Remote labour isn’t working
Investment banks are still figuring the best way to run their shops since the return to offices began. A hybrid system of remote and office working is inevitable but the balance is important — running a twin-speed business benefits no one
Almost two and a half years on from the beginning of Covid lockdowns — the biggest change to working practices in the financial markets since perhaps the invention of email — and with most of the big market hubs operating without restrictions, investment banks are still feeling their way over where best to base staff.
For an industry famous for the toughness of the working conditions it imposes, it might surprise some to know that firms have not reached a comfortable balance between offering flexible working and going back to what has worked traditionally across the Street for decades.
But one thing is clear, letting staff dictate the hours and location of their work creates inefficiencies and does harm to both the firm and the employee.
Being away from one's main tribe of colleagues physically or temporally creates a problem of productivity and engagement. It's a simple and self-evident fact that if two employees are sat together on the desk they will interact more easily than with a third member of staff working at home, or one who wants to log on at odd times.
In a market where speed and efficiency of communication is the very essence of the job, those not close to the centre quickly become peripheral, in effect creating a two-speed business.
It would be an oversimplification to dress this difference of opinion as a debate between generations, even though you certainly get the impression that management — older, often male — would like staff back in the office, while it seems, on the whole, to be the juniors that want the flexibility.
There is a feeling that when talking to senior bankers, there is rarely a discussion about where to work from — they accept, by conditioning or considered judgement, that the office is often best.
But many junior bankers do not feel the same and they have some input. For a start, the social climate would not beam sunshine upon what looked to be oppressive management.
Secondly, over the last two years, banks have struggled to find enough experienced juniors to cope with deal volumes, so they have needed to make themselves attractive employers.
Thirdly, plenty of those juniors will have spent formative times working at home during periods when it could not be argued the markets didn't function because of remote working. If hours on the trading floor is what elders know, WFH is what youngsters know.
On top of this, since Brexit entire teams of syndicate and DCM staff have been shipped out of London to the EU; yet this has not seemingly had a bad effect on market function.
But 'market' is the key word in this whole debate and this is why applying a gig economy, digital nomad approach to working in investment banking does not really work for the collective.
The capital markets are, to paraphrase the Oxford English Dictionary, "a regular gathering of people for the purchase and sale of [in this case, securities]".
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This is what those with years of experience know. In some cases, no doubt overzealous managers want staff in line of sight for reasons of control-freakery but on the whole, managers want their desks to perform so that everyone gets paid and keeps their jobs.
A workable solution that lets everyone benefit from some flexibility but also from working in proximity to colleagues would be to allow Fridays to be worked from home, when deals are less likely, or to allow one day a week for out of office work with the day agreed in advance with management if need be.
It is hard to think what the long-term downside of that would be. Banks should not be shy to demand that staff come into the office when required, first of all. While some in the industry admit that it is not perhaps the sole career ambition of every top graduate these days, it still attracts more applicants than it can employ, so it should not be afraid to dictate terms. Frankly, it will help select those more suitable for the demands of the job in the long run.
But this is not just about getting the junior cohort into line. There are benefits for them to. Those that show up will, of course, be made to work hard but that is the nature of the industry.
What they will also gain is a faster pace of learning as they master their trade; the camaraderie that shared experience generates; and maybe even some deep, lasting friendships along the way. They will also be in literal line of sight when work and subsequent promotions are handed out in a way that simply isn't possible when you're the only one on the desk stuck on a Zoom call peering around a cat with no sense of discretion and a thing for keyboards.
The truth is that no model of working is perfect for employee and employer. But the experience of the last two years has shown that there are many more benefits to working closely together than might have been thought in 2020.
Banks need to be clear in their messaging about what their capital markets businesses require to work at their best but also the benefits this offers to those who work in them — and when this winter that may even include the provision of heating and affordable food, what's not to like?