Financial services industry struggles to emerge from lockdown
Companies that quickly closed their offices following the national coronavirus emergency declaration on March 13 are planning to reopen with similar vigor — unless, of course, an increase in COVID-19 cases forces them to retrench again.
Almost six out of 10 employers say uncertainty is styming their plans — specifically, a lack of clarity on the right timing, and persistent questions about how to provide a safe environment for employees, according to new research this week from Arizent, the parent company of Financial Planning, American Banker and other titles.
The coronavirus has infected more than 2.9 million Americans (over 11.6 million globally), forcing many companies to operate in a remote environment. And with new coronavirus hotspots emerging in recent weeks, employers may have to reevaluate based not only on office needs but also the health and needs of employees.
About half (48%) of employers tell Arizent they are now in the process of reopening closed offices, and an additional quarter (27%) say they expect to do so in the June-through-August timeframe. Even so, some firms are reevaluating their pre-pandemic real estate holdings, questioning how much space they will need going forward or how that space will eventually be used.
For those executives who believe that office life will somehow return to pre-pandemic norms, there is the specter of government mandates that could squash those hopes, along with a possible second wave or resurgence in COVID-19 cases. In contrast, some envision a new approach for future office environments.
“Offices will be a place to meet and collaborate; not work,” said one payments company executive in survey comments.
It’s not just employers who are grappling with the remote work environment and a return-to-office strategy. Employees, too, have an interest in these plans as some face challenges when working remotely and say they'd prefer to be in an office.
“Keeping my work schedule from crossing over into personal [is a challenge]. I found that with being able to work remotely, I’ll work day and night,” said one professional services executive.
How to do it
Fifty-nine percent of employers have closed some or all of their offices on a temporary or permanent basis in response to COVID-19. Organizations with over 1,000 employees report a statistically significant higher closure rate (81%) than smaller companies (51%) with fewer than 100 employees, at a 95% confidence level.
Large employers and medium-sized employers who had closed offices say they are planning on taking a more thoughtful approach to reopening, when compared to smaller employers (fewer than 100 employees), who stated they would reopen all at once.
From a timing perspective, almost half (48%) of the employers who have closed some or all of their offices say they are currently in the process of reopening them.
Just over one quarter expect to reopen between June and August while 12% reported it would occur between September and November. Just 3% said they wouldn't return until December through May 2021. About 10% are still unsure.
One quarter (25%) of all employers reported a more cautious, wait-and-see type approach by reporting reopening dates of September and later, as well as not reporting a date at all (not sure yet). This caution may prove to be a rather prudent position should there be a resurgence of COVID-19 cases, as it appears may be happening in many Southern and Western states, including the three most populous states in the U.S. — California, Texas and Florida.
Even in hard hit states that have shown a recovery, such as New York and New Jersey, their respective governors have begun to put the brakes on the reopening process, as cases in those states have recently spiked.
Overwhelmingly, 92% of employers who had closed offices reported that they would bring back employees on a “phased in” approach, and only 6% stated it would be an “all at once” effort.
About half (47%) of larger firms (1,000+ employees) reported to be currently in the reopening process or preparing to do so in the June-to-August timeframe, with the balance (53%) having reported to wait until the fall of 2020 through May 2021, or are unsure as of a reopening date.
One unique challenge facing larger organizations, particularly companies with significant retail footprints such as call centers and branches, is whether they will need a physical location going forward.
Changing the office?
While more than half of all employers aren’t planning significant changes to their office configurations, there was a major difference among large and mid-sized companies who have more employees and a larger real estate footprint wanting to make changes.
One-third (33%) of larger firms reported an interest in significantly downsizing their physical space going forward — a statistically significant finding when compared to mid-sized (9%) and smaller (14%) firms.
Further, planned changes to the configuration within the office space were reported at a statistically significant higher level at large (24%) and mid-sized (25%) firms than at smaller (6%) firms. This is more than likely due to larger organizations having higher density levels of people operating in closer proximity than in smaller companies.
For those planning to make changes to their office space locations, the top solution was reducing the capacity for meeting areas such as conference rooms or kitchens. Other popular solutions were reducing the number of desks and individual work spaces and adding plastic barriers.
When it comes to deciding how and when to resume normal business activities, there are some key challenges for employers, namely uncertainty regarding the timing of returning to the office, establishing new safety measures within the office environment and employee reluctance to return to work for fear of getting sick.
Employers are weighing employee feedback (30%), risk avoidance (21%) and cost reductions (13%) as key drivers in influencing their decisions.
Work from home — forever?
Many employers are facing the reality that the work-from-home experiment may become a more-permanent solution.
“We expect 50%+ [of] team members will permanently work remote,” said one retail/commercial bank executive.
A majority (73%) of employers of all sizes are likely to allow employees to work from home permanently — if their position allows it.
Of these companies, an employee’s functional role or department was a top factor to determine which employees should have the option to work from home on a permanent basis.
The Arizent survey was conducted June 12-22, 2020, across an array of sectors including financial services, wealth management and professional services. There were 430 respondents — 175 of whom were C-level and senior managers with decision-making abilities over return-to-work plans, and 225 of whom were employees.