Staff preference is for small, rural offices: Sridhar Vembu


About 70% of Zoho’s employees want to work 2-3 days in a week in an office setting, says its CEO

Zoho Corp., which builds software for businesses, is creating a cluster of small rural offices that could each house about 25 people, so that no employee would need to travel more than 10-20 km. This model will be replicated in other districts and States, said its CEO Sridhar Vembu. Excerpts:

Zoho was among the first companies to ask employees to return to their hometowns even as the pandemic was beginning to set in. How did this come about?

It was more a precaution. I felt that it was clearly China followed by Italy that were affected by Covid. China, of course, already went through a serious crisis and I realised it was only a matter of time before it arrived in India, because in this globally connected world, it is impossible to keep all these out.

Most of our employees came from smaller towns. [So when they went back], we probably saved quite a few infections from coming up as they were in less crowded places.

You were planning to open some regional centres. What is the status?

Lockdown is over, but the virus is not. For us, everybody is working from home. We have not actually opened our offices. Though, we have started some rural initiatives like small offices where people assemble and work together; we are slowly experimenting with the small rural office concept. We have opened two so far. These are each, sort of 23 seaters. And we have provision for about 20-25 people.

These are simpler places in which to work, and will not have air conditioning (AC) because when you are in an AC building, recirculating the air would mean circulating the virus around you.

How many such centres do you plan to set up?

We are opening about 6-7 in Tamil Nadu and one each in Kerala and A.P. in the next two months. That’s the current statistics, but in a month, it will change. We are slowly identifying more locations. It is not an idea imposed by the company. It is a group of employees who suggest that they would like to work in a particular area; then we identify a suitable rural location to set up office there.

So you’re leaving the option to your employees…

Well, because the idea is from our employees spread all over Tamil Nadu, Andhra Pradesh and Kerala. Most of them have left for their hometowns and working from home right now.

We did a survey to find out where our people are. Based on that census, location and data, we are putting up regional centres, say in a cluster that has hundred people or so. These regional centres will have their own office and we will set these up We will take up an existing building and convert it into an office. This way, we can actually move in within 2-3 weeks.

What is the distance a person would need to travel given there is no public transport?

We are not actually forcing anyone to work from these offices right now because the work-from-home will continue; but a lot of people have expressed a desire to work from an office due to lack of space or too much disturbance at home.

Typically they might have to travel 10-20 km. At least 70% of our employees want to work from an office, at least 2-3 days in a week if not every day. My expectation is that work-from-home will remain a major component. But it won’t be exclusively work from home because you need face-to-face meetings.Right now it’s only a kind of watch-and-learn mode. Like, let’s set up the small office and see how this goes and then we’ll expand the experiment to more rural locations, more districts and more States around India.

How much does it cost?

We are talking about ₹9 per sq. ft. We might spend about ₹30,000 in each location in rent and then other expenses totalling ₹1 lakh a month.

What happens to your office space in Chennai?

That will continue as the natural growth of the company continues. We are still growing and I assume we will be hiring in Chennai; we are also building a hospital that would take up some of the space. So, it is not like we had a lot of excess space. We were always space constrained before, so the space will become a little more available to us.We still would have 4,000 to 5,000 people working in Chennai, whenever we are able to reopen the office. Currently, we don’t have plans to reopen the facility till the year end and don’t want to cause another wave of coronavirus or something. We are studying the situation month to month.

What is the hiring plan for this year?

We had a kind of a freeze for a couple of months and we are hiring now, but slowly. Probably, I will hire 300 to 400 people this year. We are growing as a company, but there are other concerns. The global economic system is not in great shape when you look at the U.S., Europe, Japan post-corona. A series of debt and economic challenges will keep global growth subdued. Globalisation itself raises serious threats. So those are the risk factors ahead, which is why we are also conscious about how fast we realistically expect to grow in this environment.

How has business been in the first quarter?

Our business has definitely not been as great as the previous years but considering the circumstances, we have been holding up reasonably. So, our business is more steady than a complete washout and it’s why we were able to stand by our customers with the ESAP program and emergency subscription assistance programme. We still continue to support the heavily impacted customers though the numbers have come down. More companies are returning to paying us, but we were able to extend all these as we were strong.

What is your IPO plans?

We don’t have any IPO plans. We are going to stay private. We are happy being private and we are growing. Why go public?

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