH.

 We have already witnessed increase in counts of social engineering

scams, phishing events, malware and ransomware attacks aimed at
people working from home due to limited internet security.
 Tasks requiring high performance computing.
 Lack of Integrated Deployment Environment for software releases.
  Banking, Financial Services & Insurance (BFSI) projects handling
confidential customer data like bank account details, credit card
details etc.
 Project dealing with health care data of customers.
 BPOs might not be able to decentralize their operations as TRAI
may have norms on processing/routing of international customer
calls to an employee’s home location.

5. Environmental Impact: This should work in favor of environment and we will see

some positive aspects to it.

 Pollution level of tier 1 & 2 cities may come down to a permissible

limit.
 Less rapid expansion of tier 1 & 2 cities which will work in favor of
their flora and fauna.
 De-congestion of some of the rapidly growing cities.

6. Legal Impact: There would be some legal & regulatory impact for employers like:

 Ensuring Occupational Safety & Health Act (OSHA) standards are

followed when working from home.
 Making sure Person with Disability have appropriate ergonomic
arrangement when working from home.
 Change in income tax laws as expense incurred by employers in
enabling WFH for its employees should be accounted under business
expenses.
 Change in labor laws to accommodate concept of WFH and giving a
legal definition to it in all existing applicable laws.
In conclusion WFH should be the way forward as it looks beneficial for both employees and
employers, but various government bodies will have to act like a catalyst to increase the rate
of this reaction till it completes its course.