The COVID Diaries: investor 8

The following interview is with an Australian-based fixed-income investor. It was conducted on 3 June 2020.

Does your business have a timeline for returning to office working – and are you looking forward to it?

My team is part of a broader group that has an office of about 100 people in Sydney and we are working together on our strategy for a return to work. However, my team is not in any hurry to come back into the office.

Formally, we have communicated to staff that we will be working from home at least until the end of June. Our HR and risk departments are working together to understand the latest medical and government advice and will come up with a plan for management to consider on a staged return from 1 July.

My general view is that working remotely has gone very well for my team so we are not in any rush to go back into the office if we do not need to. The priority in every decision will be staff health and wellbeing. A lot of our staff will need to take public transport and we are not going to compel anyone to come into the office if they are uncomfortable with any aspect of doing so.

When we do come back it will be staged. A few people in the team have been able to work from home satisfactorily but it is very inconvenient for them. For example, some had to move in with relatives or friends for various reasons.

People with circumstances like this will have priority for using the office. Among the senior leadership group, we will probably have a rotation for going into the office once there are some people going in. It will be very gradual after this with alternate teams.

It is commonly accepted at this stage that Australia and New Zealand have done relatively well in the phase of the crisis where public health was the number one priority. Is it now time – at the margin at least – to change the emphasis towards reopening the economy?

The reopening has ended up being much quicker than anticipated. There seemed to be a change of attitude around the time the unemployment figures were released. There were good statistics at the same time on the health front but I did have a question in my mind as to whether the health outcome just happened to improve at that time or whether the advice had been directed to be more compliant with the economic imperative. However, I’m more comfortable with the official thinking now.

The reason we had the lockdown in the first place was the fear that we would experience an outbreak like other countries that would overwhelm our health system. The success we have had in keeping a lid on the crisis has meant the health system is now ready to manage localised outbreaks. As the weeks have gone on it has become clearer that, even if we had a significant second spike, the health system would not be as stretched. Overall, I am comfortable they are getting the balance right.

“The reason we are not having a Brazil-type COVID-19 experience is because we had a strong response. It is not that COVID-19 is not a risk, it is that we have managed the risk well.”

Are you more or less optimistic about the crisis than you were during the early acceleration period of moving to home working and adding social distancing measures?

I am more optimistic although we need to see how it plays out with restaurants allowing more people in, gyms reopening and generally more people interacting.

I am concerned, because I see some parallels with the 2008 financial crisis. Australians generally still do not think the financial crisis was a big deal. People just don’t seem to be able to recognise that the reason we did not have a recession was because the policy response was strong.

It is the same thing now. The reason we are not having a Brazil-type COVID-19 experience is because we had a strong response. It is not that COVID-19 is not a risk, it is that we have managed the risk well.

I am concerned when I see the number of people that are not practising social distancing even in trivial ways, like when people finally are able to reunite with one another and they all cram in together for a big photo. People do not seem to get that this is a problem.

I am not as concerned at the macro level, but this is a very contagious virus that could rise again. I am more confident, though, that localised outbreaks can be dealt with and brought under control.

Do you subscribe to the view that this crisis will radically reshape our society, or will people have short memories?

My view on this changes. Overall, I think it will change the way we do a lot of things but I don’t think it will be as radical as some suggest.

There is a lot of talk in the business world about office space and the outlook for the commercial property market. Even if social distancing is with us for years and we need to make sure we do not have everyone in the office at the same time, I think we will still need a desk for everyone. Sharing desks is not going to be a safe thing to do.

Therefore, I am not convinced the demand for office space will shrink. There will always be a need for people to physically work together, especially when you’re starting major new projects or recruiting and on-boarding. When you are working remotely, bringing someone into a workplace where people need to talk with one another and learn from one another to solve problems is much more difficult.

Even if you are not physically together eight hours per day, five days per week, you still need the opportunity to bring teams together physically fairly regularly. You will need space for that.

One thing that will change is travel. Everyone has figured how to work with Zoom and other technology so the need for business travel will be diminished.

There is also the opportunity to create much more workplace flexibility. We were quick to move to working from home – we had worked out our plan for it in early March. About half our team was used to working from home, particularly the leadership group, while the investment staff that already had the technology at home and would often spend a day or two working at home.

The other half, particularly our customer-facing people, had always come into the office. If they had kids at home sick, they had to take a day off to look after them. What we have now learned is that it is possible to build more flexibility into people’s work plans. More people can work from home if needed – and this is an opportunity to improve productivity. Even if you can’t work a full day when your kids are home sick, if you can get 4-5 hours in this is an improvement.

What are you most looking forward to being able to do again as restrictions ease in the coming weeks and months?

As a business, there is nothing like being able to sit around a table and chat with your colleagues to solve problems. Since the crisis began, I have physically only seen one of my colleagues. They had to come to my house to pick up a document I had signed. It took two minutes, but it was great to see them!

Personally, though, I have very much enjoyed being in lockdown and socially isolated. I have spent much more time with my wife and have not had to commute, which is great.

But the reason offices are structured the way they are is that there is no substitute for physical presence. Technology has improved a lot, but you need to touch base with people fairly regularly.

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