Stockbroker Panmure Liberum has joined Deutsche Bank in barring staff from working at home on consecutive Mondays and Fridays, as financial services groups across the City of London push to get staff back to the office more frequently.
UBS has also said that its UK employees will no longer be able to work from home on Monday if they were not in the office on the previous Friday.
Other institutions have gone further still, with City broker Peel Hunt recently mandating staff back into the office four days a week. Quant brokers at Man Group must attend five days.
Santander has said it has no specific requirement but a person familiar with the situation said “in practice” five-day office attendance is the “default option”.
They are part of a growing number of employers. According to Brightmine, which provides HR analytics, 15.1 per cent of UK companies have increased the number of mandatory days in the office since introducing hybrid working.
This shift to more office attendance and a return to pre-pandemic working patterns is at the centre of a battleground, where the spoils are office space and talent.
“We’re trying to avoid ‘TWaTs’ in the workforce”, said one banker referring to the post-pandemic acronym coined to describe workers who only come into the office on Tuesdays, Wednesdays and Thursdays.
Such managers have their work cut out: UK employees work 1.8 days a week from home; well above the global average of 1.3 days and the highest figure in Europe, according to a global survey of workers by the European Bank for Reconstruction and Development and King’s College London.
“Remote work has moved from being an emergency response to becoming a defining feature of the UK labour market”, said Cevat Giray Aksoy, lead economist at the EBRD.
That contrasts with the stance adopted by firms including Goldman Sachs, which rejected working from home as an “aberration”. JPMorgan’s Jamie Dimon has argued that remote workers allow “bad habits to develop”.
For some firms taking a tougher stance, a new problem has arisen: there aren’t enough desks for all their staff to be in the office five days a week.
Barclays has come up with an innovative solution by sending as many as 100 of its UK employees to a Shoreditch co-working space it runs and which was originally opened for fintech start-ups, according to people familiar with the matter. They claimed the “Eagle Lab” was a win-win solution for the bank as it helped put staff in proximity to entrepreneurs.
HSBC, meanwhile, now has a shortage of a few thousand desks, according to a person familiar with the situation. The bank is trying to find more space in London after it became clear that its new headquarters near St Paul’s will not be able to accommodate all employees. The bank’s executives are looking at various options, including renting space in Canary Wharf where its current headquarters is located.
Europe’s largest bank has offices dotted across the City, including in the costly Mayfair area, which executives had planned to close or significantly scale back as employees moved to St Paul’s, according to people familiar with the conversations. Those plans have now been put on hold while HSBC calculates exactly how much space it needs.
JPMorgan and BBVA are also running short of office space, and BlackRock’s Larry Fink lamented last month that he was unable to find enough space for the investment firm’s growing UK workforce.
“This shortage of space has caught out many companies that previously downsized, as they face challenges and high costs when they seek to expand their footprint again,” said Alexander Jan, chief economic adviser at the London Property Alliance. Office vacancy has returned to pre-pandemic levels of 6 per cent and there is now record low of just 1 per cent availability for the best new buildings in the City and West End, he added.
Some firms are aware that their previous desire to cut costs following the Covid pandemic by reducing space is now leading to grumbling when workers have to “book in” to come to the office, according to Stephen Inglis, European head of public markets at ESR Europe.
Matthew Bonning-Snook, boss of London developer, Helical, said he was aware that “softer sweeteners” to encourage staff back to the office are now “starting to be aided by firmer diktats which will ultimately impact employees’ promotion and pay prospects”.
The evidence shows that financial firms’ efforts to get employees back in the office full-time are bearing fruit but that there is still some way to go. Transport for London’s “tap out” data this spring showed that while Friday tap-outs were at 62 per cent of pre-Covid levels, Mondays have crept higher, to 71 per cent of pre-pandemic levels. By comparison, Tuesdays, Wednesdays and Thursdays are back up to 80 per cent.
Meanwhile, data from Brightmine found that only 36 per cent of roles in London were fully remote, with 90 per cent of firms in the capital offering hybrid working. This compares to Scotland where 43 per cent of roles were fully remote.
Among firms sticking with the option of remote working are the Big Four. Deloitte and KPMG use flexible policies as a way to attract and retain staff. By comparison, rival PwC is now mandating at least three days a week in the office or with clients.
Top law firms, too, have stuck with a three-day-a-week office policy, although London outposts of a number of large US law firms, including Ropes & Gray and Weil, Gotshal & Manges, switched to four days in 2023.
One “magic circle” partner said that a number of law firms were keen to amend their policies to increase office attendance — and many would “eagerly jump on a bandwagon” — but firms were reluctant to admit this for fear of impacting retention or recruitment.
That is the tightrope that employers must walk.
Aksoy at the EBRD said: “City firms trying to mandate four or five days in the office are essentially ignoring what the labour market has already decided.”
He added: “The question isn’t whether they can force people back — it’s whether they can afford the talent exodus that inevitably follows.”
Additional reporting by Ellesheva Kissin and Suzi Ring in London
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