From the desk of John Arnesen,
Consulting Lead, Pierpoint Financial
The other week, I took two days off and drove to Portreath in Cornwall, where I stayed in a 'Shepherds Hut.' See photo above. My motivation was that after 16 months of looking at the same familiar surroundings in my dining room, I was desperately in need of a change of scenery. Even the 212-mile drive was therapeutic in that my mind could wander and think about anything I liked. Stopping for breakfast and donning the ubiquitous mask, I started to think about the pandemic, the approaching July 19th end of legal restrictions in the UK, and how personal and corporate life will change.
July 19th is a risk given the latest data of the current rate (I wrote this before July 22nd) of new infections of the Delta variant to end social distancing and reintroduce activities where people are in close contact. Infection levels are bound to record higher numbers. And yet, the mortality rate is relatively low; and vaccinations rates are at the highest compared to similar nations. So, if not now, when? Clearly, we can't wait for the entire country to be vaccinated, which could take another six months, and I was encouraged to see that Transport for London, and I assume other cities will do the same with a continuation of mandated mask-wearing while using their services.
What about the office?
There has been plenty of column spaces in the press filled with a range of sentiments from institutions, CEOs and others promoting a return to the office as a requisite to efficiency to others that are mainly leaving it to individuals to work it out with their managers. The question for me is this; would this debate be happening if the pandemic had never happened? Or, has the pandemic given rise to a psychological shift in the concept of office presence permanently for both employees and employers?
In answering the first question, I don't believe there was enough groundswell of individual demands to change working practices radically pre-pandemic. Almost everyone I know has some ability to work from home (WFH) on occasion, if their function allowed it, but to expect a more permanent practice was frowned upon and would have certainly been a differentiator performance-wise, but not a positive one. Has this attitude changed? Some financial institutions have made it clear they expect all employees back at their desks by September (unless contracted to do otherwise), citing the synergies and creativity that in-person presence tends to lead to and the training of those on internships and junior staff that has suffered over the past year. Some have been more vocal and insistent than others. James Gorman, CEO OF Morgan Stanley, has stated he will be "very disappointed if people haven't found their way into the office by early September" and followed up with a veiled threat of 'different' conversations taking place with stragglers. A US-based publication even stated that less than a five-day-week office presence could lead to dismissal. Others have embraced a more hybrid model; Shopify CEO Tobi Lutke stated that:
Office centricity is over.
To have a narrowly defined policy seems to miss the point that individuals have unique functions, some or many of which do not require office presence all the time. Moreover, employees are more likely than ever to vote with their feet if more flexibility isn't introduced into the milieu. The recruitment firm Glassdoor researched employee expectations and found that 60% cited benefits as a significant consideration when entertaining employment offers, but that those benefits have shifted during the pandemic. Time off, wellbeing support and flexible-working as core benefits were favoured over a pay rise by 80% of employees surveyed.
Another survey of 3,000 employees found that less than 10% want to return to the office full-time when pandemic restrictions ease, and 78% of them only want to be in the office two days a week or less.
Closer to home, here in the UK, almost 50% of 1,000 people surveyed stated they would seriously consider resigning if their flexible working requirements are not considered. That is a statistic that no employer can ignore or do so at their peril. After more than a year without commuting, saving on travel expenses and the nonsense trips to Starbucks, lunches and spontaneous after-work drinks, coupled with more time with children and fewer child care expenses, plus a host of other benefits, it's not hard to see why employees feel and want more control over their working lives. If WFH has led to a more industrious and productive experience, it would be sensible to create a culture in which it becomes an embedded practice offered by employers in the future. The map below shows the current workplace closure situation in Europe. It will be interesting to see how this map looks in six months.
And of equal interest will be to see how the office occupancy rate in New York City will look in six months. If these stats remain significantly low, imagine the cost savings employers could make but also the knock-on impact on commercial property values, landlords and the ecosystem of small businesses surrounding those offices.
A story on LinkedIn from the Wall Street Journal caught my eye the other day. "United and Mesa to Buy Electric Planes for Short Trips" Electric planes? If this becomes a reality, just imaging the contribution this could make to cutting emissions! As mentioned in my recent blog, long haul flying is in the top three contributors to carbon emissions. The article points to short-haul flights, admittedly, but if this electric plane concept comes off, it will make a massive contribution towards meeting emissions targets.
'Flight shaming' is an emerging concept, particularly in Europe. Possibly fuelled by Greta Thunberg's solar-powered sail to New York some years ago, Swedes, in particular, began to use trains far more. While that is quite feasible in Europe, it isn't so easy in the US, where the post-pandemic demand for air travel is increasing. Carbon offsetting or investing in sustainability projects could help reduce the unease or shame fliers may feel. Perhaps I have a too simplistic view of the climate conundrum in that I tend to believe that the onus should be on the output, not on the activity. Combustion engines produce carbon emissions. Fine, let's make electric cars because we are not about to stop driving. The same applies to the aviation industry, develop cleaner fuels or, better still, electric planes. Flying has, however, made me feel increasingly uncomfortable. By the time you are reading this, I'll be sitting on the beach in the picture below, having flown there for nothing more than pure indulgence. I'm not convinced ticking that offset box when booking is enough of an individual contribution.
While thinking about this, I read an enthusiastic announcement from the RMA that the October conference, held every year in Florida (except 2020), will be an in-person event this year. I wonder how this will be received. Through necessity since lockdowns began in 2020, many events, including this one, have been held virtually over zoom or some other medium and have been very successful. ISLA, PASLA, IMN and several service providers have held virtual events, the success of which may have produced unintended consequences. The ability to watch each session from the comfort of your workstation at home and to watch a replay should you miss a session made for a pretty efficient way of attending a conference. I will be the first to argue that conferences are more than panel sessions, and unplanned meetings or introductions to those you don't know well can lead to all kinds of possibilities. So I don't need convincing, but your management might need more persuading than ever, particularly if you are flying long haul to attend. Some hard-nosed bosses might say, 'what did you do last year?' and after your lengthy well-crafted response as to why virtual events are less optimal, you may get 'do that again.'
More progressive managers may well appreciate your need to attend in person, but if they are that enlightened, you may be grilled on your ESG commitments to the environment by flying so far. Given the frenzy to view almost every investment, product and activity through the lens of E, S and G, it may not be your manager that is calling the shots on this, it could be a corporate policy developed around sensitivity to being seen to do their part and a genuine goal to reduce the institution's carbon footprint. Or could it be a timely ploy to reduce costs? If the outcome is climate-friendly, does it matter?
The pandemic changed working practices, perhaps forever. It also demonstrated that businesses did more than get by; many flourished in the face of the worst example of a 'what if?' scenario. A careful reflection of how that was achieved may result in something useful coming out of the awful past year and a half.
While thinking about this, I read an enthusiastic announcement from the RMA that the October conference, held every year in Florida (except 2020), will be an in-person event this year. I wonder how this will be received. Through necessity since lockdowns began in 2020, many events, including this one, have been held virtually over zoom or some other medium and have been very successful. ISLA, PASLA, IMN and several service providers have held virtual events, the success of which may have produced unintended consequences. The ability to watch each session from the comfort of your workstation at home and to watch a replay should you miss a session made for a pretty efficient way of attending a conference. I will be the first to argue that conferences are more than panel sessions, and unplanned meetings or introductions to those you don't know well can lead to all kinds of possibilities. So I don't need convincing, but your management might need more persuading than ever, particularly if you are flying long haul to attend. Some hard-nosed bosses might say, 'what did you do last year?' and after your lengthy well-crafted response as to why virtual events are less optimal, you may get 'do that again.'
More progressive managers may well appreciate your need to attend in person, but if they are that enlightened, you may be grilled on your ESG commitments to the environment by flying so far. Given the frenzy to view almost every investment, product and activity through the lens of E, S and G, it may not be your manager that is calling the shots on this, it could be a corporate policy developed around sensitivity to being seen to do their part and a genuine goal to reduce the institution's carbon footprint. Or could it be a timely ploy to reduce costs? If the outcome is climate-friendly, does it matter?
The pandemic changed working practices, perhaps forever. It also demonstrated that businesses did more than get by; many flourished in the face of the worst example of a 'what if?' scenario. A careful reflection of how that was achieved may result in something useful coming out of the awful past year and a half.