Based on their experiences of current COVID restricted work patterns, companies worldwide are warming to the idea of continuing remote working post-pandemic. This has created lively debate about remote working, burnout and the practice of regionally weighting salaries.
Bang on trend, Spotify announced last week that they had launched their work from anywhere programme. Their 6000+ employees can choose where they work (remote, office, co-working) and depending on the job, will still be paid the equivalent salary as in San Francisco or New York offices.
Spotify and Salesforce are very visible early adopters of full-blown programmes, but financial services companies are also getting in on the act with the likes of Revolut committing long term to full-time remote working.
In a talent market as competitive as financial services in the UK, expect a significant number of employers to follow the trend. We explore some of the potential trends and opportunities.
- With over 60% of financial services jobs already based outside of London, we think the areas of greatest salary uplift would be established financial services hubs outside of London. Salaries for specialist roles have been rising in Bristol, Manchester, Cardiff, Birmingham, Leeds, Edinburgh and Glasgow over recent years and we would expect this trend to continue. Regional centres for risk management, compliance, client money are well established in Manchester and Leeds, and technology hubs have developed in Bristol and Cardiff. As employers take advantage of remote working candidates in any locations, they will look to move London salary costs to the regions and these hubs and centres will continue to grow.
- Since March 2020, over a million people have left London. Many are foreign nationals returning to their home countries but anecdotally, many are young UK nationals looking for a better quality of life. A correction of London property and rental costs may take place but it is unlikely to be significant as foreign investment continues in the capital. What’s more likely is that regional property values will continue to grow and there may be a gradual reduction in the disparity between London and regional salaries, probably created by faster rates of salary increases outside of London, rather than a reduction in London salaries.
- There will be a surge in salaries for specialist roles in the regions, where potential employees live between competing regional hubs, for example between Newcastle and Leeds, or Manchester and Leeds. There may also be an interesting interplay between locations. For example, if Leeds and London grow as green finance hubs, expect them to compete for talent across the UK. With completely flexibility in work location, we’ve already seen that competition for specialist skills, such as CASS, between investment platform providers in London, Edinburgh and Bristol.
- Expect new market entrants to spring up outside of the usual financial services hubs, locating themselves close to top universities. These new entrants will adopt a “talent-first” approach, hiring local graduates and also investing in great technology, allowing them to hire experienced people wherever they live. In existing financial services hubs such as Manchester, some industry-academia partnerships are already established, and we expect it to spread to new towns and cities where universities have strong technology programmes. This presents a great opportunity for firms, as only 30% of the top ten technology universities are located in a financial services hub.
- As larger financial services companies adopt full-time flexibility, expect them to take advantage of their smaller centres in regional locations. We expect them to leverage this presence, using these offbeat locations as a co-working space to attract talent that can be both expensive and hard to find in their HQ locations.
- We think the norm will be a blended flexible working approach for almost all firms and for almost all roles. In a recent PwC survey, over two-thirds of financial services leaders were working towards this goal. Many, if not most, people will still be attracted to the buzz of the city and camaraderie of an office environment but also crave the balance they get by working at home. Employers who fail to embrace flexible working will lose out on the best talent.
Despite long-held concerns, full-time, and part-time remote working is here to stay and is likely to be adopted by most companies and for most roles. The reality is that people are at least as productive, if not more productive than ever, allaying the fears held by many leaders.
For companies who adopt it correctly, the opportunity presented by full-time or part-time remote working is enormous. Access to talent no longer needs to be a blocker to strategy execution. Regardless of a company’s adoption of remote working, HR and Talent Acquisition teams should be considering a couple of preparatory steps.
- Improve the reach of talent acquisition strategies. FS companies in London now need to build relationships with the best talent in Edinburgh, Manchester and Leeds for example. They also need to think about engagement strategies for attracting talent in regions where they aren’t known as an employer of choice.
- An accurate picture of real-time salary data, relevant market information and benchmarking for all target talent markets.
- Carry out a review of employees in critical positions and with those with very niche skills to ensure that reward and remuneration for those people is broadly equivalent to those in other regions. Whilst regional companies may be the employer of choice in a town or city at the moment, that advantage starts to disappear when competitors adopt fully remote working.
The final thing to consider is ensuring balance happens. The benefit of home working has also become the downside and stories of burnout are widespread. Employees are working longer hours, which regularly morphs into seven day working weeks. Week in and week out.
Companies intending to adopt remote working post-pandemic might consider their duty of care to employees, as digital technologies extend working hours either explicitly or implicitly. There are some examples which might inspire UK employers, companies such as VW do not allow emails to for some employees outside of working hours and there is a move by employers, both in the UK and globally, to condense five days’ work into four days thereby creating longer downtime for recovery and increased productivity.
In the reshuffle, it’s important to ensure that balance is achieved.
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Topics: Talent Solutions