Staff still shun London’s ‘ghost town’ finance hubs
Deserted streets, empty restaurants, shuttered stores: London’s financial districts remain largely abandoned by workers still worried about the pandemic and reluctant to return to office life.
The City, a square mile in the heart of the British capital traditionally home to the finance industry, was eerily quiet over the past week, with just a smattering of tourists strolling the streets around St. Paul’s Cathedral.
In Canary Wharf in east London’s Docklands, known for its skyscrapers housing the headquarters of major banks and related firms, it is a similar story.
The picture has not changed much despite the government encouraging employees to begin returning to workplaces since August 1 in a bid to boost the struggling British economy.
It is up to individual companies to decide how forcefully to urge their staff back and many are opting for a more relaxed approached.
“Many of our clients, particularly in finance and insurance, are not coming back to work until next year,” said Pablo Shah of the CEBR economic consultancy.
Although London’s business districts are typically more empty at the peak of summer, the city has looked like “a ghost town” recently, he added.
Part of the reason is companies have adopted remote working successfully.
Many employees have become comfortable holding meetings via videoconferencing and appear more than happy to do without the long and costly daily commutes to offices.
Fears over using public transport and childcare issues remain the prime obstacles to office returns, according to business lobby London First.
But it expects things to change more significantly in September, when children are set to return to school.
– ‘Get back to work!’ –
Only 34 percent of executives in Britain — 31 percent in London — are back in the office, a study by US bank Morgan Stanley reported this week.
The country, which has the highest death toll in Europe from the coronavirus, lags behind its continental neighbours, which have seen a majority of white-collar employees return to workplaces.
The divide between those working from home and others who have returned to offices is showing signs of causing friction within some companies, according to human resources analysts.
Katie Jacobs, from the Chartered Institute of Personnel and Development, wrote in the Daily Telegraph that it had “fractured” some work environments and anecdotally even sparked “resentment” towards those staying away.
Some tabloids have chosen their side, with the Daily Mail — whose parent company owns two free commuter newspapers hard-hit by the new work-from-home culture — running several front page and opinion articles demanding a return to offices.
“We’ve had our lunch, now let’s get back to work!” screamed the paper’s front page Tuesday, the day after the government launched a restaurant support scheme paying a chunk of diners’ bills.
However, it may be disappointed with the response.
Large companies like NatWest Bank have recommended that the majority of their employees continue to work remotely until next year.
Google, which has restarted building its huge headquarters next to King’s Cross station, is even encouraging working-from-home until next July.
– ‘Back together’ –
A change in tone is noticeable among some firms, with Barclays bank boss James Staley leading the shift.
He noted 60,000 staff are working “from their kitchen tables” and said the company wants “our people back together”.
“We also have a responsibility to places like Canary Wharf, (cities) like Manchester, like Glasgow,” he added.
Kevin Ellis, chairman of finance giant PwC, expects half of his staff will be back by next month.
But he told the Sunday Times that the shift to working from home had “bashed away presenteeism forever”, adding that three or four days a week in the office may become the new normal.
Prime Minister Boris Johnson’s government has been pushing the return to work, despite the number of virus cases starting to slowly increase, to help drive an economic recovery.
“Unquestionably it will require people to have the confidence to go back to work in a COVID-secure way,” Johnson said on Thursday.
The damage is already enormous for many businesses.
Cafe chain Pret A Manger, which has a strong presence in the City, has already announced the closure of many sites, with 1,000 jobs threatened.
The CEBR estimated the pandemic resulted in £2.3 billion ($3.0 billion, 2.5 billion euros) of lost spending in shops, pubs and eateries near London employment hubs between March and June, while the capital is losing around £178 million per month compared to pre-pandemic levels.
Without a reversal the long-term trend could be businesses which rely on young dynamic workforces being hindered by the city “ceasing to be fun”, according to Shah.
“If people don’t think London is where they want to live, the effect on London’s GDP could be a huge multiple of this,” he warned.