Asset Managers Are Urging Employees Back To the Office, But It Won’t Be Easy
Most CEOs would prefer to see more than half of the workforce back in the office for two or three days, according to Casey Quirk.
Two and half years after the beginning of the pandemic — and the mass migration into remote work — some of the biggest asset managers have decided that it’s finally time to get back to the office.
Most asset management leaders have implemented a hybrid work model that requires employees to spend at least three days in the office, according to a recent report from Casey Quirk, which is part of Deloitte. The report is based on interviews with executives from 28 large asset managers that together employ over 160,000 people and manage approximately $48 trillion in assets.
According to interviews conducted by Casey Quirk, most CEOs at top asset management firms would prefer to see more than half of the workforce back in the office for two or three days. While some are adamant about returning to the office five days a week, and others are open to being fully remote, the “3-2 model” — meaning three days in the office and two days remote — has emerged as the most popular choice.
“The Fall and Winter of 2022-2023 will likely prove to be a pivotal moment in the history of the asset management industry and its approach to workplace policies,” the report said.
Colin Sullivan, manager at Casey Quirk, said that he’s noticed a sharp shift in recent months in the attitude of top executives toward remote work. “The conversations stopped being about philosophy and started to be around tactics,” he said. Back in January 2021, C-suite leaders were still debating the necessity of going back to the office. But since early 2022, the conversation has revolved around how to implement a successful back-to-the-office policy. The change is partly due to declining revenues in the asset management industry as macroeconomic conditions deteriorate, he added.
“For a lot of leaders, that signals a flashing alert, and they need to start asking [themselves], what do I need to change? For many people in the industry, that first lever was getting people back in the office,” he said. “For them, it seemed there was a direct relationship between productivity and the physical presence in the office.”
Not all roles in the asset management industry will be affected equally. According to Sean McKee, who leads public investment management at KPMG, front-office roles like portfolio managers have the least negotiation power in remote work. Back-office roles, such as accountants and tech service providers, are more likely to move to another company if they don’t like the current workplace policies. “When you’re a higher-paid employee, like a portfolio manager, it’s hard to switch companies and get the same [compensation],” he said.
The call to go back to the office also comes at a time when asset managers of various types are taking a hard look at the highly decentralized work environment. As early as late 2020, BlackRock’s Larry Fink said that he was “worried” that remote work might jeopardize corporate culture and have a negative impact on new hires. In December, a KPMG survey showed that only 10 percent of hedge fund managers expected to work from home full time. Some institutional investors are also concerned about employee mental health in the remote setting, according to a Nuveen survey in March.
Besides concerns over corporate culture and employee burnout, decision-makers in the asset management industry also cited better innovations, teamwork, and apprenticeship as reasons for returning to the office. Some also pointed out that it’s easier to resolve conflicts face-to-face than it is in a completely virtual setting, according to the Casey Quirk report.
But it won’t be easy to put the brakes on the remote work model. Companies that rush their employees back to the office risk losing talent, especially those burdened with more caregiving responsibilities.
If asset managers want to have a higher success rate in urging employees back to the office, they need to do more than just make it a mandate. They should clarify the policy, have open discussions with employees, adopt better hybrid technology, and even redesign the office space, according to Casey Quirk.
“The give-and-take between leadership teams and employees around in-person work is now entering a critical new phase,” the report concluded.