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U.S. Investment Banks Reluctantly Embrace Hybrid Working
"If you can go to a restaurant, you can go to the office.”
In March 2021, James Gorman, CEO of Morgan Stanley, laid down a hard line on hybrid-working for his employees at a business conference. In the following year, that hard line has softened for many investment banks.
Historically, the attraction of a job in investment banking for most people were the healthy paychecks and lavish bonuses. But the experience of the past two years has brought about a reexamination of priorities. According to a recent poll from S&P Global Market Intelligence, 56% of financial services employees said they would consider quitting over a lack of work-life balance. Growing attrition rates—popularly known as “the great resignation”—have set off a war for talent, which has led many investment firms to reexamine their policies regarding remote work.
Many of the leading European banks, including UBS Group, Deutsche Bank, Credit Suisse, and Barclays, have introduced greater flexibility in hybrid working. In April, French group BNP Paribas SA announced that it would be allowing its over 132,000 employees to work remotely 50% of the time. But American banks have not shown the same flexibility. Morgan Stanley, Bank of America Corp., Goldman Sachs Group Inc., and JPMorgan Chase & Co. have pushed for a full return to the office.
In doing so, they may be fighting the broader trend. According to a recent survey from S&P Global Market Intelligence unit 451 Research, 49% of respondents said they worked from home or remotely for at least some part of their week and 77% said they prefer to spend some time working remotely in the future. The experience of remote working during the pandemic has caused many employees and employers to reconsider the practical utility of office environments.
“I think we had this particular impetus to do more considered thinking because of the pandemic because of the shift to remote,” said Chris March, Research Director at S&P Global Market Intelligence during a recent interview on the Next in Tech podcast. “It kind of exposed how little strategic thoughts that companies historically really gave to how work actually happened, how it was organized, how it was designed, how it was executed beyond having a set of business goals.”
Having a hybrid work strategy brings its own challenges. Information security budgets tend to increase with hybrid working. While some under-represented groups search out companies with a hybrid work model, others may be excluded from certain careers due to insufficient access.
With banks facing increasing pressure on their core businesses due to weaker growth and higher inflation, it may not be worth fighting employees over hybrid work.
Today is Thursday, July 28, 2022, and here is today’s essential intelligence.
Written by Nathan Hunt.
Economy
Economic Research: U.S. Business Cycle Barometer: The Party's Over
The U.S. enjoyed its party last year, but now it's feeling the pain. After GDP expanded at an average rate of 5.7% in the past year—its highest in 37 years—economic activity has slowed considerably. A disturbing 1.6% drop in first-quarter GDP stemmed from weakness in trade and inventories, though domestic activity was healthy. However, high prices and interest rates have hurt affordability and since slowed domestic activity through June.
—Read the report from S&P Global Ratings
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Capital Markets
What Fixed Income Index Liquidity Means For Insurers
How are index-based strategies helping insurers measure and address liquidity in their portfolios? Take a closer look at the why index liquidity matters with S&P DJI's Nick Godec, Morgan Stanley's Meredith Shaw, and BlackRock's James Winslow.
—Watch the full video from S&P Dow Jones Indices
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Global Trade
What Is Driving Global Volatility: Geopolitical Constellations
Looking ahead, the world is painted as becoming more fragmented and brittle. Yet the challenges stakeholders face will be increasingly interlinked and reverberating: Climate change, supply chain interdependencies, making the energy transition, public health, and inequities will impact on each other, requiring coordinated responses.
—Read the article from S&P Global Market Intelligence
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ESG
Europe's Dominance In Green Bond Market Fades Amid Record Growth In China
Europe's dominance in the green bond market appears to be diminishing as Asia-Pacific supply picks up, driven by growth in China. European green bond issuance fell to $46.5 billion in the second quarter from $74.19 billion in the same period last year, according to the Climate Bonds Initiative, a U.K.-based green debt tracker. While Europe remained the highest-contributing region to green debt globally, its share of issuance dropped to 41.7% in the quarter from 54.8% a year ago.
—Read the article from S&P Global Market Intelligence
Energy & Commodities
US DOE Announces Next SPR Sale, Sheds Light On Plan To Replenish Reserve
The U.S. Department of Energy announced July 26 its fifth sale as part of the largest-ever Strategic Petroleum Reserve drawdown aimed at reining in gasoline prices, and shared details of its plan to replenish the SPR with a proposal that would afford DOE more buying power in the future. The U.S. will release up to 2.8 million barrels of sour crude and 17.2 million barrels of sweet crude between Sept. 16 and Oct. 21. Bids are due by 10 a.m. CT Aug. 2, and contracts will be awarded no later than Aug. 11, the department said.
—Read the article from S&P Global Commodity Insights
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Technology & Media
As Cloud Business Shines, Amazon Facing 'Many Fires' Elsewhere
Wall Street analysts expect to see downward macroeconomic trends reflected in e-commerce giant Amazon.com Inc.'s July 28 earnings report. An expected decline in discretionary consumer spending has already driven Amazon's earnings estimates and target share price down, as thin margins make the company vulnerable to short-term disruptions. Long term, however, analysts see reasons for optimism, saying market share growth for the company's Amazon Web Services cloud offering and enhancements to its Prime membership should support overall performance into next year.
—Read the article from S&P Global Market Intelligence