While employees are obviously happy, employers feel that in these times of high attrition rates, such an option helps in retention. Along with a good pay package and growth opportunity, employees these days are increasingly looking at work culture of a place before deciding on a job.
According to an official at Microsoft India - which offers the WFH option - a better work-life balance is a cause for retention and also "an attractive aspect for potential employees".
Other IT giants, like IBM and Dell, also offer this option to their employees.