NatWest: London Office Life Will Never Return
The last 18 months saw a lot of changes across the world. Nowhere is this more evident than in what is taking place in the office; or is it out of the office?
We are seeing many companies having to adjust to the idea that employees are not buying into the "return to normal". After working from home for an extended period of time, many are not excited to rush back to the way things were before.
Employees are finding there are a number of benefits to them working remotely. Hence, companies are finding it difficult to lure them back to the office environment.
This is causing a bit of a rift. Some companies are adjusting nicely, making arrangements to arrive at viable solutions. Others are fighting it, trying to bully people into adherence.
Cities Are Being Affected
As employees work from home, cities are finding that things are changing a great deal. The number of people in downtown areas has crashed since the pandemic hit. Even with things opening back up, they are not back to pre-COVID levels.
For example, the subway fares in New York City are still down more than two-thirds. Since most people commute into the city, that is a large percentage of the traffic. We see similar results across most major cities.
London is also one where there is a lot less going on than before. In fact, some experts are forecasting that London might be one of those cities that never recovers.
The challenge for some of the largest cities is that they have huge financial sectors. This is an industry that, like many others, is having a tug-o-war between the employees and corporations.
It is, however, one that is ideally suited for remote work. Since most employees stare at an computer screen all day, that can be done anywhere. Large numbers of highly paid personnel are finding they are not going back to the office.
There is also the fact that many of these people are in high demand. We are seeing those who have any attractiveness on the job market making their own demands. This means that people are quitting in record numbers.
NatWest: London Office
NatWest had a strong presence in London. The company was one of the major firms located there, with thousands of employees coming in each day.
Those days are likely gone according to the CEO, Howard Davies:
“The days when 2,500 people walked in through our office door at Bishopsgate at 8:30 a.m. and then walked out again at 6 p.m., I think that is gone,” Davies said.
This has huge implications on downtown areas that depend upon these workers to support other businesses. The slow response to returning to the daily commute is putting these industries at risk. Of course, we see this impact commercial real estate in a huge way.
NatWest isn't the only one going in this direction. UBS is implementing a hybrid model.
Others in the industry have made similar predictions, with UBS Group AG Chief Executive Officer Ralph Hamers saying yesterday that his investment bankers will be able to work part of their time from home under a new, permanent hybrid model that the bank is rolling out.
Notice how this move is permanent by UBS. They are not even messing around with the notion that things could return as they were before. While there are some companies resisting, others are jumping ahead of the curve. The reality is that people are going to end up making the decision, not companies.
With the willingness to quit on a moment's notice, employer's stranglehold on people is threatened. Those that believe they can hold the line and force people back to the office are going to find themselves suffering.
As more jobs open up in the remote work realm, people are going to stop being "herded like cattle". Their expenses are elevated since they are forced to live in urban areas due to the job market. This is going to flip completely since remote work is now "work from anywhere".
In the meantime, cities like London are facing a period of adjustment. How this unfolds over the next few years remains to be seen. Either way, we are seeing a lot of changes taking place.
We can bet they will affect a lot of companies and investments.
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