We should not be surprised by reports that banks in particular are “encouraging” trading and sales staff to return to the office – in spite of what looks like strange timing given the rise in COVID-19 cases in the Northern Hemisphere over the past few weeks, there is no getting away from the fact that too many institutions see the current working arrangements as a ticking operational and compliance time bomb.
I was speaking with someone last week who quite simply observed that the working from home framework “cannot go on” because in spite of the advances in technology, managers like my conversant had limited “visibility” on what their teams were doing. This is not a question of trust, I should stress, merely that my conversant was asked questions by their boss, who in turn was being asked by theirs, sometimes the Board, and they could not give the answers with any degree of confidence.
The fact is, the regulatory world we have created has meant that a dispersed workforce will always be a significant challenge – how can you fulfil the needs of a tick-box society when you have limited access to the information and have to put your cross in the box or sign a statement with perhaps 80% confidence?
Someone else I spoke with last week thought this was not a compliance or operational issue, however they struggled to answer when I asked why the sales teams were also being encouraged back? After all, face-to-face sales visits are still a no-no, so why do sales people need to be in the office if not to check that they are doing their job properly and helping to cultivate the culture of said firm?
The reaction of people in the trading business has been interesting. According to yet another of my highly unscientific straw polls, most traders I have spoken to are happy to return, albeit under certain conditions. They talk of the struggle to build and nuance trading ideas and the working out the broader markets picture when sitting alone in a room at home and I can see how that would be difficult. After all – and I know the skill levels are often vastly different but the environment is just the same – isolation is a significant factor in many retail FX traders’ inability to make money, why should we think it will be any different for an institutional trader?
The fact is, as a trading friend of mine observed more than a month ago, ideas simply aren’t getting shared and, especially when markets are quiet, the incentive to establish a position dwindles without some encouragement from work colleagues around you. I am sure some old school thinkers will see this as highlighting how the traders of today are not as good, or brave, as they were in theirs, but the old school never had to deal with this type of environment. Moreover, I would point to the number of bank FX traders that went to the buy side in years gone by and simply failed because they couldn’t handle the different environment – yes several made a great career for themselves in the hedge fund world, for example, but for every one that did there are several that didn’t. Whichever way you look at it, sitting in a room on your own – even with the latest technology – is a tough gig for anyone seeking to trade markets.
So it’s not such a bad thing for the staff, who are missing someone to bounce ideas off and read their body language, but there are other considerations as well – I think people are getting stale and the novelty is wearing off. When the WFH environment first really kicked in, I was speaking to a lot of people lauding the fact they didn’t have a two or three hour return commute every day. This is, without doubt, a productivity bonus, but as the summer advanced the conversation started turning to the fact that they never switched off. This is an issue at the best of times thanks to mobile devices, but when a desktop is established at home, it becomes much worse – suddenly even a commute offers some respite.
Of course, this is all predicated upon one rather important factor – the ability of the institution to adequately protect their staff in terms of social distancing at work and on their journey to the office. If infection rates spike again, as is, sadly, looking likely, how can an institution really ask their staff to travel on what could once again be crowded public transport? Not only is this unfair on staff members, but it runs a huge risk of an infection running through the entire office building.
I suspect, hope, in time some will look back upon the working conditions during the summer of 2020 as an aberration. For some in our industry WFH has become a very viable way of life and it may not end anytime soon, but I suspect for the majority it will. This means that the institutions have to instigate an entirely different working structure, one where teams are divided to provide a degree of protection from outbreaks, but one where all, at one time or another, come into the office.
I don’t think home offices will be closed anytime soon, but perhaps the desktops will start to gather more dust, and therefore, if I am right, then rather than an aberration, the summer of 2020 will be seen as a catalyst for a new business model.