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The COVID disruption to work has made investment industry leaders and employees think more carefully about what work might look like going forward.  The consequences of the forced experiment of remote work, the lessons learned along the way from the changes in work patterns and practices, and the social changes in worker attitudes and expectations have set the stage for a new model of working. Leaders must develop a deeper understanding of the dimensions and implications of hybrid work to sustain their firm’s edge in a world of accelerating workplace change.

The latest CFA Institute Future of Finance report, Future of Work in Investment Management, is an in-depth study examining how these trends will develop in the investment industry, using input from 4,600 investment professionals globally and leaders at investment organizations representing more than 230,000 employees.

We explored the changes investment organizations and investment professionals are likely to make as they reassess the context of careers, the content of work, and the culture of organizations, both in the near term and in the next five to 10 years.

The following is a list of key lessons for leaders, particularly related to the shift to hybrid working (generally meaning a mix of remote and in-person work), as well as the desire for more flexible working (meaning adjustable working hours).

  1. Know your people. Many organizations are assessing their employees’ interest in a hybrid working model, and 81 per cent of investment professionals we surveyed said they would like to work remotely part of the time. Among women, the level was 87 per cent, compared with 80 per cent of men.  Attitudes vary somewhat across geography and years of experience. Those with less than two years of experience in the industry were least likely to want to work remotely since it is more difficult to learn from others in a remote or hybrid environment, especially without the benefit of a robust professional network. Interest in hybrid work was highest in France (93 per cent) and lowest in China (45 per cent).
  2. Assess the effectiveness of your organization’s remote work experience. Among those we surveyed, 53 per cent said remote working increased their efficiency, and investment professionals across all roles now believe they can do a greater percentage of their job from home, supported by the experiences of the past year.  Even roles that were previously thought to be largely incompatible with remote work – such as chief investment officers, chief financial officers, and even traders – have proven to be adaptable and resilient to the remote work experiment.
  3. Consider the suitability of roles for hybrid or flexible arrangements. We found that the structure of investment professionals’ work seems to support a hybrid model. Most roles have a balance of uninterrupted time needed and time when teamwork is required. Chief executives and chief investment officers need the most teamwork. Credit and research analysts and economists are among those who need the most uninterrupted time. The least predictable jobs are analysts, economists, consultants, and CEOs, and are the types of roles that might be expected to be always accessible even in a flexible working environment.
  4. Provide managers with training on how to lead in a hybrid environment. Although a majority of investment professionals said they were more efficient when working remotely, only a third of managers thought those who worked for them had increased efficiency. Our research shows that having good leaders has always been important to retain people, but now it is also a primary motivator. Leaders’ responses—whether good or bad—to the stresses of the pandemic in their employees’ lives will have lasting effects on relationships and employee engagement. Among investment professionals we surveyed, 58 per cent are confident in the ability of leaders to manage teams in a hybrid work environment. Inclusivity in hybrid team settings and empathetic cultures will be key.
  1. Adapt client management approaches. Client-facing roles were least likely to report effectiveness gains from remote work, and there is a need to adapt communication practices and refine skills to establish new trust models with clients.  Expectations are that business travel will be permanently reduced by 25-50 per cent, and while video calls have replaced some travel, firms must think strategically about how to maintain trusted client relationships. Travel will be most needed when strategic decisions are to be made and at the start of a relationship or at major transition points. Client communication options will grow in complexity, and with this will come opportunities for firms to differentiate themselves.
  1. Learn from others. Most organizations we surveyed indicated that their policies will be changing to be more supportive of remote and flexible working as they recognize the feasibility and desirability of such policies for attracting and retaining talent. What had been case-by-case exceptions to the rule will become accepted practice by three-quarters of organizations. 
  1. Beware of the inclusion pitfalls. An all-remote environment evened the playing field in many ways, particularly in situations where meetings would have consisted of a full meeting room in the headquarters and a few people in satellite offices on the phone who were rarely acknowledged. This was not a positive for all employees however, and as different personal situations pulled some into constant multi-tasking, a two-tiered system emerged between those with the freedom to be on camera without interruptions and those whose audio-only presence limited their ability to engage. A hybrid approach will be more difficult to manage in terms of being inclusive, but this must be prioritized by leaders to create the right conditions for effective and engaging teamwork. 
  1. Remember your ESG promises. As investment organizations seek to demonstrate their alignment with ESG principles, investors are likely to note what workforce policy changes are made to support flexible work arrangements. This is a signal of the importance of managing their workforce well and considering employees as key stakeholders.
  1. Counter burnout with purpose. During the heights of the COVID pandemic, burnout became widespread, and the number of those working more than 60 hours per week nearly doubled, from 8 to 15 per cent. This was true across regions and gender and was especially prevalent among those with less than 10 years of work experience. Meanwhile, the pandemic has prompted more attention to positive organizational purpose, and there is a greater focus on outcomes that are bold and inspiring and that support belonging and motivation. While short-term business results are always in view, it is the longer-term vision that creates and sustains purpose. 
  1. Re-imagine your organizational culture. Organizations should take this opportunity to better understand the core elements of what makes their culture work and ensure they can adapt without harming their organizational identity. Learning to work in a hybrid work environment will take time, and it will likely be an iterative process for organizations. It will be worth the effort since it can be a differentiator in terms of attracting and retaining top talent.

The where, what, and how of work are undergoing simultaneous transformations, and this will be a defining leadership challenge and opportunity in the coming years.  With attention and intention, the industry can emerge stronger as a result.

Additional reports in this series will be published though 2021.

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