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Flexible work on Wall Street is here to stay, whether bosses like it or not

As 2021’s dealmaking boom went bust this year, big bank chiefs flocked to nix virtual work policies and summon staff back to offices.

But droves of Wall Street employees are resisting those mandates as the future of work evolves. On Wall Street as in most corporate settings, the pre-pandemic office shows few signs of roaring back.

A survey of employees across the financial industry published last month — covering institutions including the likes of Goldman Sachs, BlackRock, and JPMorgan — found 95% of respondents favored hybrid work, while only a handful backed a full-time office return.

The study, conducted by Women in Banking and Finance and the London School of Economics, saw none of the 100 participants, however, call for fully remote setups.

“Experimentation within firms is the best way to understand what is needed for operations to run smoothly while allowing for maximum productivity,” authors Dr. Grace Lordan, Dr. Jasmine Virhia, and Yolanda Blavo said. “Leaders need to let go of wanting to know what their team is doing every second of every day and focus on what they’re achieving.”

The report underscores the struggle Wall Street institutions face in a post-pandemic world filling their offices with staff day in and day out.

NEW YORK, NEW YORK - SEPTEMBER 13: People walk past the Goldman Sachs headquarters on September 13, 2022 in New York City. Goldman Sachs announced today a plan to cut several hundred jobs this month, making it the first Wall Street firm to take steps to cut down on expenses amid a drop in volume of deals after pausing layoffs for two years during the coronavirus (COVID-19) pandemic. (Photo by Michael M. Santiago/Getty Images)
NEW YORK, NEW YORK - SEPTEMBER 13: People walk past the Goldman Sachs headquarters on September 13, 2022 in New York City. (Photo by Michael M. Santiago/Getty Images) (Michael M. Santiago via Getty Images)

Goldman Sachs Chief Executive David Solomon — among the staunchest of remote work critics in the financial industry — appeared to admit in a conference on Tuesday that even he has only managed to get employees back on site four days per week.

“We needed to create a culture of bringing people back very quickly because we thought it was hurting our competitive position as a business, and so we have nudged, cajoled, and evolved, but the bottom line is we generally are operating close to the way we operated before the pandemic — certainly Monday to Thursday," Solomon said in an interview at the Wall Street Journal CEO Council Summit Tuesday

"Our business is a professional services human capital business where 50% of the people who work for Goldman Sachs around the world are in their twenties, and they come to Goldman Sachs to have an experience, to learn, to work in teams, and to collaborate,” Solomon said.

"And if that's all fragmented, that experience breaks down, and that's a hugely important part of what Goldman Sachs is — how we serve our clients, how we operate."

Solomon — who famously called remote work an "aberration" — has pushed for a full-scale office return since last year.

The bank also lifted COVID mandates this fall, a move seen as removing the last remaining hurdles that might stop employees from daily office attendance. Still, insiders have told Yahoo Finance many workers kept flexible setups, with individual teams establishing their own rules.

3 + 2 = 5

Some firms in the financial world, however, have charted less ambitions office-attendance courses than Goldman Sachs with an eye towards finding a mandate that can actually be enforced.

Earlier this year, BlackRock ordered staff to be on-site three days per week, as first reported by Yahoo Finance. The world’s largest asset manager said that exceptions to its “3 + 2 model” — or three days in an office, two days out — would be “rare and require formal approval” through an official exception request.

“Time together is how we deliver for clients,” BlackRock's COO, Rob Goldstein, and head of human resources, Manish Mehta, wrote in an email sent to employees in September. CEO Larry Fink said the same day in a TV interview the company would take a “harder line” on bringing people back.

Chairman and CEO, BlackRock, Larry Fink speaks during the Clinton Global Initiative (CGI) meeting in Manhattan, New York City, U.S., September 19, 2022. REUTERS/David 'Dee' Delgado
Chairman and CEO, BlackRock, Larry Fink speaks during the Clinton Global Initiative (CGI) meeting in Manhattan, New York City, U.S., September 19, 2022. REUTERS/David 'Dee' Delgado (David Dee Delgado / reuters)

In a September survey, Deloitte subsidiary Casey Quirk – a consulting arm of the business that advises investment and wealth management firms – found the bulk of industry leaders have implemented a “3-days-in the office, 2-days-remote” model, even accepting that “Fridays have been lost forever.” Responses were collected from 28 of the world’s largest asset managers, per Casey Quirk, collectively managing about $48 trillion in funds.

Those which maintained a “laissez-faire” office-is-open-but-optional policy saw low attendance, with few reaching the modest 50% or more level of employees coming in one day per week, according to the survey.

Some participants remained hopeful the 3 and 2 model was an interim step to transitioning back to a five-day in-office work week.

Overall, the asset management leaders in Casey Quirk’s study said return-to-office policies have been difficult to implement without strong language.

“Interestingly our research showed that while there were some firm leaders at each extreme — those who were strident proponents of five days a week in the office, and others willing to completely rethink the traditional in-person model — most ended up in the same place for practical purposes,” the report said. "Leadership teams think that ‘3/2’ achieves a reasonably beneficial equilibrium for all parties."

How employers can support managers with remote staff, based on results from Prudential’s Pulse of the American Worker Survey conducted by Morning Consult in February 2022. (Graphic: Prudential)
How employers can support managers with remote staff, based on results from Prudential’s Pulse of the American Worker Survey conducted by Morning Consult in February 2022. (Graphic: Prudential)

'The paradigm has shifted quite significantly'

PGIM, the asset management division of insurance giant Prudential, is among prominent Wall Street names that has advocated for flexible work.

“What we have done that is a bit different from our competitors is that we have not issued mandates,” PGIM VP and head of human resources Pamela Sinclair told Yahoo Finance in an interview. “We have allowed each business leader to decide what works for them.”

The response from employees has been so positive that office attendance is near 2019 levels, Sinclair said, though emphasizing the firm does not track badge swipes to monitor who shows up, but rather for a head count on catering orders for lunch.

Sinclair said PGIM has “embedded flexibility” into its workplace for the long haul.

In its own survey of the broader corporate world conducted in conjunction with Morning Consult, the firm found attitudes about the new way of working vary widely.

For example, 57% of workers said returning on-site has increase stress and that stress could be alleviated by employer flexibility about worksite attendance. On the other hand, 47% of employees reported concerns about career advancement opportunities in a remote or hybrid work environment, and 47% feared it would be harder to learn new skills.

At the manager level, 44% said navigating remote work policies has burned them out, and the same share were concerned about falling behind in their own career development.

Overall, 78% of workers still believed hybrid work models that balance remote and in-person work will be a mainstay over the next 10 years.

“I don’t think you can ask people to work from home for two years and then suddenly say you can’t do that again,” Sinclair told Yahoo Finance. “I think the paradigm has shifted quite significantly.”

Alexandra Semenova is a reporter for Yahoo Finance. Follow her on Twitter @alexandraandnyc

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