Getting to grips with the future of work
COVID-19 has profoundly affected how people work, especially in largely urban, professional industries like capital markets. As part of the 2021 Australian Securitisation Forum virtual conference, leaders with a range of perspectives shared their views on whether the shift to wide-scale home working will persist in the long term, how it affects equity across the workforce – particularly through a gender lens – and the value of face-to-face working.
Davison KangaNews’s recent Women in Capital Markets Yearbook survey illustrates the extent to which working practices have changed and a ‘new normal’ expected [see chart 1]. But how confident are panellists that this outcome is correct, in the sense that pandemic-era changes are set for the long term? Instead, might we expect a steady creep back to office working over the next few years?
TONKIN From the perspective of my own team of 350 people globally across 16 cities, my view is the survey data are directionally correct. When the pandemic first kicked in and we moved to more remote working, we were initially of the view that home working would not last and we would quickly bounce back to working in the office.
But as the situation has unfolded, the technology response and the application of VC tools have shown that flexible arrangements work.
While our offices are open, they are not truly open in the way they were pre-pandemic. It is geography-dependent – some, like Perth, are fully open, others are gradually reopening, like Sydney and Melbourne, and some are still closed.
With a largely external-facing team, I am finding people are eager to return as we reopen offices and facilities, and customers do likewise – to do things like co-creating new types of deal opportunities. But it is going to be a journey in 2022 and beyond for a team like ours, to ascertain the best working arrangements that meet the needs of the team as well as the requirements of the customer and shareholder.
DALITZ Prior to the pandemic, we had a fairly fixed mindset about what roles could be performed in a virtual setting, at home or flexibly. Some were certainly ring-fenced as being off-limits for remote working. During the pandemic, we really experienced for the first time a situation where all roles could flex.
However, it is not necessarily ‘flexible’ to be told you must work from home. Meanwhile, for many people home working introduced a new kind of status to do with the hierarchy of the home office. To work from home is easier for some than others.
These challenges need to be navigated. But I think it is true that the changes we have seen are here to stay, because our minds have been opened up to possibilities we had not fully explored previously.
Davison Most of us have only really focused on working arrangements since the pandemic, but it has been central to the work undertaken by the Place Futures division at Lendlease for many years. Alice Drew, has what we have seen over the past 18 months surprised you in any way?
DREW Many of the things we have seen are an acceleration of trends that were already coming our way, including adopting technology, the uptake of flexibility and, in particular, the rise of flexible workspaces.
The property market has been hit in many ways. It is interesting that COVID-19 has precipitated organisations or tenants that were already asking for more flexibility to demand access to flexible spaces other than their workplaces, so they can contract and expand in line with business needs.
The acknowledgement that individual flexibility is appropriate and here to stay is extending into the swift uptake of requirements like this, not just on the level of SMEs and individuals but on institutional scale.
We have found similar data to the KangaNews survey. But one thing I always ask is whether the data are correct outside the context of a global pandemic. Right now, people are answering questions about wanting to work from home on the basis that everybody else is working from home too. I wonder whether a tipping point will come at which people will start to make different choices because others are starting to return to the office.
Our observations on returning to work after the first lockdown were that the people who said they would always go in or hardly ever go in actually tended toward the middle and a half-half arrangement. I think it is a really interesting time to observe, understand and predict how these trends will play out as people start spending more time in the office.
“With a largely external-facing team, I am finding people are eager to return as we reopen offices and facilities, and customers do likewise – to do things like co-creating new types of deal opportunities. But it is going to be a journey in 2022 and beyond for a team like ours, to ascertain the best working arrangements that meet the needs of the team as well as the requirements of the customer and shareholder.”
Davison Can employers envisage a situation some months down the line in which reversion to mean, peer pressure or some other factor causes people to start drifting back to the office?
TONKIN It is a journey and everyone will have different experiences. There are obvious challenges, for example in staffing new roles or taking people from graduate programmes into permanent roles, and bringing people up to speed with deal-making – the kind of formal and informal networking found in an office environment. Then there is meeting with customers or peer banks at networking events. I am referring to side-corridor conversations: the kinds of discussions one hears on other transactions or information flow that has always been a vibrant part of learning.
It is for this reason I believe the nature of a business will ultimately drive work selection within it. For somebody like me, who does a lot of customer engagement and peer-bank interaction, my preference is effectively to do it ‘live’ where it can be done. If you are on large committee- or governance-style meetings that might cut across borders or geographies, using the VC format is fairly effective.
It is tricky because we are all living in the moment to some extent and we have not yet fully explored the range of experiences involved. Not everybody has a home office – but some do, and some have a long distance to travel to work. I think recent experience will bring about a blended outcome that will be here to stay because it is supported by technology – though things will also continue to move around.
FLEXIBLE WORKING AND EQUITY
Davison It seems to be widely taken for granted that home working is a factor in employees’ favour, and our survey certainly suggests people prefer to do at least some of it. But are we underestimating the challenges of home working especially for less advantaged employees?
RISSE The question is how feasible, functional and effective ongoing working-from-home arrangements are, and whether there are differences owing to individual workers’ situations that might have implications for equality and fairness.
This follows the previous conversation in the sense that we are treating home working primarily as a way of responding to the situation we are in right now. But we need to think ahead to what is sustainable and fair for all employees. This is particularly the case when we think about the next generation coming into workplaces. Are new graduates going to be given the same opportunities if much of the existing workforce is not there in person to support them?
There is a sharp distinction when it comes to gender. Disproportionately, it will be women who prefer to work from home by virtue of having greater caring responsibilities. There is a real risk that we will see some segmentation – that, if females are disproportionately the ones who are not present in the office, they could suffer repercussions because they are not there to form networks, exchange information and build the connections that are solidified in person.
We know from research on unconscious bias that if you are not there in person you do not form affinities with your work colleagues. There are disadvantages when it comes to who gets promoted or is front of mind for a project.
Therefore, we must be mindful of setting up inclusive practices so those opting to work from home are not disadvantaged and, ideally, to nurture a workplace where just as many men opt to work from home or under hybrid arrangements as women.
One way to summarise this is to say if you don’t have strategies that are intentionally inclusive, you will end up with a workplace that is unintentionally exclusive. It is the responsibility of employers and managers to build in systems that ensure they are fully inclusive of workers at home whatever arrangements transpire.
Part of the question also speaks to what is within the capability of all workers, which might reflect their financial circumstances, socioeconomic background, ability to set up a functional home office and ability to have a safe working-from-home environment. We should not make the assumption that all workers are necessarily safe and free from factors such as domestic violence. There are legalities within this that we need to navigate, too.
Davison Has any work been done on whether there is a public-sector revenue impact from hundreds of thousands of formerly office workers now including their home-working expenses on tax returns? Are we once again socialising cost that should be borne by private-sector employers?
RISSE We can put some monetary terms on this and I also point to the things we can’t measure as a dollar value, such as wellbeing and health.
Regarding what happens when we have a segment of the workforce now working from home and claiming a tax deduction on those expenses, I have carried out a very rough, back-of-the-envelope calculation.
The Productivity Commission recently estimated that around 35 per cent of the workforce is in jobs that were amenable to being done at home. I made the assumption that this workforce would spend three days a week working from home, and at professional pay grades, to arrive at the government forgoing roughly A$1.2 billion (US$849 million) in tax revenue per year.
But this is only one slice of the picture. The question also prompted me to think about other behavioural changes. Examples include fewer people commuting so there might be less road usage and less consumption of fuel, having an impact on fuel-tax revenue. Many calibrations will ripple through the economy.
It is important to remember the reason we congregate in offices is because it is efficient to do so at scale. It is not just coming together to be more productive and dynamic, exchange ideas or have in-person conversations. It is also because it is a lot more cost-effective to have heating, air conditioning and internet, for example, set for scale than set up individually at home. On the other hand, there are savings for workers when it comes to commuting – as well as the time-saving benefits and other measures of wellbeing.
I expect plenty of research to occur in this space to quantify the benefits and the costs. At the same time, we must respect that there is going to be a lot of variation at individual level for different people, circumstances and stages of career or type of household.
Davison Will working from home reinforce inequality, noting the amount of workers for whom it is not an option as well as all the points already discussed?
DALITZ We knew pre-pandemic that a greater number of women took up more flexible types of working arrangements than men. Some of these women felt they needed to ensure they were visible and were concerned about whether they would be measured on their outcomes rather than the hours they were present. They wanted to overcome the concept of presenteeism – being rewarded for being in the office. We can learn from these experiences and also from the experiences of the pandemic.
We have learned that most roles can be performed remotely or flexibly but, at the same time, Christina Tonkin touched on the need for people to be together to learn certain skills and deliver some outcomes. Feedback we receive through the Women in Banking and Finance network is that there is considerable benefit in people coming together. There may well be an opportunity to look at the ways in which we bring people together.
We have seen considerable benefit in being able to collaborate across borders and to bring in subject-matter experts where it would otherwise not be productive or economic to do so. We have been able to bring in experts from overseas to speak on specialist topics at events throughout the year. This presents a real opportunity to tap individuals into projects for our professional-services firms with global networks.
The real challenge ahead is how the industrial-relations regime keeps pace with what is occurring here. This will require some examination, for example of people being able to work whichever hours they wish to work. There is still a tendency toward relatively standard hours.
We have seen people chop and change quite a bit around schooling from home, for instance. A Harvard Business Review study this month indicates that although people value flexibility, they value autonomy more. This comes with a need to develop performance management and measurement mechanisms that ensure people are not discriminated against should they not work in the traditional manner.
Davison Going back to the KangaNews survey, the primary problem people have with office working seems to be commuting, while there are plenty of perceived benefits from being in the office [see charts 2 and 3]. Is it possible we do not have a working-style problem but an infrastructure problem?
DREW It depends on what the commuting problem is about. Is it a hygiene issue that will dissipate over time as people become more comfortable living in a COVID-19 world, or just that people think they can convert commuting time to something more valuable? I think it is probably a little of both.
Many have elected to take a ‘tree change’ during this period and we have seen house prices increase further out from our cities. Equally, starting to go back into the office will have an impact on the quality of the overall day if you are commuting for longer than when you were working from home.
The other interesting thing about the survey data is that the top half of the primary benefits of office working are personal benefits. But it is all the other, relatively lower things – like being better for creativity and for dealing with external parties – that we have been citing for many decades as the reason we create workplaces in the first place.
The catch-cry of the commute has been heard across the industry over the last few years. We need to think about how to curate better experiences for people so they can overcome the commute issue and view the benefits of going to the office as real. At the moment, people are starting to return but we have not yet hit the tipping point where the experience of being back outweighs the commute. People are going in yet not seeing who they want to see – because half those people are still working from home.
There is going to come a point in the very near future when we might get an answer to this question. But it is also true that Sydney has always had infrastructure problems.
Davison Is it as simple a fix as moving from five days a week in the office as a norm to an average of 2-3?
DREW It is far more complicated than this – because our organisations rely on having a wonderful culture that people want to be part of. This entices and inspires people to work together for the betterment of the projects they are working on.
The biggest thing we need to work on now is making sure we revive the cultures of our workplaces and the organisations in our cities. This is what will re-energise people out of this last couple of years of sad, lack of wellbeing, working from home.
We hear how many people have benefited from this arrangement. But the data show people are fatigued with it and are really enjoying coming back to work, seeing their colleagues and being more social. I believe we will have a really bright future if we can all work together to revive the culture in whatever sphere of influence we have.
Davison Christina Tonkin, as the manager of a large team, how do you think about encouraging a culture revival? Ultimately, will it require a carrot-and-stick approach to achieve the balance you believe is optimal for employees and organisations?
TONKIN It is going to be a journey and we all need to be very flexible. Most people I see in the office are excited to be back, particularly where we have had external client events. Everyone is happy to be at those. There are obvious disadvantages to being at home all the time, including managing where work ends and home life starts.
Quite often now, teams are running with all their people in the office on the same days – but not every day. There are other useful tools like running in-house and face-to-face lunch-and-learn forums while still having experts coming in remotely. All these developments are pretty exciting. For me, running a talent-driven team, we certainly have to find the blend of what is best for the customer, shareholders and our people.
WOMEN IN CAPITAL MARKETS Yearbook 2021
KangaNews's annual yearbook amplifying female voices in the Australian capital market.