Nearly three quarters of City firms reviewing office space provision

Canary Wharf

Nearly three-quarters of City firms are reviewing how much office space they really need following a boom in home working during the pandemic, new research shows.

The latest CBI/PwC financial services survey found 74% of companies – particularly banks and insurance firms – have been taking stock of their office requirements in the hope of either using the space differently, or reducing it.

Around 88% of the 133 financial services firms polled for the survey said the Covid-19 pandemic had resulted in a greater shift towards remote working. Nearly half of those surveyed said that more than 90% of their workers could feasibly do their job without being in the office.

At high street lenders such as Lloyds Banking Group, Barclays and Metro Bank, branch staff – who are considered essential workers – have continued going into work throughout the crisis, but the vast majority of bank employees have been logging on remotely during the outbreak.

Firms like Schroders, the FTSE 100 listed fund manager, have told staff that they will not be required to return to the office full time even after the heath emergency has passed.

But some major banks like JP Morgan have raised concerns about the impact of home working, including the lack of mentorship for young staff, and a small drop in productivity on Mondays and Fridays. However, the Wall Street lender is still expecting up to 30% of its nearly 257,000 employees to work remotely in future, at least part of the time.

The CBI/PwC report, which polled firms in the first three weeks of September, said that around 71% of firms were now investing in their IT systems to support remote working. However, the survey also showed that City firms are planning to axe more jobs and cut back on non-IT investment amid uncertainty over Covid-19 and Brexit.

Companies are now experimenting with new and less costly ways of housing employees. Lloyds, which has had around 50,000 of its 65,000 staff work from home during the outbreak, will test whether empty space in branches could be kitted out for office workers. However, that will only start once Covid restrictions are relaxed.

Lloyds also announced this month that it was cutting 865 jobs across the UK as part of a push to simplify parts of its business.

Metro Bank will also be installing office desks in free branch space after confirming that the success of homeworking meant that staff are unlikely to return to a permanent desk and would only be in the office two to three days a week.

That shift meant Metro was able to shut its Old Bailey back-office site more than a year earlier than expected and scrap plans to rent new space for the 900 staff it would have displaced.