Does it matter if an IT worker puts in 72, 90 or 120 hours a week?

What is the magic number of hours that an employee must put in to be considered “truly productive”? Is it 72, 90 or 120 hours?Employee productivity has dominated the news so far this year. Infosys founder NR Narayana Murthy kicked off the debate with a statement that employees should work 70 hours a week. He was soon topped by L&T chairman SN Subrahmanyan, who said that employees should work 90 hours a week. Not to be left behind, startup world doyen Bhavish Aggarwal chimed in, stating he supported those statements because he worked 120 hours a week.Gen Z employees, the most assertive online, struck back. They intend to ‘act their wages’ and want to be paid more if they are expected to work more, a sentiment that sensibly should be shared across generations.To be fair, Gen Z is right. Real wages for salaried employees are now lower than the pre-pandemic salary levels.So, the big question is, will juicing out employees really drive revenues?The best place to start is the IT services industry. This industry now brings in more than $150bn in foreign exchange earnings for the country and employs more than 1mn people. Officially, these employees work 45 hours (nine hours per day for five days). If they work more than 70 hours, will it increase revenues in a significant manner? Let’s find out. medium nocaptionhttp://youtu.be/BCU_OnZ8rDI?si=i5JOUiL-N941gvgXThe tyranny of wage growth in IT servicesReal monthly wages for both male and female regular wage/salaried employees in 2023-24 were lower than the salary level in 2017-18, as per data from the Economic Survey 2024-25. The data also shows that real wages have been largely stagnant over the past four years. This is even though corporate profits have hit a 15-year high.“Among Nifty 500 companies, the profit-to-GDP ratio surged from 2.1% in FY03 to 4.8% in FY24, the highest since FY08. Large corporations, especially in non-financial sectors, significantly outperformed their smaller peers in profitability. However, while profits surged, wages lagged… Wage stagnation is pronounced, particularly at entry-level IT positions,” the Survey noted. A higher corporate profit share and stagnant wage growth also risk slowing the economy by curbing demand.India needs to create an average of 7.85mn jobs annually in the non-farm sector by 2030 (as per Economic Survey 2023-24 estimates). This means that the present set of employees has negligible bargaining power against the mighty corporations. Employees in the IT sector are now particularly vulnerable due to the advancement of artificial intelligence (AI).Several researchers have now conclusively shown that employees do not immediately benefit from the productivity and profitability gains associated with technological advancements. Squeezing more work out of employees, in terms of higher working hours, is unlikely to benefit the companies even though it could lead to higher profitability. medium119519983A short history of wages through timeThis has been a historical trend as well. During the early stages of the industrial revolution in the 18th century, wages frequently lagged increases in productivity.“These transitions were also protracted, as it could take decades for displaced workers to find alternative livelihoods. The first industrial revolution exemplifies this dynamic, with workers who were laid off facing sustained unemployment well into the 19th century — a period known as Engels’ pause,” the Survey noted, adding that “protracted labour displacement is something that a labour-surplus country like India cannot afford. Our primary challenge is the challenge of numbers.”For a country whose problem is absorbing ever-increasing numbers in the workforce, the debate over whether we need to raise working hours beyond normal is the wrong one to start with. Such a move could severely deter employment opportunities for entry-level workers.So, in the spirit of adding to this debate and, in honour of Murthy’s seminal role in creating the Indian IT industry, ET Prime takes a look at how IT companies have improved their productivity, given that the sector is crucial to the Indian economy as a large source of foreign currency inflows.Increasing employee working hours alone cannot boost output as Nobel Prize-winning economist Robert Solow’s pioneering work showed because it is the total factor productivity (TFP) that matters. medium119520025At the macroeconomic level, if an economy increases its total income without using more inputs, or if the economy maintains its income level while using fewer inputs, it is said to enjoy higher TFP. Solow showed that as investments in capital have diminishing returns, TFP advancement is the only possible source of sustained growth in per capita income. Slowing TFP can severely impact growth at the economy and firm level.In an April 2024 paper, the International Monetary Fund (IMF) argued that TFP growth has slowed around the world since the 2008 global financial crisis. In low-income developing countries, it has come to a virtual standstill in recent years. Falling TFP accounted for more than half of the decline in economic growth in advanced and emerging-market economies.But despite their advantages and claims of automation, IT companies have a dismal record at growing revenue per employee. The outlier HCL Technologies has grown more than its rivals partly because of its software division, created by buying software assets from IBM for about $1.8bn. The software and products unit now has an annual rate of more than $1bn.If this is all IT companies could achieve with an ‘official’ 45-hour a week schedule, what does the industry hope to achieve with a 90-hour work week?With inputs from Priyanka SalveLead image and graphics by Sadhana Saxena