So how much will you really be able to work from home after the pandemic? A lot more than you might think if you work for a European bank.
As some Wall Street executives warn of the perils of working from home for too long, Europe’s biggest lenders are getting serious about using lessons learned in the pandemic to lower costs and afford employees a better work-life balance. They’re changing a culture that has seen few disruptions of this magnitude since modern office buildings were created.
Leading the way in Europe is the Dutch, whose biggest banks predict that staff will be working about half their time from home once the pandemic is over. In Italy, UniCredit SpA plans to have 40% of work done remotely after the crisis, while Switzerland’s UBS Group AG estimates that employees could work from home about a third of the time.
Bye-Bye, Office?
Dutch banks plan with more work from home than their competitors
Sources: Company announcements
Note: Based on estimates described as preliminary by banks and partly calculated by converting WFH days per week
“This is the most radical shift in office life in perhaps a century, certainly since cities started developing financial districts with skyscrapers in them,” said Dror Poleg, co-chair of the Urban Land Institute’s Technology & Innovation Council. “Banks are always looking at ways to cut costs. This looks like a way to do so and banks will take it.”For European lenders in particular, which have suffered from a chronic lack of profitability when compared with U.S. peers, it’s an unexpected opportunity. While leaders of Wall Street behemoths such as JPMorgan Chase & Co. and BlackRock Inc. have cautioned of a loss of corporate culture, some on the continent have already started to cut back on real estate.
“Industries like banking and finance that have been focused on efficiency since the global financial crisis are more likely to be interested in analyzing the impacts of a more remote workforce because it could allow them to drive the next level of efficiency,” said Julie Whelan, head of occupier research at CBRE, at a recent Bloomberg event.
At Rabobank, the second-largest Dutch lender, employees will probably work from home 40% to 50% of the time on average, though the amount “will vary greatly and depend a lot” on the individual’s role, said spokeswoman Margo van Wijgerden. Rabobank plans to conduct experiments with pilot groups to examine what works best for what type of employee, she said.
Culture, Productivity
ING Groep NV sees a similar future. “We envisage that in the future employees on average will spend around 50% of their time working remotely –- in areas of the business where it’s possible to do so,” said spokesman Marc Smulders.
Even though the degree of future work from home will vary, the general trend is underpinned by changing attitudes among both bank leadership and rank-and-file staff. Almost 80% of respondents in an employee survey conducted by Deutsche Bank in April and May said they’d prefer to work from home at least once a week.
The shift toward working remotely goes hand in hand with investments in technology that banks are making to facilitate digital interactions among staff as well as with clients.
No bank is likely to give up offices altogether because they play a crucial role in maintaining morale and corporate culture, especially for new recruits. JPMorgan Chief Executive Officer Jamie Dimon has warned that staff productivity will eventually slip if they work remotely for too long. His counterpart at Deutsche Bank, Christian Sewing, said in an interview on Monday that new hires need to share an office space with more senior employees to grow.
Still, Deutsche Bank recently became the first major European bank to initiate steps to reduce its real estate usage and cut expenses as a result of lowered expectations for future office space requirements.
The new work-from-home reality could also affect office design. ABN Amro Bank NV is looking to turn offices into places that foster interactions such as meetings and creative sessions rather than individual tasks, a spokesman said.
“The office of the future is not a place, it is a network that allows the individual to access a variety of locations that enable the task at hand: Recording a podcast, hosting a client, doing focused work, learning, collaborating with colleagues,” said Poleg at the Urban Land Institute at a recent event. “Most of them will not be at home.”