Work from home forever

As countries across the world limp towards reopening their economies, it is big business that will have to take the lead in determining what post-pandemic workplaces will look like. The fact is that small businesses will not be able to afford to experiment; individual workers do not have the power to impose their preferences; and governments have too much on their plate dealing with managing public spaces to frame new occupational safety rules. It will be large corporations with equally large offices and workforces that will have to decide.

One sector that is already dealing with how to manage this is finance. London and New York, the capitals of global finance (with, arguably, Hong Kong) were among the earliest hotspots for the novel coronavirus, and thus finance was among the first sectors to have to adapt to lockdown circumstances. It has had some odd effects on productivity. In India, for example, the bond markets thinned out in terms of volume at precisely the point when market signals became particularly important. (Traders’ persistent suspicions that the RBI is intervening in this market are perhaps borne out by the visibility of specific trades in such a thin market.)

Yet some major deals went through regardless. Telefonica SA from Spain and Liberty Global plc in Colorado managed to pull off a major merger of their telecommunications assets in the United Kingdom; the $39 billion deal, reported Bloomberg, went through during the lockdown although the executives from both sides last met in London on March 11, the very day that the World Health Organization declared that Covid-19 was a global pandemic. Executives and financial advisors fell ill, worked from their garages or their dining tables, but nevertheless got the merger through.

The more such breakthroughs happen in spite of a work-from-home environment, the less like the past the future will be. Companies and executives who were sceptical of work-from-home productivity will be forced to adjust their expectations. According to a PricewaterhouseCoopers survey published in the Financial Times, that is in fact already happening. Chief financial officers asked what their companies are planning to implement once they transition back to on-site work continued to highlight “safety measures and requirements at the workplace”, and “reconfiguring work sites to promote physical distancing”. But, between April and May, only two of the options on offer gained greater acceptability at the expense of the others: “make remote work a permanent option for roles that allow it”, and “accelerate automation and new ways of working”.

For finance in particular, addicted to skyscrapers that are nestled together and quiet lunches where information is shared, the changes will be brutal. Skyscrapers are particularly problematic, given the dangers associated with aerosolised viruses in elevators. Barclays’ CEO has already said that “putting 7,000 people in a building may be a thing of the past”. Goldman Sachs’ current plans for reopening its offices, even in Asia, plan to take the company up from its current 2 per cent of staff in offices to 20 per cent and to stop at half. The rest may not come back to work in the foreseeable future — if at all. Enormous snack bars in atriums where ideas are exchanged over free coffee and sandwiches are gone; hot-desking is similarly disallowed.

It’s worth watching who comes back to work in finance and when for clues as to what can work remotely and what can’t. Traders may discover that a Bloomberg terminal in their garage is in fact more productive and quiet than one on a noisy trading floor when nobody is really shouting anything of relevance to you. On the other hand, the deal-makers may be the first back, given that so much of their work still depends on trust, charisma and personal acquaintance. Not that that is a good thing necessarily. The closer that deal-makers or even investors are, the less is imaginative thinking rewarded (recent research from China by Jian Li et al showed that “mutual fund managers with an alumni connection tend to have similar portfolio allocation…  The performance of connected funds is worsened by the degree of the connection”). Other research has shown that returns to clients decrease with the intensity of previous connections between their financial managers.

The implications, of course, stress beyond finance. Many jobs that can be effectively performed in peace and quiet in front of a computer screen will be efficiently done remotely. Conversations that can be entrusted to secure communications channels — the Bloomberg terminal’s messenger service performs that role for most of finance — will no longer need to be face to face. Offices will be sparer, and include more private space. Contrariwise, employees may well be expected to be on call at almost all times — much like the standard Indian approach to the workday.

These will not happen because of the pandemic, but because the response to the pandemic will have brought home some things that were already obvious — many people in offices do not need to come in, more measurable work indicators are better than whether your boss thinks you look like you are putting in effort, and meetings take too long. You just have to feel bad for the real estate people. Residential properties have struggled for long enough, and now they may have to worry about commercial as well.