These lyrics, written and originally sung in 1971 by the late Marvin Gaye about the environment, resonate with where we find ourselves today tackling COVID-19 and its fall-out. Things for all of us are most certainly not what they used to be.
The ‘new normal’ is slightly abstruse language when used to reference our places of work. Has there ever been a ‘normal’ in the truest sense when it comes to our evolving workplace? Without doubt we will experience dramatic change to our habits and protocols to ensure social distancing. A mix of new forces will restructure not only the physical workplace itself but crucially how this space is populated; directly or indirectly. Over the past decade or so we have become acclimatised to the idea of working from home, yet previously this has rarely exceeded a handful of days a month for most. From Compliance and Financial Crime perspectives, remote working has historically been challenging, and not always embraced with enthusiasm by all key stakeholders. Yes, different areas of both can better lend themselves than others to working remotely, but overall, face-to-face contact has been the ‘normal’ preference.
What we now face is a mix of new paradigms. Parallel working will see employees continue to be split into teams, as we saw starting to appear before the lockdown commenced. Even with the remote-working technology available, will the City be able to function as effectively with a new model somewhat akin to workers swapping shifts? Will some of those on the work from home shift see their working week reduced by perhaps a day or two, to help raise capital levels, and experience something comparable to a ‘contractor’s haircut’? Will those working from home be reluctant to do a shift back in the office until the ‘all clear’ is indeed sounding all clear? Does having a Team Alpha and a Team Bravo split an organisation into competing sub-teams, with henceforth different cultures and values? Lots of questions and known unknowns are around the corner. The way to best confront them all is adhering to the maxim of flexibility.
With that in mind, flexible hiring must be a potential solution, albeit not a solve all, where budgets can be adapted to include not only permanent and contractor headcount, but a more agile on-demand headcount. The City’s regulatory sector has seen its share of headcount reductions over the last few years. With understandable competition, and often push-back, for Compliance and Financial Crime headcount budget, an alternative short-term solution should be considered. One of a more flexible and agile regulatory headcount coming from an on-demand budget pot. The sports teams we follow already exemplify this through their bench. If a replacement is needed, a quick decision is made by a manager, they are brought onto the pitch and without recourse to decision by committee. There is a huge amount of regulatory expertise on the bench and offering firms subject matter expertise, which is agile, quick to deploy and essentially, on-demand.
The economic shock we now confront is already wreaking havoc across many sectors. GDP is predicted to drop 14% during 2020 and unemployment to soar to 9% (higher than the 2008/9 financial crisis but hopefully the UK growth rebound during 2021 will be as strong as the Bank of England suggests). How London’s financial services firms have adapted their recruitment is already being seen. New hiring has been frozen where it can be, and the likelihood of further (in the case of HSBC delayed) redundancies is certainly back on the cards, adding further to those of earlier this year and last. Recruitment activity across the UK has dropped at the fastest rate since 2009 (albeit there being regional and sector disparity).
That said and on a more positive note, we are still seeing some new and replacement hiring within the regulatory sector; both permanent and temporary. A few senior level movers having accepted new roles at the start of the year has duly created a few gaps. Whether 2020 retains the trend for exploring ‘internal mobility’, or whether a supply of suitably qualified internal options have been exhausted across firms, remains to be seen.
We believe there is an opportunity to potentially leverage the new paradigm, in order to manage regulatory risk with on-demand resourcing solutions, which can act as a quick solution, albeit short-term, whilst IR35 is adjusted and permanent and contractor hiring debated. Onboarding aside, the real challenge will be when, how and in what numbers the currently empty desks are occupied once again.