The End of Work-Life Balance?

Work stress, burnout and work life balance!

(Photo: iStock/altered by the Quint)

Sometime in 2007 – or was it 2006 – an email did the rounds across offices, supposedly written by a revered founder of one of India’s big IT companies. The gentleman was out for his customary post-dinner walk across his company’s sprawling campus when he saw several lights burning in the buildings that housed the IT major’s offices.

This prompted him to write to his employees, telling them that there’s no virtue in working so late. No one, he argued, could be productive beyond eight hours a day, and if they used their 9 to 5 judiciously, they would easily get all tasks completed within those official hours.

The email spread anonymously across the country, being shared by employees of one company to another. It was as viral as anything could get in those pre-social media days.

It reached our newsroom as well, and we tried to guess who the author of the email might be.

Some said it was Narayana Murthy. He was rumoured to have been a socialist in his youth, and was probably influenced by the old worker’s slogan – “eight hours for work, eight hours for rest, and eight hours for what we will.” Others said it couldn’t be Murthy, since he didn’t live on the Infy campus.

If there were any lingering doubts, Narayana Murthy has dispelled them. He has not only spoken in favour of a 70-hour work week but now says that he was “disappointed” when India introduced the 5-day week in 1986.

The IT icon is not the only one who has started promoting the virtue of long working hours and dismissing the idea of work-life balance. Bhavish Aggarwal, the fiery founder of Ola, even questioned the convention of having weekends off. “It is a Western thing,” he said in English. “In India, we never had Saturdays and Sundays.”

Aggarwal’s views would find many takers in the startup world, where employees put in very long hours for the possibility of high monetary rewards. Some founders have now decided to make their stand public in the name of transparency.

One such is Daksh Gupta, co-founder of greptile AI, who recently tweeted that he tells job applicants that his company “offers no work-life balance, typical workdays start at 9 am and end at 11 pm, often later, and we work Saturdays, sometimes also Sundays.”

Why are both senior corporates and young tech bros suddenly saying so much about how long employees should work? It is the economy, stupid.

To understand that we need a quick primer into how capitalism works.

Before a business can make money, it must invest in two key things – capital and labour. The profit it makes depends on how efficiently it can utilise these two ‘factors’ of production, in combination with each other.

There is very little leeway when it comes to capital; its efficiency is more or less determined by the level of prevalent technology. For instance, a machine that packs 1,000 boxes an hour, cannot be made to do more than that. One could run it for longer, but that would make it wear out faster. A machine might have to be replaced after running for 10,000 hours, whether you operate it for eight hours a day or 12.

Workers, on the other hand, have no such limitations, especially in types of work where there is little physical effort. A person sitting at a desk can work for 12 hours, instead of eight, without any significant change in their productivity. Nor will they need more food to sustain themselves.

So, making employees work longer has, historically, been the easiest way to cut costs, and improve profits.

For instance, imagine that a company needs 336 hours of labour time a day to fully meet the demand for its products in the market. If everyone worked for eight hours, the firm would need 42 workers. If people could be made to work 14 hours a day, then just 24 employees would do.

The wage bill would drop by 43 percent, and it would do wonders for profit margins.

Of course, if a company started extending work hours, while others stuck to an 8-hour workday, all its employees would quit. It could still hold on to them, by offering slightly higher salaries.

For instance, in our previous example, instead of paying Rs 50,000 for eight hours, the firm could offer Rs 65,000 for 14 hours. This would attract many workers, who would be willing to work longer for higher pay. And, despite paying higher salaries, the company would end up saving 26 percent on its labour cost.

Such a company – which pays more for longer hours – would soon be able to price its competitors out of the market thanks to its lower costs. The only way others would be able to compete is by switching to similar hiring policies – work longer and get paid more.

The most agile companies would attract the best talent and pay the highest wages. They would gradually price everyone out, take over the entire market and turn into monopolies.

Their employees would earn more but work longer hours in the bargain. But the number of employees in the sector would drop because the longer work day would reduce the need for workers. This would increase the number of unemployed people in the economy.

Of course, the increased wages of the employed workers would allow them to buy more goods and services. So, there would be a small bump in the overall demand in the economy, but not enough to compensate for the loss of demand created by the workers who lost their jobs or people who couldn’t get employment.

The labour market would become a buyers’ market. People would now be willing to work for less. Instead of paying Rs 65,000 for a 14-hour workday, the company would now be able to hire people for Rs 60,000 instead.

This is the ‘normal’ way in which capitalism works. Mostly.

The exceptions are times of easy money and low interest rates. When companies are able to raise funds at a very low cost of capital, competition intensifies again. It becomes much easier to enter an industry that was hitherto controlled by a couple of companies.

A new company entering a sector has to attract talent. If it can raise money at a very low cost – either from banks or from equity investors – it can throw it around to poach good employees from established players. They can offer higher salaries for less work, and even throw in money for family holidays.

The established companies have no option but to follow suit. They too have to increase the wages they pay and reduce the hours that employees are expected to work. Suddenly, the labour market becomes a sellers’ market. Potential employees now shop around for the highest pay and the best working conditions.

The email, purported to have been written by an IT legend in the mid-2000s was a result of such a bubble. Those were the heydays of easy money, where companies ran their businesses not on the basis of their earnings, but on their valuations. They raised money and spent it often at the cost of profits.

That is why, back then, public discourse was all about work-life balance, giving employees flexibility about the hours they worked, and making the workplace employee-friendly.

Today, it is exactly the opposite. Interest rates are high, and even startups are being asked to show a concrete path to profits before venture capitalists and private equity funds are willing to give them their money. This is especially so because, across the world, there are signs of shrinking demand.

There is also AI to deal with. AI tools, available almost for free, are already capable of handling many tasks that used to be done by white-collar workers. And more often than not, AI is doing it faster and with fewer errors.

All companies are being forced to pre-emptively adjust for these trends – higher cost of capital, shrinking markets for goods and services, and the disruptive role of AI in the labour market. So, many among them are already reducing their employee numbers, while they are still ahead in the game, in terms of earnings and market share.

There is nothing cruel or immoral about it. It is an inevitable outcome of contemporary capitalism – cut costs or die. After all, no one goes into business for philanthropy. Those who do, don’t survive for long.

Yet, there are cultural obstacles to increasing the work day. We, especially the middle class, have got used to 40 to 50-hour work weeks. We don’t hesitate to make our domestic help work longer, but when it comes to us, or our children, we are keen to protect our ‘personal’ time.

So, public discourse has to change significantly to normalise the 60–70-hour work week. Or a six-day week replacing the current five-day week. When you see corporate honchos exhorting people to work longer, you are seeing this process at work – a gradual, unstructured campaign to manufacture consent.

(The author was Senior Managing Editor, NDTV India & NDTV Profit. He tweets @Aunindyo2023. This is an opinion piece. The views expressed above are the author’s own. The Quint neither endorses nor is responsible for them.)