Goldman Sachs CEO comments highlight need for home working balance

The remote working revolution has been prominent in the banking sector and organisations have a balancing act to perform once the pandemic passes

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The remote working policies and cultures embedded in the banking sector during the Covid-19 pandemic may not become the new normal everyone expects.

Despite the success of home working and technologies such as Zoom that support it, a balance will be required and there will not be a one-size-fits-all solution when it comes to remote working strategies.

Not everyone is riding the wave of announcements of baked-in remote working strategies. Goldman Sachs CEO David Solomon described the en-masse move to home working during the pandemic as an “aberration”, which must be quickly corrected.

Millions of people have been working remotely for the past 12 months as the risk of spreading Covid-19 forced governments to instruct people to work from home if possible.

In fact, businesses were ahead of the government in many cases, sending staff home before the first lockdown was announced last March.

Since then, there has been growing acceptance of the advantages of home working, and the tech industry has seen an explosion in demand for collaboration and video-conferencing technologies.

“For a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal. And remote working is not a new normal. It’s an aberration that we’re going to correct as soon as possible”
David Solomon, Goldman Sachs

Banks, in particular, have been talking up the success of their remote working strategies, with some committing to it for the long term. Banks including ABN Amro in the Netherlands, Denmark’s Danske Bank and Société Générale (SocGen) in France are making permanent changes to how their staff work, following the success of remote working during Covid-19 lockdowns.

But technology can’t do everything, and there are dissenters – notable ones, at that. The CEO of Goldman Sachs, one of the world’s biggest banks, recently referred to the home working revolution as an “aberration” and “not the new normal”, as it is often described. This is despite the company operating successfully with less than 10% of its almost 40,000 staff in the office for most of last year.

Solomon told a conference recently that the company would move people back to its offices as soon as possible. “For a business like ours, which is an innovative, collaborative apprenticeship culture, this is not ideal,” he said. “And remote working is not a new normal. It’s an aberration that we’re going to correct as soon as possible.”

Solomon said he was concerned about the thousands of new recruits who join the company and require mentorship. “I am very focused on the fact that I don’t want another class of young people arriving at Goldman Sachs in the summer remotely,” he said.

But staff in the UK banking industry might be disappointed if remote working policies do become a false dawn. A recent KPMG and Financial Services Skills Commission (FSSC) survey found that half of workers in the UK’s financial services sector want to continue to be able to work from home for at least part of the week when the pandemic passes. It also found that 26% of staff want to work from home permanently and 13% want to relocate.

But one senior IT professional in the UK financial services sector said it would all depend on the individual business and there was a “delicate balance required”.

Read more about the new normal of work

“Goldman Sachs and some of the other investment banks rely heavily on graduate recruitment each year,” he said. “That is the difference between them and other businesses because graduates need a lot of physical oversight.

“But for a lot of other financial services firms where they have a different staff profile, with few graduates and mainly experienced staff, it is a different situation.”

The IT professional said businesses will try to balance the cost of offices, which is quite high, with who can and who can’t work from home. “I think we will see some polarisation, with big investment banks retaining graduates and their trainers in the office, but other functions working remotely.”

Getting the balance right will be vital to retain competitiveness, he said. “If one bank or institution can offload half its office, that is a huge profit advantage. Those that can’t will have a cost base that is too high.”

It seems there will be a compromise, with decisions required on striking a balance between home and office working.

When it comes to remote working blueprints for enterprises to follow, there are already some publicised approaches.

France’s SocGen is allowing staff in its home country to work remotely two days a week, with employees given money to help them get the technology they need to work from home.

Meanwhile, in the Netherlands, ABN Amro is redesigning one of its facilities to support the increased adoption of remote working. The bank announced plans to cut 2,800 jobs – 15% of its workforce – and sell off its headquarters in the Zuidas business district of Amsterdam, redeveloping another office in the city to support remote working. As a result of these measures, ABN Amro aims to slash €700m from its annual costs, adding up to a predicted €4.7bn by 2024. 

Last year, Denmark’s Danske Bank said sending thousands of staff from the office to work from home would have a lasting impact on how work was structured and conducted. CEO Chris Vogelzang said at the time: “This experience has proved that there is so much untapped potential in the virtual workspace that we need to explore and use to create a more attractive and flexible workplace, while still maintaining the inspiration, energy and social connection that comes with belonging to a physical team and environment.”

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