Companies must strive to retain productive women employees

 (Mint)
(Mint)

Summary

TCS ended its work-from-home (WFH) policy and announced that employees should work from the office (WFO) at least three days a week. This shift in policy has caused more women than men employees to resign, highlighting the unequal sharing of home and care responsibilities in Indian homes.

Tata Consultancy Services (TCS) is the largest employer of women in India’s private sector. It is an Indian multinational company that provides information technology (IT) and consulting services. TCS is known for its proactive initiatives to help women employees manage their work-life balance, and last year, more than 200,000 women worked there.

In an unusual case, more women than men left the company in the fiscal year ending on 31 March. What has changed?

The company recently ended its work-from-home (WFH) policy. It announced that employees should work from the office (WFO) at least three days a week. Apparently, this shift in policy has caused more women than men employees to resign.

A hybrid workplace model seems to be the emerging norm. Google and Amazon, too, have adopted similar policies. Other Indian IT companies are also expected to move to WFO soon. Why are companies switching from WFH to a hybrid workplace model? In the US, labour productivity in terms of output per hour of work by non-farm employees declined through 2022. Year-on-year productivity growth in the US has been negative for the past five quarters for the first time since World War II. We do not have labour productivity estimates for India. While several factors are at play, one of the reasons for a productivity slowdown could be the fewer number of hours employees work from home and/or their work quality (bloom.bg/3NBvg7q).

If employees work fewer hours or their quality of work suffers working at home or in office, it will show up in lower output. Creativity and innovation may be hindered either way, too (bit.ly/3qX6kyg). These effects may show up with a lag as ties with colleagues weaken over time. While this applies to both men and women, it is not difficult to see why it may affect women employees more. Many women prefer working from home, not because it is easy, but they need flexibility to manage home and office work. Women’s networks and social engagement are curtailed if they fully WFH, which is not beneficial for them over the long term. Despite this, if young women in an IT company are resigning as their employer moves to a hybrid workplace model, it tells us something about the unequal sharing of home and care responsibilities in Indian homes, barring a few exceptions.

Using data from India’s time use survey 2019, we show that a single employed young woman (aged 20-29) in India spent around 1.5 hours on domestic work and childcare, while her married counterpart spent about 5.5 hours (bit.ly/3XbTGYz). In contrast, an unmarried, employed young man spends about 25 minutes on household work, while his married counterpart spends around 47 minutes. Marriage does not seem to make much difference to Indian men’s time allocation for housework. No wonder only 19% of married women in the 24-29 age group with a child or children in urban India were employed in 2019 (bit.ly/3Xe0h4x). In contrast, 44% of single urban women in that age group were employed. This proportion falls to about 33% of married women with no child.

Given this unequal burden of housework, either women tend to leave jobs or are asked to do so if a husband’s income is deemed sufficient. Women also tend to feel guilty about not being able to fulfill their roles as mothers and wives to the standards they hold themselves accountable for or are expected of them. Unsurprisingly, we find that the employment rate in urban India is the lowest among better educated (with secondary education or above) married women with children. Compared to women with relatively low education, these women are likely to have a spouse with higher earnings.

Letting young women drop out of employment is not optimal for firms or for the Indian economy. If a company judges an employee on productivity, many productive young women may leave workplaces compared to less productive men. Nobel laureate Gary Becker theorized that marriage decisions tend to be based on comparative advantage. If men are better at earning money and women are better at caring for home and children, it makes sense to specialize accordingly in a marriage. With women’s education and skill levels rising, a role reversal within marriage based on true comparative advantage would have long taken place, if not for social norms and stigma. That would be good for the women involved and for companies as well as the economy.

What can companies do?

Rather than moving all employees to a hybrid workplace model, first, allow employees to WFH or opt for a flexible working model based on their measured productivity. If an employee is equally or more productive working from home, why force her to WFO? Second, if an employee cannot commit to working full time from home or it does not reflect in the output produced, then offer a pay cut. Third, WFO does not guarantee increased productivity either. Companies should also look carefully at the productivity levels of employees who WFO as they do for those who WFH.

It is in the interest of companies to retain all their talented employees, men or women.

Vidya Mahambare is a professor of economics at Great Lakes Institute of Management, Chennai.

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