Top executives at UK fund house Jupiter were brimming with enthusiasm to have returned part-time to the company’s London office last month.
“Our managers are really enjoying the interaction with other colleagues,” chief executive Andrew Formica told clients in a video interview. “It’s great being back in an office environment again,” agreed veteran equity manager Richard Buxton. “[I missed] wandering around the office chatting to different people and getting their perception of markets.”
But the staff reunion did not last long. Just a week later, the UK government’s retreat from its push to get workers to return to offices threw Jupiter’s plans into disarray.
The number of Jupiter employees coming into the office has dropped off significantly since the change in government advice, says Mr Formica.
But the fund manager’s experience of returning to the City over the summer has focused Mr Formica’s mind on the value of having all the workforce under one roof — and on the limitations of remote working.
“We found some enormous benefits from getting people back in,” says Mr Formica. “Although we’ve moved backwards now, that time we had together was invaluable.”
As the second wave of the pandemic builds, companies like Jupiter will have little choice but to make the best of remote working. However, many groups are now thinking about how far they reshape working practices once coronavirus is under control.
The debate over the future role of the office presents thorny considerations for asset managers. On one hand, adopting quasi-permanent remote working would go some way to solving two of the biggest issues facing active investment houses: intense pressure on costs due to falling revenues and a lack of diversity in the workforce due partially to an inflexible working culture.
Having fewer people in the office should lower office costs, while cutting employees’ commute and giving them control of their working patterns makes working parents more likely to stay in the workforce.
An early sign that fund managers were embracing this idea was Schroders’ decision to allow staff to work from home most of the time. M&G has also said that it only expects staff to come to the office two or three days a week in future, with potential knock-on effects for its office space.
However others warn that asset managers need to retain a culture and community for their staff, underpinned by a physical place of work.
Dan Mannix, chief executive of fund boutique RWC, says that the core role that relationships and trust play in asset management makes this particularly important.
“As a people-based organisation, we get a huge amount from the connectivity and interaction that just doesn’t work through Zoom,” he says. “Having a relationship through Zoom is not a particularly deep relationship.”
Jupiter grappled with this as it began integrating Merian, the £16bn manager it acquired earlier this year. When the deal completed in July, none of the Merian employees had been to the office or met their new colleagues in person.
Mr Formica says that this was one of the main reasons behind getting staff back in the office for two days a week in September. “You can manage the status quo while working from home but it becomes much more difficult when you’re trying to build new relationships and integrate new staff.”
Mr Mannix adds that idea generation and innovation that are enabled by office-based working significantly outweigh any perceived productivity gains associated with not having to commute.
“The creative edge that comes from sitting with other human beings is fundamental,” he says. “The five minutes before a meeting and the five minutes after a meeting are really important.”
Mr Formica agrees, noting that the overwhelming view among Jupiter’s returning staff was a feeling that they had overestimated how productive they were at home. “Pretty much every one appreciated being in the office as soon as they came in. They really started to realise the gaps in what they were doing.”
Some warn that the argument that having fewer people in the office results in overall cost savings is reductive. Jonathan Doolan, head of Emea at Casey Quirk, the Deloitte consultancy, says: “Everyone is super focused on costs, but this could be a situation where you cut off your nose to spite your face.”
Diminished interactions between investment staff, for example, could translate into fewer fresh ideas, hitting fund performance and ultimately company revenues, he says.
This view is echoed by emerging markets fund manager Ashmore, which is similarly bullish about the future of the office. Saving money on office space by moving to permanent homeworking arrangements would be offset by “the bigger detrimental impact on our working practices and culture”, according to finance director Tom Shippey.
RWC, who had around 40 per cent of its workforce in the office every day before the UK government advice changed, is aiming to maintain an office that can welcome all employees once the pandemic is over. At the same time, it intends to allow employees to work from home occasionally, depending on their team priorities and workload.
Jupiter, too, wants to preserve flexibility but does not envisage downsizing its office. However, Mr Formica suggest that all employees would have to come in on the same selected days every week to ensure staff can connect with one another in person.
Mr Doolan says the tricky balancing act for asset managers in future is empowering their staff to work flexibly, preserving the company’s legacy culture and updating it to welcome new colleagues over time.
The extent to which asset managers favour home or office-based working will depend on individual company priorities.
For Mr Mannix, though, the preferred ratio between on-site and off-site is clear. He points to staff training and development as one example. Junior employees need to be mentored by more senior colleagues, meaning it is unviable for some sections of the workforce to be in the office and not others.
“Young people or graduates can’t just be surrounded by other [junior employees]. There is no way around it than everyone having to be in the office.”