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Business News/ News / World/  Finally, Wall Street returns to the office
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Finally, Wall Street returns to the office

A year after the virus struck, employees are heading back to the workplace. Banks’ political funding is back too.
  • Wall Street firms are quietly preparing to resume political giving in the next few months, marking an end to the freeze that began after rioters stormed the US Capitol in January 2021
  • The finance industry’s determination to bring workers back is in sharp contrast to the plans of Silicon Valley’s large employers. (Photo: Getty Images)Premium
    The finance industry’s determination to bring workers back is in sharp contrast to the plans of Silicon Valley’s large employers. (Photo: Getty Images)

    NEW YORK : New York City is reopening, vaccinations are accelerating and spring brings with it an air of optimism. For Wall Street’s banks, that means a return to offices may finally be in sight.

    At JPMorgan Chase & Co, hundreds of interns are set to work in the lender’s New York and London offices in the coming months. Citigroup Inc. is providing workers with rapid covid tests as it sketches out its plans to safely return people to its buildings. Goldman Sachs Group Inc. has said it hopes to have more employees back by summer.

    One year aftercsent employees home in droves to stop the spread of the novel coronavirus, the prospects of a broad return are starting to get clearer—and not a moment too soon for some companies in the industry. From Zoom fatigue to the exhaustion of jobs colliding with home life, many bankers say the strains of long-term remote work are growing for bosses and underlings alike.

    There are exceptions, and signs of growing flexibility, as companies such as Apollo Global Management Inc. consider hybrid models. But as other industries look at a dramatic reshaping of the nature of work in the post-covid world, the stance of New York’s financial giants is clear: employees should be at offices. It’s just a matter of how quickly—and safely—their leaders can get them there.

    “It is very much our goal to be back in the office together," Evercore Inc. co-chief executive officer Ralph Schlosstein told Bloomberg. “We’re encouraging everybody to get vaccinated."

    In another sign of a return to normalcy, Wall Street firms are also quietly preparing to resume political giving in the next few months, marking an end to the self-imposed freeze that began after rioters stormed the US Capitol in January.

    Back to work

    A return to work would come after many fits and starts and is dependent on a virus that has proven difficult to control. Indeed, HSBC Holdings Plc’s main Hong Kong office was closed until further notice this week after three people working in the building tested positive.

    Wall Street tried to cajole bankers and traders back last fall, when cases were dropping and shops and restaurants began to reopen, only to see those plans falter as covid-19 roared back in the winter. As of 3 March, only 14.5% of New York-area office workers were back, according to security company Kastle Systems.

    But this time is likely different. Vaccines have arrived and President Joe Biden has asked states to ensure that all adults are eligible for shots by 1 May. New York is finally set to reopen its public high schools for in-person learning. Last week, ridership on the subway reached its highest level since the start of the pandemic.

    Workers are increasingly eager to get out of the house and back on the road to see colleagues and clients, said Brian Chin, who leads Credit Suisse Group AG’s trading and investment-banking arm. “There’s only so many Zoom calls you can do," said Chin, who has said he hopes to get employees back in the office soon. “I do worry about our people."

    Banks remain wary of setting firm dates of when they’ll reopen offices, and the process could stretch for many months. Still, the prospect of companies having to welcome a second class of virtual interns and analysts brings added urgency. In pre-covid days, newcomers used to learn by pulling up a chair behind a senior trader or by tagging along during client meetings. That’s a model that’s harder to replicate in the world of video conferencing.

    “It’s important to be together for collaboration and communication," said John Buchanan, chief operating officer and head of strategy for Mizuho Americas. “And one of the big things is training our younger folks. This is an apprenticeship business. People learn from their mentors."

    Wells Fargo & Co. CEO Charlie Scharf said Wednesday that roughly 200,000 of the bank’s employees are continuing to work remotely, and that life is unlikely to return to normal until around the end of summer, when more people are vaccinated.

    “We’re going to bring people back when it’s safe, and we’re going to give people notice," Scharf said in a Bloomberg Television interview, adding that he’s “not interested in rushing people back" to offices. “We’re going to play it by ear, and it’s going to be city by city, state by state, and we’ll make those decisions when we think it is safe."

    In some ways, banks might not have a choice but to bring back some workers. Historically, traders and certain support staff were required to be in the office so that companies could more easily monitor their activity for regulatory compliance. As the pandemic swelled in the US last year, Wall Street received special dispensation from regulators, including the Financial Industry Regulatory Authority, to allow its traders to work from home. Now, the agency is weighing whether it will allow remote work on a permanent basis.

    The WFH divide

    The finance industry’s determination to bring workers back is in sharp contrast to the plans of Silicon Valley’s large employers, many of whom now plan to keep more of their workers at home on a permanent basis, said Rob Dicks, Accenture Plc’s talent and organization lead for capital markets.

    Facebook, for instance, has said that as many as 50% of its employees may eventually be remote workers, while Twitter staff can work from home forever if they’d like. Salesforce.com Inc, San Francisco’s largest private employer, is adopting widespread flexible work after the pandemic ends.

    “Here’s where you see the split between the banks saying, ‘Yes, but we want to see you here,’ and the tech firms saying, ‘Hey, you’re probably right, you have proven, across teams and across individuals, you have the ability to work from home,’" Dicks said, adding that finance companies may have to adapt to recruit in-demand engineers and other technology workers.

    Elsewhere, Ford Motor told employees Wednesday they can continue to work from home, allowing more than 30,000 to use the office only when they need to, even after the pandemic is over. Some financial firms have already said they plan to introduce more flexibility. Apollo will test giving employees the option of working remotely two days a week for the rest of the year. The brokerage BTIG LLC has said that it expects that as many as half of employees will choose to incorporate remote work into their regular schedules even after its offices reopen.

    “I think that most people will try hybrid schedules, especially initially, to see if that approach to work is more rewarding," said BTIG chief operating officer Jennifer Mermel. “For us, the biggest change in thinking throughout the pandemic is the idea that everybody doesn’t have to report to the office in order to be connected."

    Even some of the staunchest supporters of office life have seemed to soften their stance. JPMorgan CEO Jamie Dimon said this month that some of his employees might split their time between remote work and coming into the office. “There will be a large portion who permanently work in the office—think of our branches, cash management, probably most of the trading floor," he said in a Bloomberg Television interview.

    Mizuho’s Buchanan said there’s only one thing he knows for sure. “I’m 100% confident that we will not be 100% work from home nor will we be 100% in the office," he said. “That’s a wide range."

    Political funding

    The recent pause on political action committee contributions, touted by major financial companies like JPMorgan Chase & Co., Goldman Sachs Group Inc. and BlackRock Inc., alarmed lawmakers in both parties, given how much of their campaigns are bankrolled by deep-pocketed corporate donors.

    Yet, it was never meant to be a shutdown of the Wall Street money machine, which contributed $787 million to the 2020 election, people familiar with the matter said. Instead, it was about publicly showing customers and stockholders that they were disgusted with the armed insurrection and the Republicans who directly or indirectly backed the effort.

    Some of the 147 members of Congress who voted against certifying the election for Biden will remain on what’s been dubbed the “no-fly list," a likely permanent ban on corporate political action committee (PAC) donations.

    PACs, which rely on voluntary donations from employees, are used by in-house lobbyists to buy access to a politician’s fundraising breakfast, dinner or ski trip. Many PACs balance donations between Republicans and Democrats. Their bipartisan nature makes PACs less controversial inside companies where people’s politics and party affiliation vary. However, with the polarization of the Trump era, that’s become a tougher sell.

    Craig Engle, a political lawyer at the Arent Fox law firm in Washington, says he expects PACs to resume donations in earnest next month, but the memory of the insurrection will make it difficult to resume giving to some of the 147 senators and representatives and senators.

    Big banks, hedge funds and asset managers have always had other ways to keep the dollars flowing to members of Congress, including fund-raising events that can bring in much more money than a PAC can donate. Wall Street firms also took advantage of a natural lull in the first few months after an election.

    There is sparse data available on corporate giving so far this year, with some company PACs not scheduled to report to the Federal Election Commission until 31 July. But interviews with more than a dozen executives, lobbyists, and campaign finance lawyers show that the flurry of corporate announcements wasn’t part of any strategy for firms to take their money out of politics. And most had plenty of back-up for making sure they maintained influence in Washington.

    Charles Schwab Corp. was the only large brokerage that actually got rid of its PAC after the riot. It promised in a January statement to donate the remaining proceeds to the Boys & Girls Clubs of America and historically Black colleges and universities.

    Notably excluded from the new policy were individual employees, including Charles Schwab himself, one of the firm’s founders and chairman and one of the biggest political donors in the country.

    Over the past two years, he and his wife, Helen, made $18.7 million in contributions to Republicans, largesse that dwarfed the roughly $500,000 that the company’s political action committee doled out to federal candidates and committees, according to the Center for Responsive Politics, which tracks campaign finance.

    The entire episode of publicly pulling donations could pose additional risk for Wall Street by alienating Republicans who traditionally have been the industry’s biggest supporters.

    The move was a “huge miscalculation," said Sam Geduldig, who used to lobby for Goldman, coming at a time when Republicans are becoming more populist and anti-big bank. Many Democrats feel the same way, he pointed out.

    “Is there a better position in 2021 than for a politician of either party to say, ‘Goldman Sachs won’t give me money and I don’t want it anyway?"’ he asked. “Now they can run as martyrs."

    Executives at Goldman Sachs and JPMorgan, for example, regularly host get-togethers with lawmakers who travel to New York looking to fill their campaign coffers. Those meetings can be more lucrative for the lawmaker than a corporate PAC check. A PAC typically can give a maximum of $20,000 to members of Congress: $5,000 for the primary, $5,000 for the general election and $5,000 per year to a member’s leadership PAC.

    But a dinner with 10 finance executives, each bringing the maximum $5,800, can net $58,000.

    As each company is reviewing contributions, executives and lobbyists say they are all looking to see what the competition is doing. Nobody really wants to be the first to crank up the money machine. One consensus, they said, is to move slowly. That likely entails starting up the PACs sometime in the second quarter with donations mainly to non-controversial members of Congress.

    The floodgates, most people predict, will open once Democrats start to craft legislation—on taxes, for example—that targets businesses and wealthy individuals, which the Biden administration has said it is considering.

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    Published: 18 Mar 2021, 09:39 PM IST
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