by Andrés Ramos, Content Marketing Specialist – eVestment Private Markets
Taking the plunge into remote work
Last year a staggering 74% of CFO respondents in EY’s 2020 Global Private Equity Survey cited “employee productivity and engagement” as their top talent management priority. These response and the broader survey, which was released before the COVID-19 crisis became a global pandemic, offer insight into what CFOs hoped to accomplish in 2020. For an industry known for its long hours in the office and extensive business travel, it’s easy to see why the shift to a universal remote work environment was viewed with pessimism by many in the industry.
However, if we fast forward 12 months, now only 30% of respondents to EY’s 2021 survey cited lack of productivity was a major risk of remote work.
From Corner Office to Home Office
For the private markets, moving to remote work in 2020 was an exercise in learning-by-doing. Firm leadership had no choice but to jump in headlong and hope that their teams could maintain their levels of productivity.
Now more than a year into the pandemic and with WFH as the norm, many managing partners would probably say that they have been pleasantly surprised with how the transition has played out. Employees didn’t skip a beat and work continued relatively seamlessly moving from the corner office to the home office. In fact, fundraising managers in private equity and private debt raised more in 2020 than they did in 2019 from public pension plans.
Firm leaders should undoubtedly be pleased with how their teams transitioned, but they should also be wary that these transitions may not have been as smooth as they may have seemed. While productivity has increased, other issues could also be bubbling under the surface unbeknownst to firm leadership.
Caveat emptor employer
Remote work blurs the lines between home life and work life, especially for those who were not prepared for the switch. Employees without dedicated workspaces in their homes may start to feel overwhelmed and burnt out as their small apartments become offices. Others may feel like them don’t have the clear delineation between work and home life that a commute offered and end up working longer hours unhappily.
Research from Professor Richard Taffler of Warwick University and Dr. David Cooper of Cooper Limon suggests over-working can deprive employees of time to reflect and challenge their assumptions. The result is a potentially negative impact on fund performance, “too much ‘busyness’ and skewed work-life balance may impair important decisions by depriving practitioners of thinking time. This could ultimately compromise returns.”
Motivation for work may being to falter for those employees who are not cut out for remote home and struggle to see “the light at the end of the tunnel” in the form of return to office. 21% of respondents to a survey from eVestment and MJ Hudson on work-life balance reported that “enjoying life” was their top motivation for work, something that is difficult to do fully while in the midst of a lockdown.
As we have written about previously, the lack of small talk is one aspect of the private markets that has been sorely missed with the shift to remote work. Informal communication is a crucial part of building a cohesive culture and a motivated team. And this is something CFOs are certainly keeping a close eye on as 74% identified “deterioration of firm culture” as a major risk of a more remote workforce in EY’s 2021 survey.
Firm leadership would do well to ensure that there are proper communication channels in place to understand how their employees are feeling and help ensure that they are able to achieve the balance they need to stay happy, motivated, and productive.