Right now, every month brings with it another multinational company affirming their commitment to permanent remote work, from Twitter telling their staff that they can work from home “forever” to Pinterest cancelling their almost half-a-million square-foot lease in San Francisco. At the time of writing, the most recent public revelation was from Standard Chartered, which announced that more than half of their 85,000 employees would be allowed a choice of workspaces, including an option to “work near home” in convenient flexspace, with plans to roll this out to almost all of their staff by 2023.
This decision was dramatic for a couple of reasons. Firstly, unlike many other companies, Standard Chartered isn’t just giving staff the opportunity to work from home: they are the first to announce a massive use of flexspace. Secondly, unlike the many Silicon Valley companies announcing shake-ups to their real estate portfolio, banking has traditionally been far more cautious about remote work.
Over the last nine months, many column inches have been devoted to the benefits of remote work. But perhaps less attention has been paid to how this has specifically impacted the financial services industry. Yet the changes within this industry have been among the most significant. Prior to COVID, only 17% of finance and accounting professionals in the UK worked remotely once or more a week – half the national average.
Despite this previous reluctance, it has been adopted wholeheartedly by many in the industry – and it looks set to permanently change the way they work: in a recent PWC survey, 7 out of 10 financial services employers in the US said that they anticipated that 60% of their workforce would work remotely for at least once a week.
It’s also something that employees want: 86% want to continue to work from home for at least part of their working week post-COVID.
There are a number of reasons why remote work has been so enthusiastically adopted by the industry. For employers, they have discovered the financial benefits of having staff work from home. The majority of bosses (69%) say their teams are as productive or more productive than they were working in an office – leading many to question exactly whether expensive offices are really worth the money.
But this isn’t just about a better bottom line. At a time of great employment uncertainty, for some companies it can be a case of choosing between people’s jobs and pricey real estate: according to the Financial Times, Virgin Money is considering whether its back office staff should work from home most of the time, which might help save jobs when they shut offices in Leeds and Norwich.
Then there are the environmental benefits to consider. Most businesses are now being judged on their environmental commitments as well as their financial success. While financial services is not a polluter on the scale of some industries, being an employer to many people – many of whom have to make long commutes to a centrally located office – means that the sector indirectly contributes to a lot of pollution and carbon emissions. Encouraging staff to work from home dramatically reduces a company’s carbon footprint.
For employees, the commute is one of the main reasons they want to avoid returning to the office – and with good reason: the average British commuter spends 492 days and £135,871 on commuting over the course of their working life. There are several other financial benefits to remote work, as employees save money on everything from overpriced sandwiches to new work suits.
Tellingly, the second reason that financial services staff want to keep working remotely is so that they can work more flexibly, according to a Deloitte survey. More than 40% of those who have enjoyed working from home said they had valued the increased flexibility. Overall, working from home can greatly boost employees’ wellness, leaving them more time for friends, family and hobbies, as well time for eating, sleeping and exercising, which has a knock-on positive impact on their physical and mental health.
However, as anyone who has worked from home over the past year can attest to, it isn’t all home cooked family lunches and long walks with the dog. As work has become a physical part of the domestic sphere, employees have struggled to clock off at the end of the day and to keep their work and personal lives separate. For all its issues, the commute did signal a physical and mental transition to and from work.
This feeling is backed up by the evidence: the National Bureau of Economic Research has found that the average working day has increased by 48.5 minutes during lockdown – equivalent to two whole extra working days a month. When people can’t show they are working through their physical presence in the office, they are instead judged on the work they have produced, perhaps leading them to put in additional hours.
In addition, many financial services staff say that the division between work and life has grown blurrier, with 1 in 4 saying that if they continue working from home, they will need clearer rules on when people are supposed to be working.
All of this has implications for staff burning out and for employees struggling with mental health issues.
This situation can be compounded by the fact that staff may be struggling without the structure of the working day or the social interactions with colleagues. Psychologists have found that the number of interactions we have a day predict how strongly we feel a part of a community. Without this, it’s easy to struggle with loneliness and isolation.
Added to this is the fact that work from home disproportionately affects certain groups, most strikingly those early in their careers and parents. Younger workers are more likely to live in flat-shares where they might not even have space at the kitchen table to work, let alone a dedicated home office. They may be competing with others for internet access or private space to make calls. This impacts on the quality of their work as well as their individual happiness. And this is no small problem: in 2017 almost one third of American adults lived in shared households, defined as a household with two or more adults who are not in a relationship.
In addition, those early on in their career are most likely to need the office for the informal relationships that are developed there. Working alongside colleagues is how they learn about the company culture and how to do their job; it’s a lot easier to ask questions to the person sitting beside them than by sending off an email. Above all, in-person interactions are the best way to develop a network of contacts that will help them as they progress through their career.
Meanwhile for parents working from home can mean juggling parental responsibilities and a full-time job. This is particularly pronounced for those with young children. Although cute Zoom interruptions by kids too young to know better became something of a hallmark of lockdown, this is not a sustainable situation for working parents. The burden fell disproportionately on working mothers, with the Office of National Statistics reporting that they were only able to get one hour of uninterrupted work done for every three uninterrupted hours their partner worked. This is a particular problem for the financial industry where gender equality is still a long way off: women make up only 17% of Financial Conduct Authority approved individuals, a figure that has shifted little in the last 15 years. By leaning into home working for all, companies are a risk of only further exacerbating the gender imbalance.
Finally, remote working makes it difficult for everyone to collaborate. No matter how productive you might be working by yourself at home, everyone can agree that meetings of any degree of complexity are much harder through the medium of video call. If only for this reason, offices need to be a part of the world of work going forwards as a space where people can meet and collaborate.
The obvious solution to this problem is hybrid working, whereby employees work from home one or two days a week and in the office the rest of the time. This allows colleagues to come together to collaborate, as well as have an opportunity for social contact. Physical workplaces help people to restore a sense of work-life separation and unplug as they leave the office.
Yet this solution does not solve the problem of those who struggle to work from home at all, such as working parents, early stage career employees or those who need a physical office for their mental health.
All of which brings us back to Standard Chartered. Rather than just rely on the hybrid model of work from home and a central office, they are also giving employees the option to use “near-home offices” by working with flexspace providers. Flexible workspace means that the company does not have to maintain or run the space, but can instead rent as much or as little space as they need, even down to a single office work desk for one employee.
Like moving to a working from home model, this will enable Standard Chartered to end some of their longer-term real estate leases as they will require less central office space. This reduction in costs is likely to save money, even with the costs of flexspace memberships for staff.
However, it will also solve many of the issues with working from home, while retaining the advantages.
Using flexible workspace enables teammates to meet up in a convenient workspace, rather than all having to travel to the main office if they want to work together.
It also provides an alternative to employees who don’t like or can’t work from home, while at the same time eliminating the hated commute, saving employees time and money and reducing carbon emissions.
As many companies rush to downsize their office space and focus on work from home, they prioritise short-term savings while failing to think about the longer-term impact of this way of working. Companies that don’t address these problems now risk storing up issues for themselves in the long run.
Standard Chartered’s use of flexspaces is not just a compromise between using corporate headquarters and work from home. This represents a genuine alternative to both of these ways of working, taking the best of both options, while eliminating the negatives. Above all, it puts staff at the centre of the decision-making process: they are able to choose the workspace that works best for them.
The financial services industry is made up of many different roles, sectors and types of people, at different stages in their career. If working from home for the last nine months has taught us anything, it is that people live in very different circumstances and will react very differently to working from home. We should now apply this learning and rather than trying to enforce a one-size fits all approach, give employees options to suit their many and varied needs. Standard Chartered’s new way of working shows one way of providing this choice to its employees while still benefiting from the cost savings of remote work. It’s not the only solution and there are a raft of options, from turning corporate headquarters into hubs for meetings, to using on-demand desk booking tools.
As remote work continues to be a part of the financial services landscape, it’s likely we’ll see many other companies following in Standard Chartered’s footsteps and choosing a third way.
About the Author
Michael Cockburn is the co-founder and CEO of property technology company Desana. Desana is partnered with some of the world’s largest flexible office space providers, commercial property agents, and workplace consultants to respond to the evolving needs of enterprise companies’ real estate strategies.