By Syndication Washington Post, Bloomberg · Stefania Spezzati, Edward Robinson · BUSINESS
Brokers and traders are popping into a newly reopened takeaway-only Pret a Manger for coffee. Gardeners are preparing flower beds around the Duke of Wellington's statue overlooking the Bank tube station in the heart of the district. Cleaning teams are rubbing down door handles and polishing floors in bank lobbies, the odor of disinfectant wafting down the street. It smells like progress.
For the last 11 weeks, Europe's financial center has been staffed with skeleton crews, particularly on the high-speed trading desks that are difficult to run from home. Now, with U.K. schools scheduled to begin a phased opening next week and nonessential stores set to follow on June 15, the Square Mile is poised to spring back to business.
The hope is that the City will soon stop looking like an unused movie set and more like the bustling locale that's long attracted go-getters from around the world. Shifting the financial industry out of home offices and back into its glass and steel towers is vital to the U.K.'s health. The business of money contributes about 7% of the nation's economic output, and before the global economy ground to a halt it generated an annual trade surplus of $55 billion (44 billion pounds).
But bringing people back is shaping up to be much more complicated than setting them up to work from home. HSBC Holdings Plc and UBS Group AG, for instance, don't plan to ask most employees to return for the foreseeable future; likewise for Deutsche Bank AG's asset-management business in London. That'll be just fine with those who don't want to brave public transportation -- only one in four office workers wants to be back full-time, according to a poll this month by YouGov for Okta Inc., a software company.
As the crisis enters its next phase, finance industry leaders are confronting thorny questions well outside their quantitative comfort zone of balance sheets and price-earnings ratios. Dean Proctor, chief executive officer of Seven Investment Management LLP, says he'd like to bring back 10% to 25% of his 225-person London workforce in early June.
"We have to shift people from thinking about survival to thinking about how we thrive through this period," says Proctor, whose firm manages 14 billion pounds in assets. "We also have to understand how our employees are positioned: Who are they living with? Are there family members who are high-risk or vulnerable? Will they travel on public transportation to get to work? Is that worth it? That's the dilemma."
The first wave of returnees will likely be traders, mergers and acquisitions bankers, and other professionals subject to stiff legal compliance and confidentiality rules. They'll find a radically altered environment. Royal Bank of Scotland Group Plc will direct employees through thermal imaging and temperature checks at the entrances of its offices near Liverpool Street station. High-rise office workers can expect similar measures, from restricted access to elevators and kitchens to marked social distance boundaries on the floors to one-way staircases. Most firms will distribute face masks and other protective equipment to employees.
The new world has already been imposed elsewhere. UniCredit SpA in Milan requires employees to wear masks at all times. In Frankfurt, Deutsche Bank has switched off coffee machines so people don't press the buttons. An industry that relies on regular team meetings and the serendipitous encounter will have to adjust to a more regimented reality. And jamming into conference rooms for brainstorm sessions? No way. You'll still be better off using Zoom even if all of you are in the office.
Some finance leaders wonder whether all the office space is even worth it. In late April, Jes Staley, Barclays Plc's CEO, mused to reporters that "the notion of putting 7,000 people in a building may be a thing of the past."
As tempting as it may be to jettison pricey overhead, it's a bad idea, say experts ranging from senior managers to workplace psychologists. Michael Thomas, a partner in the financial-services practice of the global law firm Hogan Lovells, says it's important to get back into the office and resume face-to-face meetings.
"Business relationships are human relationships, particularly with the law, which is about trust," Thomas says. "Nuance is important, and mood is important, and you have to gauge the attitude of your client. And it's difficult to see how that plays out the longer this goes on."
Bosses shouldn't underestimate the toll of isolation. The novelty of working from home can give way to burnout from overwork or a sense of futility and exclusion for employees who don't receive feedback from supervisors, says Octavius Black, the CEO of Mind Gym Plc, a London behavioral-science consultancy.
Black says people need the banter and daily contact with colleagues to spark creativity and pursue innovative projects. That's not only essential to cultivating a robust corporate culture, it's also what drives firms to be more profitable.
"The idea that you could save on office space and have people work from home indefinitely would be a massive misstep," Black says. "All those rituals at work are important, they provide context, a sense of belonging, they are the social glue in an organization."
Work outside the office will change, too. Power lunches won't feel so special when you and your fellow diners are wearing masks and sitting at opposite ends of a table. Forget about those spur-of-the-moment pints of beer at the end of a busy week; they'll probably have to be booked well ahead of time, at least when the pubs reopen.
The lockdown has been especially challenging for women, say Debbie Wosskow and Anna Jones, the co-founders of the AllBright Club, a female-only organization that had to temporarily shutter its two locations in London and one in West Hollywood, California. Many of their members have struggled to balance "double-shifts" of overflowing workloads and home-schooling children. Those with less enlightened spouses have also been inundated with housework.
Yet Wosskow and Jones, both of whom suffered through Covid-19 themselves, say the crisis has brought a newfound urgency to their venture. They accelerated the rollout of their AllBright Digital program, which uses video chats and streaming to replicate the networking, mentoring, and career support members used to receive at the clubs. They also believe the clubhouses, which feature modernist cuisine and rooftop cocktails as well as business space, will become havens for members who either can't or don't want to return to their offices. More than anything, Wosskow and Jones are embracing the chance to be at the center of a community as they prepare to possibly reopen in July.
"This was a massive opportunity to form a global sisterhood, which is needed now more than ever," Wosskow said in a Zoom chat.
Even as companies adapt to this strange new world, there's little doubt that the next stage of this crisis is going to be rough. The unprecedented disruption is going to force firms to review head counts, commercial-property leases, technology, even their business models. Hanging over everything is the possibility - some would say likelihood - of subsequent waves of the virus as scientists race to produce a vaccine.
And yet amid the anxiety, there's reason to believe the City of London, which was founded by the Romans almost 2,000 years ago and over the centuries has endured the Black Death, the Great Fire, and the Blitz, will withstand the coronavirus. There will be changes in this square mile of medieval lanes and Victorian trading houses dotted with postmodern skyscrapers. With fewer workers for some time to come, many of the hundreds of eateries and haberdashers and pubs and dry cleaners that depend on their patronage could close for good.
But other changes might be welcome - more commuters than ever are expected to cycle to work, which could prompt the permanent closure of some streets to motor vehicles. And the forced mass experiment of working from home may speed up the embrace of healthier work-lifestyle balances in an industry known for its demanding hours.
One thing that won't change is the desire to be at the heart of the action. That's the City's ace card, says Will Beckett, co-founder of the Hawksmoor chain of high-end steakhouses. For the last 14 years, he's watched as finance types celebrated done deals over his rib eyes and make lasting new connections in his dining rooms.
"There's a reason we live in cities, we want that spontaneity, that sense of improvisation, and are we just going to let that go?" Beckett asks. "No, I don't think so. We're social animals. We will gravitate back to that. The problem is that we just don't know how long it's going to take."