Finance

Wall Street’s return to the office is going to be weird

  • Many Wall Street firms are clamoring to return to the office, but it hasn’t been a smooth transition.
  • Mask mandates, unofficial office returns, and juniors craving training are all throwing a wrench in plans.
  • Here are setbacks Wall Street firms are running into as they try to return to in-person work.

After months of false starts, only one thing is certain about Wall Street’s return to the office: It’s a big mess.

Depending on where you work, you might need to provide proof of vaccination. You might need to wear your mask in the office — but maybe only sometimes, around certain people, or when you’re not at your desk. You might not even know when and where you’re supposed to show up to work. With constantly changing return-to-office dates filled with caveats and exemptions, many Wall Street employees feel like they’re experiencing whiplash.

The pandemic forced radical overnight changes in the financial-services industry, which has long resisted remote work and placed a premium on being in the office. The industry quickly adapted: Over the past 18 months, many Wall Street firms delivered record-setting quarterly financial results with their workforces at home.

But that hasn’t stopped leaders from large firms like Goldman Sachs, JPMorgan, and Morgan Stanley from lamenting that remote work isn’t working and making plans to return to the office. Those plans, which date back to last summer, have been fraught with setbacks, though.

In early September 2020, a coronavirus case sent JPMorgan bankers home mere days before even more employees were told to come into the office. By winter, the push had stalled.

This spring brought renewed calls to bring back in-person work as coronavirus cases plummeted. JPMorgan, Goldman, Centerview Partners, Evercore, and Blackstone have all reopened their offices in recent months.

Then came the Delta variant. The highly contagious strain of the coronavirus now accounts for the majority of new infections, sending case counts soaring and companies scrambling to change their plans once again.

“We just don’t know, and we don’t know what we don’t know,” Gary Goldstein, CEO and cofounder of the Wall Street recruiting firm Whitney Partners, told Insider. He said that with Delta cases on the rise and the constant threat of new COVID-19 variants, it could be months — or years — before the future of working on Wall Street becomes clear.

Earlier this year, bank leaders made it clear they were all-in on office work. JPMorgan CEO Jamie Dimon said this spring that employees were more likely to contract COVID-19 while out partying than working from the office. Goldman CEO David Solomon said that remote work is an “aberration” that fails to train junior employees. And Morgan Stanley CEO James Gorman has also turned the heat up on staff, saying that “if you can go into a restaurant in New York City, you can come into the office.”

Even Citi — which was one of the few Wall Street giants this spring to say it was embracing flexibility and permanently adopting a hybrid model with both remote and in-person work — announced this month that come September 13, the firm will require staff to come into the office two days a week.

But if the past year and a half is any indication, Wall Street return plans will keep changing, as multiple factors threaten the return to the way things were before.

Here are the daunting challenges Wall Street firms are facing in the return to the office right now:

Delta led Wells Fargo and BlackRock to push back their return-to-office plans — and others could soon follow

The Delta variant is throwing a wrench into the most carefully laid plans.

Wells Fargo and BlackRock, which had both been banking on post-Labor Day returns, recently pushed their full office reopenings back to at least early October. Wells employees who are still remote now have until October 4 before they have to be out meeting with clients or in the office five days a week. And at BlackRock, employees have the choice to work remotely until October 1.

Executives cited Delta — which can be transmitted even by vaccinated people — as the reason to delay plans. It “raises concerns about returning to the office — even those who are vaccinated and particularly for those of you with dependents at home who are currently ineligible for the vaccine,” senior managers at BlackRock said in an August 5 memo.

The delays come after a big push this spring for Wall Street firms to shore up their return-to-office plans. JPMorgan, Goldman, and Blackstone led the charge in calling employees back in May and June, while others, like Bank of America and Credit Suisse, targeted a return by Labor Day.

But as the Delta variant has once again caused COVID-19 infections to spike — the test-positivity rate in New York was increasing last week, according to the the city, and 90% of new cases are attributed to the Delta strain — a return to normal office life this fall is far less certain than it was just a few months ago.

“It’s a little too early to say what’s really going to happen,” said Jeanne Branthover, a managing partner and global leader of financial services at DHR International. “People are definitely going to change their tune on what their staff has to do.”

Morgan Stanley, whose CEO has gone so far as to say that employees who want to make a New York salary must live and work in New York, is continuing to be cautious.

A memo sent this week that was reviewed by Insider and first reported by Bloomberg said the firm is continuing to evaluate return-to-office prospects — meaning that for now, employees are free to visit as many restaurants as they please without needing to show up to work in person.

“While significant progress has been made in the last six months, new circumstances including the rise of the Delta variant and the recent slowing of vaccination rates are now influencing our return to workplace planning,” the Morgan Stanley memo said.

But plenty of employees are already in the office

While many firms are rethinking their return-to-office plans, plenty of Wall Street employees have already been physically back at work.

Staffers at Blackstone, Goldman, and JPMorgan have been in the office at least on a rotational basis for months. JPMorgan CEO Dimon has said that he’s been in the office every day since June 2020.

Even at firms where everyone is not yet required to return, some have been voluntarily coming back into the office. BlackRock employees can choose to work remotely or in the office until next month, according to the August 5 memo.

Wells Fargo in July laid out optional return dates for some corporate and investment bankers in New York and North Carolina ahead of the now-delayed required return date. The updated guidance does not apply to any employees who are “currently reporting to work in-person or participating in voluntary early returns,” according to a memo sent to US staff August.

“We believe that being physically together is critical to the work we do supporting clients and our team, as well as a cornerstone to how we develop talent across the banking platform,” the memo said.

Current Wall Street employees and those looking for jobs fall into one of two camps, Branthover said — those who want to work remotely, and those who want to go to the office because they prefer in-person work and find remote work difficult.

“When it comes to the large investment banks, whether you’re in the office or meeting with clients, it’s heavy on relationships, and that’s what IB is all about,” she said. “The concern is that if everyone is remote, you lose a lot of the day-to-day mentoring, socializing, and relationship building. It’s a real concern at the investment banks, and many employees at all levels miss that and want to go back for those reasons.”

Firms are reinstating in-office mask mandates for all employees, regardless of vaccination status

JPMorgan was one of the first firms to announce concrete return-to-office plans, and the employees have been back in the office, at least on a rotational basis, since May 17. Dimon had previously anticipated that all employees would be maskless in the office by October and that the workplace would feel more normal by November.

Those predictions seem further off these days.

The firm — which has been allowed to operate at full capacity without masks since May 19, the date New York lifted capacity restrictions for businesses — took a step backward this month when it announced that it was once again requiring masks in the office, even for vaccinated employees.

“Given that the CDC has stated more than 80% of counties across the U.S. have substantial or high community transmission rates, we will follow this guidance nationally for the time being,” JPMorgan said in the memo announcing the news, which was first reported by Reuters.

A JPMorgan spokesperson told Insider after the announcement that the firm wasn’t making changes to its return-to-office policy.

Some firms are taking a harder stance on vaccinations for employees. JPMorgan is barring unvaccinated employees from attending work gatherings with more than 25 people, while Morgan Stanley, Bank of America, and others are now requiring vaccinations for anyone stepping foot in the office.

Senior bankers want to work remotely, but junior bankers are missing out on important training

Solomon, Goldman’s CEO, has said that in-person work is crucial for banks’ apprenticeship-style coaching of promising young talent.

But many senior bankers say the option to work from home is increasingly important to them and that they’re just as productive doing their work remotely.

The tension is a pressure point for banks worried about their long-term success.

“Juniors will suffer in their ability to grow,” Robin Judson, the managing partner and group founder of the search firm Robin Judson Partners, told Insider. She said that while hybrid-work models some banks are considering will likely appeal to senior bankers, who travel often in normal times and can effectively complete most of their work from home, young talent will suffer.

Junior bankers hit a breaking point this spring, after a year of tackling a relentless deal market and putting in long hours at home alone, without the camaraderie and support that comes with seeing their peers in the office.

Goldstein, the recruiter, said that working remotely means instead of being on the road for four or five meetings across the country in a week, with plenty of time in between to put together books or presentations, bankers who don’t travel might be pulled into five times as many projects.”Analysts and associates don’t want to do it anymore, and a lot of younger people have decided to exit the industry altogether,” he said.

Banks are considering more flexibility for existing bankers, but they risk losing top talent if they won’t allow remote work for new hires

Some banks that have been vocally against remote work might be giving more flexibility to current staff to come and go as they please — such as Goldman, where bankers are floating in and out of the office on an ad hoc basis despite clear guidance to return full-time.

But for potential new hires, some firms are drawing a line in the sand — and that’s turning off rainmaker candidates, Branthover said. As banks push to get regular face time with potential hires, for some senior bankers, it’s a dealbreaker.

Candidates are pushing back against inflexible job offers and are turning down opportunities that are requiring in-person work full-time, she said.

“I’m not talking a few people; I’m talking most people,” Branthover said.

While some firms instead are coming up with larger compensation packages in lieu of remote-work promises, they’re not always enough to entice all bankers back to a full-time schedule complete with regular commutes to Midtown Manhattan, she said.

But even as some bankers turn down inflexible offers, Goldstein, the recruiter, added that it’s still too early to tell what remote-work policies firms will end up with when the pandemic is in the rearview mirror.

“Some people clearly feel this Delta variant will change things again, and some firms are reluctant to push people back — although others can’t wait to get back to the office as soon as possible,” he said. “Right now, the greatest concern is that we’re going in the wrong direction by heading back to the office now.”

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