This week’s topics:
The future of office space in the financial sector
Tomorrow’s ECB meeting - will there be another shot of stimulus?
Virtual Reality (VR) can help train staff in a more impactful immerse way - results from our virtual learning survey
Tips on returning to work and how stress levels can decrease by going into the office
The traditionally "on-site" financial sector is addressing the shift to remote working
Isabelle Jenkins, Banking and Capital Markets Leader at PwC, said:
Under ‘normal’ circumstances (i.e. no pandemic), banks and building societies believe that nearly half (49%) of their staff could feasibly work from home on a regular basis with minimum disruption to business operations. Finance houses believe more than three quarters (77%) of staff could work remotely. The resulting potential to reduce real estate costs is highlighted by the fact more than 80% of banks and finance houses now believe only 70% or less of their current office space is essential. However, building societies believe cuts in office space are less feasible.
In turn, digital is fast becoming the default way of doing business. Even customers who had resisted change have adjusted their habits. IT is the only area of capital expenditure that banks expect to increase over the coming year. The main driver is increased efficiency and speed, with reaching new customers the next priority.
Angus Johnston, Real Estate Leader and Partner at PwC, said:
The pandemic has overturned the orthodox and accelerated underlying trends. While a lot of innovative thinking needs to happen before this translates into hard actions, there is no doubt that the genie is out of the bottle.
The old assumption about the primacy of travelling to and working from an office has been severely challenged. Those companies who can find ways of solving the regulatory, training and team building challenges flowing from having a dispersed workforce have the potential to achieve significant reductions in their property occupancy and associated cost.
As tensions between occupiers and landlords continue regarding rents, the potential knock on effects to real estate portfolios are clear. Overall, 6 in 10 respondents to a CBI -PwC poll stated only 70% or less of their current office space is essential.
64% of financial services businesses are conducting, or plan to conduct, conversations with landlords or managing agents around reviewing office space requirements.
Additional stimulus is unlikely at tomorrow’s ECB meeting
Barret Kupelian, Senior Economist at PwC, said:
Last month the ECB expanded its Pandemic Emergency Purchase Programme (PEPP). We do not expect a material change in the policy stance of the ECB this month as there’s been too little meaningful data since the last meeting.
The press conference this week is likely to be one where the Governing Council takes stock and reflects on its response to the pandemic. There could also be grounds for a mini celebration as both Bulgaria and Croatia have joined the European Exchange Rate Mechanism (ERM II) and the Banking Union, both of which are precursors to full Eurozone membership. But looking further afield, all eyes will be on two events—one economic and one political—later on in the week.
The first one relates to the release of the Eurozone flash estimate for GDP in the second quarter of this year which is likely to confirm a significant rebound in economic activity, consistent with our view of a kinked V recovery.
The second, however, will be the EU Leaders’ summit, the first in-person one since February, where the leaders will negotiate the details of the planned €750 billion COVID-19 recovery package, the majority of which consists of grants. This will be an important test for the EU and its member states.
Virtual Reality (VR) is helping to train staff in a more impactful and immersive way
Jeremy Dalton, Head of VR/AR at PwC UK, said:
Whilst many people around the world adjust to remote working, learning and living, VR offers an immersive, engaging and effective solution to immediate changes we’re facing as a result of the COVID-19 crisis.
Employees being trained using VR are more emotionally connected to their environment and more immersed in the tasks they’re working on because there are fewer distractions compared to the physical world.
PwC recently published results of a large soft-skills study examining the impact of using VR to train and improve diversity and inclusion behaviours. This is an important part of PwC’s compulsory unconscious bias training that will help in the development of our leaders.
Selected PwC employees from a group of new managers took the same training (between February 2019 and January 2020) in one of the three following settings:
Classroom (face to face learning)
E-learning (online learning)
V-learning (training using VR)
40% of the v-learners saw an improvement in confidence compared to classroom learners and 35% improvement over e-learners to act on what they learned after training in VR.
V-learning is the most cost-effective way of learning when it’s done on a large scale. At 375 learners, VR training achieved cost parity with classroom learning. At 1,950 learners, VR training achieved cost parity with e-learn. At 3,000 learners, VR costs become 52% less than classroom.
V-learners completed training 4 times faster than classroom training.
V-learners felt 3.75 times more emotionally connected to the content than classroom learners and 2.3 times more connected than e-learners.
Three-quarters of learners surveyed said that during the VR course they had a wake-up-call moment and realised that they were not as inclusive as they thought they were.
V-learners were 4 times more focused during training than their e-learning peers and 1.5 times more focused than their classroom colleagues.
Returning to offices can be daunting, but the benefits of doing so are significant
Laura Hinton, Chief People Officer at PwC UK, said:
It’s understandable people may be apprehensive about returning to offices after working from home for so long. At PwC, we’re giving our people the opportunity to dip their toes in the water if they’re comfortable doing so. Around 4,000 of our people tuned into a livestream yesterday to hear advice on wellbeing as lockdown eases and people think about venturing in.
There’s certainly no need to venture in every day but it can be really helpful for connecting with teams. It also helps support our wider communities.
So far, we’ve had extremely positive feedback from those who have returned to the office and we’re hoping that more of our people will do so.
While some have enjoyed working from home, it doesn’t come without challenges. I’ve often found the lines between work and homelife blurred and, at times, it’s been difficult to fully disconnect in the evenings.
I’m part of our voluntary biometrics project, which involves wearing a wrist device to track stress levels, the aim being to monitor how we’re coping with anxiety during the pandemic. Interestingly, my stress levels dropped dramatically on the days I was working in the office. Being able to separate work from home, at least for a day or two a week, has been massively helpful and we hope that as more people feel comfortable we can continue to welcome them safely back into our offices.
About 1,500 of our people are currently spending some of their time in offices and we expect that number to increase over the weeks ahead. We have capacity for more of our people to return safely, and will continue to monitor government guidelines for updates on social distancing requirements.
Something to listen to:
For athletes like British Athletics pole-vaulter Holly Bradshaw, COVID-19 has presented a huge physical and emotional challenge. PwC Data Intelligence Partner, Alex Cooke, spoke to Holly and her coach, Scott Simpson, about how the delay to global sporting events has impacted their training and how data has helped them adapt. Listen to the podcast here: https://pwc.to/31c9qzH
Something to read:
Video interviews, flexible working and redeploying staff are just a few examples of the rapid changes in recruitment we’ve made. Read about them in full here: http://pwctrk.co.uk/tp/rj6-Qiw5z.J.K
Manager, Corporate Affairs, PwC United Kingdom
Tel: +44 (0)7483 329628