Bye bye to the office worklife
Lawrence Young
Senior Wealth Manager with 30 years of experience. Personally servicing clients in 26 countries. Creating growth for my clients through portfolio building and continued management.
There is a story circulating that may initially on the surface seem quite small and insignificant. On its own it probably is. One of the ‘Big Four’ audit firms, Deloitte announced on Friday that ALL of its 20,000 UK employees will never have to return to the office again. EVER! That is even after all lockdown restrictions have all been lifted. All staff will be able to work permanently under flexible working conditions with no set times that they need to be in the office. Right now I’m sure you are probably thinking to yourself, “well that’s nice, they all get to work from home. So what?”.
As a wealth manager, when I am constructing a portfolio for a client, I am naturally asked about my opinions on current market conditions so I always need to keep abreast of trends and show them in investable scenarios that people can relate too and see why a chosen set of companies in a portfolio might rise in value.
So it is important to understand the long-term ramifications of such decisions by Deloitte and others and how they have a potential effect in the markets in general, given how we will all be working in the future. I myself have been working from home for the last 15 months here in Vietnam and have no intention of ever setting foot in an office ever again. Not that I mind working in an office, it’s just that there really is no need for me to do so. I have a good work ethic, I have set up an office at home and everything is conducted online or electronically in administrative requirements, trading, even client facing communications can be done online if a café isn’t open nearby. There really is no part of my function that cannot be conducted from a distance. Not all businesses can do this I agree but many can and probably will.
So many businesses would have been looking forward to restrictions being lifted and getting back to creating profits again. However, lets consider the ongoing work at home dynamic that is surely set to expand out further globally. What changes will occur in different industry sectors and what impact might remote working have on all of us?
If a large portion of the population are not required to go back into an office, then there are many industry sectors that will not be recovering even after restrictions on travel and social distancing are lifted. The first scalp that will fall is naturally office space. The real estate market will become very segmented with hot desks made available to staff. Meaning an individual will no longer have a specific desk assigned just to them and on the days an employee decides to go into their office, they will be sharing a desk with a group of people depending on who is in at that time. You become a nomadic desk user. The result should be an over-abundance of available office space as companies decide to downgrade in size, and prices will drop. As will profits for those large real estate companies that own all of this unrequired office space.
Now consider all those people who are not commuting anymore. All those bus tickets and train tickets that will never be bought again. Commuter companies and related services and sales are all going to suffer massively. Commuting expenses were never exactly cheap anyway and those funds will now become disposable income to an employee instead of an expense. Think of how many Starbucks coffees will now never be sold to commuters on their way to work. How many lunchtime sandwiches will never get made and sold. Then there are the after-work parties and get togethers that will never happen effecting further food and beverage outlets. Think about what you spend everyday in your usual daily working life routine. Where will you be spending that instead? Add it all up and it suddenly becomes a major change in trickle-down economics.
Then there is the work at home scenarios where other companies will start to benefit. People will need more online security and on different machines. Mobiles, tablets, PC’s that link into their work servers remotely will all need updating and better online security. Online security companies are doing well and will continue to do even better.
As people are no longer commuting which for many was also their main daily exercise, they may wish to purchase with their new-found extra disposable income, some home gym equipment. Peloton etc. There is a seismic shift occurring in how the world works, how it commutes, where we exercise, childcare requirements as we are now working from home, less shopping in office park areas, reduction in congestion and parking fees, less petrol being pumped in cars. The list is endless when you stop to fully consider the impact of a society that works more from home. It was expected that people would return to the office once everything started to stabilise, but clearly in the boardroom this point has been considered and when a top four audit Company sends out the signal to the world that it will be taking this new route of flexible home working permanently, you can be sure others will follow. In fact, you can guarantee it will already have been discussed in boardrooms in every country.
Take a look at your portfolio if you already have one and think about the long-term effects of such a seismic shift in how we behave. If you are in any doubt then think of this. The benefits of a workforce working from home are:
- Office costs are reduced
- Increased staff retention
- Environmental benefits
- Higher morale
- Wider talent pool
That last one alone has such major implications. You can apply for jobs on the other side of the country. What does it matter if you are working from home? Dare I say, even in another country. Welcome to the new world. You do get higher staff retention because staff are happier hence morale goes up.
Studies show that people actually work better if left to their own devices. It has shown that levels of productivity actually have gone up since people have started working from home. The theory that staff wouldn’t work properly if unsupervised is being debunked. We are all adults and know what we need to do. Hit your deadlines and you get left alone to work independently. Everyone wins.
So do you want to be holding companies that are exposed to a world without commuters and office workers? Shouldn’t you be moving towards companies that will benefit from the longer-term stay at home working mum and dad. And single people of course!
Out of a population in the UK of 67 million, and a working population of 34 million, that would suggest anywhere between 5 and 15 million people will no longer be commuting and working in offices. You can probably roll those figures out to many countries around the world in similar numbers. It is quite staggering what just an average of 10 million people no longer commuting and spending will do to a much wider range of industries that have up until now enjoyed the spending habits of commuters going to and from their workplace and other daily expenditure.
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Senior Wealth Manager with 30 years of experience. Personally servicing clients in 26 countries. Creating growth for my clients through portfolio building and continued management.
3 年One area that strikes me as being problematic is definitely training. There won't be a complete closure of offices but more downsizing. There will still need to be central points for storage, filing, general admin functions. But a huge amount of roles could be done from home. It won't be for everyone and i would imagine that many would actually prefer to stay in an office environment. The reasons you've mentioned will be important to some. The flexible attitude of companies will permit this. I assume it is a work in process for many companies but like many changes we have seen accelerated in recent times, i feel its here to stay. Case by case perhaps but nice to have a choice.
Interesting perspective Lawrence Young jury is still out for me to be honest. I wonder what impact remote working will have on culture, talent development & breeding a strong relationship with colleagues if allowing full remote working, especially when things become difficult? Many industries including wealth management have benefited dramatically in the past 9-12 months & wins are relatively easily won right now. When the need for a team to really pull together in order to get through a tough phase, I’d be interested to see which companies succeed. Remote or ones that are brought back to office working.