Is working from home the new normal?

Six months into the forced work-from-home experiment, traditional office space is becoming less relevant

This article is part of a series of special reports appearing in the Sept. 14, 2020, edition of InvestmentNews.

The COVID-19 pandemic forced the financial services industry to shift in an instant from an environment where workers commuted to offices to one where the traditional office workspace has become almost irrelevant. Yet an industry some might argue is not as essential as grocery stores, hospitals and law enforcement has gone on without a hitch.

It’s one thing for a financial advisory firm with a half-dozen staffers to send everyone home with a laptop. But when companies with tens of thousands of employees, like Fidelity and Schwab, continue operating virtually uninterrupted with more than 90% of their employees working from home, it raises the question of what the future of work in financial services could look like.

“For big financial services firms, this has been a stress test that shows them all their planning has proven to be successful,” said April Rudin, chief executive of The Rudin Group.

Looking past the current coronavirus lockdown that still has most businesses restricting visits to offices, Rudin believes the forced work-from-home experiment has been such a success that “everything will be reimagined.”

REDUCED FOOTPRINT

“There will be a very reduced footprint because companies will realize they don’t need all that office space, and a lot of time the office space was for show, as a measure of a company’s success, which will be traded in for new measures of success,” she said. “Going forward, having more employees working from home and reducing expenses will be a measure of success, and it won’t be about location anymore because people will be able to work from anywhere.”

Most large financial services companies are not yet talking about reducing office space and rewriting remote-work policies. But the experience of having to field-test contingency plans in real time and adjust to situations most people couldn’t have imagined less than a year ago says a lot about the adaptability of even the largest companies in this space.

Charles Schwab Corp., where at least 95% of the 21,800 employees are now working from home, is having one of its best years, said spokesman Peter Greenley. “Our client metrics have been strong and we’re managing well through the tremendous volume of work driven by the market volatility; breaking records for net new assets, new brokerage accounts and new-to-retail households.”

At Eaton Vance, where approximately 98% of the 2,000 employees are working from home, the experience has introduced “a new perspective on working from home,” which is now viewed as “a real option on a broader scale across our employee base,” said Dan Cataldo, the company’s chief administrative officer.

Beyond adapting to what is essentially a universally mandated remote-work policy, companies are pushing to make the most of working from home.

At Fidelity Investments, where more than 90% of the 43,000 employees are working from home, there’s a big emphasis on addressing the needs of employees who are juggling work and childcare during the pandemic.

In additional to flexible schedules for parents, Fidelity offers to help employees find and screen childcare and has “back-to-school concierge services.” It also launched a five-week virtual summer camp that attracted more than 7,000 registrants.

Fidelity human resources representative Kirsten Kuykendoll envisions a world with fewer handshakes and more virtual meetings.

“COVID-19 has shown us that many jobs can be done from anywhere and that productivity is not bound between traditional 8 a.m. and 5 p.m. working hours,” she wrote in a blog post. “We’ll see an increase in innovation around how we’re working, too. People may totally redefine and reinvent what it means to execute their role, rather than the current phase we’re in, which is making tweaks to the previous construct.”

With the future looking more accommodative to remote work, companies are also seeing the opportunity to expand the search for new employees.
David Mehlhorn, director of sales at Redtail Technology, said there are no immediate plans to reduce the office space footprint, but he does anticipate more flexible policies related to where employees live.

“The company is so much about culture and so much of that is about being in the office,” he said. “But I definitely could see us opening up new opportunities for remote hires or opportunities for existing workers who didn’t have the flexibility to work from home in the past.”

DESIGN TWEAKS

While some companies are expected to eventually reduce their office square footage as remote work becomes increasingly accepted, the focus is slightly different for at least two companies with new corporate headquarters under construction.

Aaron Schaben, who leads business growth and development at Carson Group, said the new headquarters is expected to be move-in ready early next year, but the COVID-19 shutdown has meant some design tweaks.

“It has forced us to look at how many offices we need, or if we might need more collaboration spaces, and we’ve made those changes,” he said. “We’ve gone through the setup and the types of office furniture we have in there to make sure things can be easily moved around to accommodate social distancing.”

While about 20% of Carson’s 230 employees are back in the office at least part-time, the remote work experience has expanded perspectives on virtual interactions, Schaben said. “We were always about having everyone in the office, but over the last five years it’s been about being efficient, get your work done and be accountable, and COVID has extended that.”

RIA software provider Laserfiche, which has 500 employees, is also slated to open a new headquarters next year and is factoring in pandemic realities.

“We’re looking at modular options for employees to safely work,” said Thomas Phelps, chief information officer. He credits the company’s tech savvy focus for smoothing the transition to remote work, which currently includes all but about a dozen employees who are in the office to manage tech support.

“Given that we are a tech company, our workforce is agile, tech centric and adaptable to working from home, so it’s been pretty seamless so far,” he said. “Our biggest obstruction is to our culture because our people like to be together to collaborate.”

While only about a dozen employees worked remotely prior to the pandemic, the HR department had been running a pilot program on remote work when LaserFiche closed its offices in March.

“HR was leading workshops to get feedback and improve the pilot program to make a broader rollout, then the pandemic hit,” Phelps said. “Going forward, as a company we will look to provide more work-life flexibility. In many cases people will be working out of the office, and maybe have more options to work from home.”

More articles from the special issue:

How advisers can use tech to attract assets — Nicole Casperson

Keeping an eye on chats — Bruce Kelly

Enforcement, arbitration proceedings move online — Mark Schoeff Jr.

Pandemic’s financial, emotional toll prompts early retirements — Emile Hallez

The digital shift is here — and it’s uncomfortable — Sean Allocca

Home office deduction limited to self-employed — Mary Beth Franklin

10 unexpected ways COVID-19 is changing wealth management — Brittney Grimes

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