Is Work From Home the New Solution to Combat Recession? India is considering to Amend Labour Laws
Saving is no more a desire but need of the hour to survive recession.
IT firms have started vacating rented buildings at all major IT parks. They are planning to open "Supervising hubs" in small buildings. 75 to 90% of staff are allowed to work from home and their natives.
With +2800 IT and related company members in India, NASSCOM has approached the Central /State Governments to
1) Amend or stop a significant percentage of Labour laws to suit the IT sector "work from home" which is around 75%. Last week of May 2020 itself Central Government has approved and advised NASSCOM to provide a blueprint of amendment in Labour laws.
2) To amend the Income-tax Act to include expenses by Employer/Employee incurred at home, modification to cover insurance for working from home.
So "Work from home" has come to stay. It is a matter of time before the Acts/Laws are amended. So there is no need for the IT people to remain in Metropolitan cities to work. Major companies have started hiring, but offers are rolled out with work from home condition and with lesser pay when compared with the salaries earlier. So this year may see appraisals will see 0 hikes, 0 variable and layoff of professionals with higher salaries.
Understand how salaried IT professionals get effected? Let's categorise them into two groups.
Group 1: Professionals living in own house or paying the home loan in main cities like Bangalore, Delhi and Pune
Group 2: Bachelors with little experience living in rented places
Group 2 will happily relocate to their native and can save more. Companies will also pay less, but they will also be able to create a balance between their earnings and savings.
Group 2 will face twice impact of inflation in cities as prices have gone up of vegetables, and FMCG, rentals halved and a small reduction in existing home loan rates of around 2 percent. The properties will go on distress sales due to job loss or non-availability of rents. Buying a new house from the builder is out of reach, as the market is flooded with resale and distress sales.
The best example we get to see is on monster.com that has introduced a category of "COVID impacted" profiles. Already there are 18 lakh COVID profiles resumes in their portal. So, 18 lakh IT professionals have lost their job and selected "COVID impacted" option.
How to safeguard their future?
1. Avoid unnecessary expenses
2. Avoid loans
3. Save as much as possible by avoiding taxes.
Saving is no more a desire but need of the hour to survive recession... Yes, you read it right! Recession for the next 3-4 years...Technology is the way forward...