What caught my eye this week.
Will we or won’t we? Go back the office that is. Although I say ‘we’ to give the vibe that we’re all in this together. But rather like a backyard reveler in Downing Street during a pandemic, I walk to my own beat.
More than 20 years ago I discovered I could mostly do my job from home, and more efficiently too.
“Sod the office!” quoth I. “And be damned with the commute.”
Perhaps I capped my (traditional) career prospects, but I never looked back in terms of quality of life. Working from home was like playing the game on easy mode. More time, fewer distractions, chores done incidentally during screen breaks, and always in for deliveries.
Most of you also now know that drill now.
Indeed, one good thing about lockdowns – bar the parties, natch – has been the world discovering how practical it is for more people to live this way.
Well, I say ‘good thing’ to again hit an inclusive note – but for me it’s been a step backwards.
More people in Waitrose at lunchtime. Everyone wanting to Zoom instead of just leaving you to get on with it. Double-digit house price growth in my fantasy rural retreats. The world has changed.
For many workers all this freedom is a revelation.
Bloomberg reports this week that 55% say they will quit if forced to return to the office.
No wonder we’ve all asked how long it will last.
Life’s too short
US cheapo broker Robinhood is just the latest firm to offer most of its staff permanent work from home, saying:
Our teams have done amazing work and built a strong workplace community during these uncertain and challenging times, and we’re excited to continue to offer them the flexibility they’ve asked for by staying primarily remote.
Facebook and Twitter are two other big tech firms that have pledged to enable staff to keep working from home.
But Google has just taken a step in the other direction. While stressing it was forging a hybrid model rather than enforcing office labour, it nevertheless just plunked down $1 billion in additional commitments to its UK offices.
Reuters reports that:
Google plans to refit the building so it is adapted for in-person teamwork and has meeting rooms for hybrid working, as well as creating more space for individuals.
The new refurbishment will also feature outdoor covered working spaces to enable work in the fresh air.
Google says it will eventually have the capacity for 10,000 workers at its UK sites, including the one being developed in London’s King’s Cross.
Rishi Sunak, UK chancellor, even put his name to a quote that celebrated the move as a commitment to the UK tech sector.
On that political note though, I did wonder as I watched Google executives do the interview rounds whether this was in part a PR move?
The company was rolling out huge office buildings around King’s Cross before the pandemic. It was already pretty all-in.
Why not give the UK government something to cheer about ahead of the next furore over corporate taxes or some dodgy militants on YouTube?
Extras
A $1 billion is a lot to spend on PR though. Clearly Google is serious about its 6,400 UK workers having at least a foot in office life.
However this vision couldn’t stop Google postponing its global return to work plans last month, as the Omicron wave hit.
Many others have done the same. And of course in December it became official UK government guidance again to work from home if you could.
Those who believe the traditional office’s days are numbered think these delays have put the final coffin in things returning to how they were.
Nicholas Bloom, professor of economics at Stanford University, told the BBC that any hard return-to-office dates are dead:
“Endless waves of Covid have led most CEOs to give up, and instead set up contingent policies: if, when and how to return to the office.”
Bloom believes that at the least the future will be hybrid now.
I see pros and cons. For example I chose to go into a client’s office a couple of times a week for a few years, which also gave me a bit of social contact. But it also meant I couldn’t exactly leave London for the Orkney Islands.
Hybrid working takes wholesale geographic reckoning off the table.
Perhaps that’s why the populations of UK cities have held up better than some predicted during the so-called ‘dash for space’.
After Life
A scattered workforce can make the office seem a bit of a nostalgic throwback, like wearing bowler hats to work.
As one worker told the BBC:
“I won’t come in regularly until there is a critical mass of people here.
There’s no point in leaving the house if I end up doing video calls anyway.”
The bottom line is I still don’t think we know what will happen next.
This week veteran commentator Barry Ritholz pointed out what a weird recovery we’re seeing across the spectrum.
No wonder those April 2020 thoughts of two weeks at home and we’re done seem so quaint these days.
Hubble is maintaining a long list of big or famous companies’ back-to-office strategies. What’s your favourite firm doing?
Wherever you are, have a great weekend. The evening’s are getting lighter!
From Monevator
An introduction to PrimaryBid – Monevator
FIRE update: the onset of winter – Monevator
From the archive-ator: Don’t make a crisis out of a crisis – Monevator
News
Note: Some links are Google search results – in PC/desktop view you can click to read the piece without being a paid subscriber. Try privacy/incognito mode to avoid cookies. Consider subscribing if you read them a lot!1
Redo your SWRs! The ONS has raised life expectancy… – ONS
…but that’s as projected for newborns. For already-oldies it’s down, raising a question mark about plans to raise the State Pension [Search result] – FT
£150,000 for starting salaries as firms fight for staff – BBC
Tax hikes and inflation to deliver real terms £1,600 pay cut to average UK worker on £30,000 – Yahoo Finance
Centrica boss says high energy bills could last two years – Guardian
The UK economy was back above pre-Covid levels in November – BBC
Vanguard fires fresh salvo in asset management fee war [Search result] – FT
Products and services
A month on from the base rate rise, have savings rates improved? – Which
Open a SIPP with Interactive Investor and pay no SIPP fee for six months. Terms apply – Interactive Investor
Monzo has relaunched its famous ‘Give £5, get £5’ referral scheme – ES
Homes for new year’s resolutions, in pictures – Guardian
Comment and opinion
Should passive investors be happy buying equities at 100x earnings? – Behavioural Investment
All about inflation – Mr Money Mustache
Is your bond fund really an equity fund in disguise? – Morningstar
Name that bias – Humble Dollar
Are we bullish enough? – Of Dollars and Data
After years of abstraction, things get real for markets [Search result] – FT
Reddit ‘antiwork’ forum booms as Americans quit jobs [Search result] – FT
Buying a multi-million pound second home on margin – Fire v London
Projection – Indeedably
Getting rich with asymmetric money moves – Banker on FIRE
Fama and French: the five-factor model revisited… – CFA Institute
…and the theories of finance academics graded – Morningstar
Future self mini-special
Spending decisions that end up costing millions of dollars – TEBI
Is delayed gratification the most important thing to develop? – Random Roger
Aging in place – Humble Dollar
Crypt o’ crypto
UK crypto winners cannot dodge the tax authorities [Search result] – FT
“I bought my first NFT” – bps and pieces
Signal founder’s Web3 takedown… – Moxie Marlinspike
…and Ethereum creator’s response – via Reddit
Naughty corner: Active antics
The periodic table of commodity returns – Visual Capitalist
Terry Smith’s annual letter [PDF] – Fundsmith
Inflation is peaking – Joachim Klement and Josh Brown
Goldman Sachs takes down the CAPE ratio. Again – TKer
Cullen Roche: macro economics and you [Podcast] – Morningstar
Living through a crash – The Big Picture
The renaissance man of venture capital – Institutional Investor
Warren Buffett’s favourite investor Lou Simpson has died – Rational Walk
Covid corner
Australia: as clubbers used to say, “Wait for it…” – Worldometer
Omicron optimist, pessimist, or fatalist: which are you? [Search result] – FT
Record number of under-fives being hospitalized with Covid – LondonWorld
After Omicron, Covid will be more like seasonal flu, says Bill Gates – CNBC
The puzzle of North America’s record high hospitalization rate – BBC
“My bile rises as I am asked to move my dying patient out of ICU to make room for an unvaccinated man with Covid” – Guardian
Kindle book bargains
Scrum: The Art of Doing Twice the Work in Half the Time by Jeff Sutherland – £0.99 on Kindle
Mastering the Market Cycle by Howard Marks – £0.99 on Kindle
The 5AM Club: Own Your Morning by Robin Sharma – £0.99 on Kindle
Grit: The Power of Passion and Perseverance by Angela Duckworth – £0.99 on Kindle
Environmental factors
Shell converts London petrol station into electric car hub – ThisIsMoney
Climate change is unbalancing the insect world – Guardian
The Waste Age – Aeon
End times UK edition mini-special
The City of London vs the EU: a slow puncture [Search result] – FT
How Britain falls apart – The Atlantic
Marina Hyde: who’s really leading Britain? – Guardian
Off our beat
Solving the word game Wordle – The Ringer
Unfolding and deploying the James Webb space telescope – SyFy
One man’s love affair with his finally-defunct Blackberry – BBC
Moving mom to ‘memory care’ – Get Rich Slowly
Looted Amazon boxes stretch to the horizon [US, video] – via Twitter
What a world! – Morgan Housel
And finally…
“The shortest route to top quartile performance is to be in the bottom quartile of expenses.”
– Jack Bogle, via The Bogleheads’ Guide to Investing
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I go to the office everyday at the moment. I have the whole place to myself usually. It’s wonderful.
When the obedient masses are forced to come back, I’ll WFH mostly instead.
As someone who has worked from home 3 days+ a week for over a decade, nothing much will change. I’m aiming to go into Mayfair a maximum of 1 -2 days a week. Some weeks it will be zero.
What has radically changed is how many colleagues are permanently moving to the same approach. I was an outlier in 2019; I’m the consensus in 2022. Our office relocation has been suspended.
In terms of people moving out of London, I see a clear bifurcation. Those in their twenties are staying put, understandably seeing it as mad to give up the London nightlife. Those with families (typically in their 40s) are moving to the commuter belt or to (southern) Europe. No one has considered any other part of the UK.
It’s notable that Brexit alone wouldn’t have driven people in my company to Europe. Brexit plus COVID driven work practice changes, however, has made it very attractive to leave the UK for warmer (and to be honest, lower tax) climes.
Beyond hybrid working some firms are reconsidering the working week full stop.
Last Summer PwC staff had something called ‘The Deal’ where staff were allowed to finish at 12 o’clock on Friday. This year there is talk that staff call choose to work two bank holidays and take those days off another time.
Given the ever diverse population why should we all be tied to a working week that evolved in Edwardian Britain?
Thanks for reminding me to read Mr Money Moustache again – always worthwhile and inspiring.
Definitely keen on a hybrid approach. 3 days in central London office, 2 at home I think will be what happens once we start easing back in next week. I suspect Google has it right.
Although my workplace and colleagues are fairly behind the times and traditional in many ways (very much 9-5 careerists, whereas I would consider flexible working to be standard), the benefits of being able to work from home outweigh the negatives, for sure, for many of the reasons mentioned, but also linked to my personality type. As an introvert, I much prefer having my own space and control of surrounding to focus on a single hand in task. My desk in the office is near the kitchen – it’s lovely to speak with colleagues when they come and make a tea, but quite frustrating when you are genuinely trying to work and quietly get on with things.
However, I notice I am far more lethargic when WFH, which has a knock-on negative effect for mental and physical health for sure.
I (mostly) enjoy seeing colleagues in person (for the social side, more than anything), and need the motivation to get up and out some days, plus the increase in activity on office days walking to and from the station or nipping out at lunch, for example – very easy to slip into bad habits, I find.
I don’t especially enjoy the tube, busy places or presentism, mind!
Living in south London in my mid/late 30s (gulp), my partner and I are starting to prepare for moving further out (and adding to our numbers). Vague plan has been to see how things settle down post-pandemic before deciding a location. I would like to be slightly further out (cheaper, more space), in a town with services, choices and green space within walking distance, but still within easy reach of London, if only for the social aspect. I definitely don’t want to get up at stupid o’clock to drive to a station to get a 90-minute train twice a day for five days a week. Those days have long gone.
Pre-FIRE, I enjoyed a mixture of WfH and going in to the office. Swings and roundabouts: less commuting but also less opportunity to ‘take the pulse’ of the team.
Over the mid-term I’m not sure we can write off office-based working. It’s fine for well established employees in moderately autonomous roles; but not so good for new starters needing to absorb the culture. Equally when there’s a performance or disciplinary process to be followed, in-person supervision is arguably a significant advantage.
Of course there are workarounds; but what I’m saying is that for many companies the environment of “the office” whilst not ideal is a tried and trusted approach that they will eventually revert to.
The trouble with hybrid vs WFH almost 100% is that you are still tied to your main office location. Even if it makes longer commutes more bearable (only doing them 2 or 3 times rather than 5 times per week) and opens up a wider radius of living locations than, say, the M25 circle, you are still tied to the south east for London based workers.
Agree with mjcross, our new hires really do need to spend some time in the office learning and meeting a cross section of other staff.
As for me, I’m done with any form of commuting even if it has a detrimental effect on the rest of my career. And it will limit my earnings to a degree.
10 years ago I would have stayed nearer to London in order to job hop or seek out more lucrative contracts, but not now.
Enough people seem to have relocated to the south west to have a huge effect on property prices as the race for space and lifestyle has played out.
Semi-retirees, downshifters and WFHers have joined the traditional retirement and holiday home crowd to almost form a completely different market.
While you can still get to London on a mainline train it is enough of a pain that a handful of times a year is enough.
Anyway, the genie is out of the bottle on this WFH thing as people reassess their work/life balance.
As for working from sunnier parts of europe, there is a red line for a lot of employers that UK based staff should still live in the UK even if they rarely go into the office. So Portugal ruled out for now (it’s a shame, go and look what you can buy out there for £200k on youtube!)
I’ve been to Google offices in London, they definitely over-egged it on making sure their employees lives revolve around the office, with snacks and drinks on tap, massage parlour credits, in office running tracks, fully catered breakfast/lunch/dinner etc
Definitely see why WFH is an anathema to them, because it usually means less time spent at work and more time spent on trivialities like “family life”.
I’ve made a life transition during the pandemic, moved out of London and managed to buy my own house in the city I grew up in. London is 120 or so miles away now and I don’t miss it at all.
However there are some downsides, I’ve definitely gained weight due to my own laziness, it’s very easy to just spend the week working/relaxing/sleeping without ever needing to leave the house. My groceries get delivered so I rarely ever need to pop to the shops, I buy everything online.
Definitely a priveleged position to be in for sure, and somewhat depressing that in my previous London life the daily exercise was topped up through the drudgery of the commute taking up 2 hours a day with bouts of walking between tube journeys. But at least it got me out a bit…
This reminds me must do that tax thing to claim back working from home. 🙂
Been WFH since Covid. And proved to be antiwork boon. Like actually working 5 min a day and reading FIRe blogs rest of the time. Was even thinking taking part time job at another company while keeping current full time job .
I thought the web3 takedown was going to be https://web3isgoinggreat.com/
I’ve worked from home for nearly a decade with regular super-commutes into the office. I can’t see myself going back to the regularity of those commutes, especially since I’ve now got a mild disability which now makes the required early starts/functioning on irregular sleep a near impossibility – I’d rather be made redundant/retire.
It is slightly ironic that our otherwise digitally savvy younger colleagues have struggled most with the transition to a digital workplace and want back in the office (and their managers etc to join them!) I understand some of the reasons why ie more likely to have a home set up that is less optimised for home working, rely on workplace for social interaction etc.
As ever a very interesting set of links, with much to think about…..
I’m not sure on the WFH trend to be honest. I can imagine it will remain in place for many companies albeit given the balance of capital is in the hands of companies and not employees then I’m sceptical this will be to the long term benefit of workers. Think reduced salaries (one senior HR executive at a multinational PLC has admitted to me they are implementing that for new hires where possible) and increased offshoring (why employ someone from an expensive location if it can be done cheaper? Doesn’t anyone think this may accelerate the levelling up of wages globally not to the benefit of the people in the UK? Obviously that’s not a universal view or indeed a definite outcome. FWIW most firms in the city I’ve come across seem to want their front office staff back in a minimum four days a week. I’ve also come across a number of friends and acquaintances who’ve pulled the plug and moved far out – feels a risky game to me. But who knows…..
I thought the money mustache interview was as ever overly simplistic. As this blog has correctly said, equities are not a good inflation hedge albeit over the long term they are generally the best asset class to be in to beat inflation and generate a real return. But a casual look through history – think late 60’s to early 80’s will show a decade long period of underperformance. Not that I have a central view that inflation is going to be significant going forward – I have no real idea, neither does anyone else.
The Brexit article on the city struck a chord. There’s plenty of financial services companies in London who have been gradually increasing their presence in the EU including where I work. Think an MD who is earning say £500k then leaves – the bank then recruits a new hire in Germany, France, Spain. That’s a lot of lost tax. A slow puncture is quite good way to look at it. I still think London will remain the preeminent city for financial services but on a lesser scale. Good job we’ve lots of other world leading industries…:) FWIW, I’m no strong remainer – I think there’s some sound arguments to be out of the EU – just not economic ones.
Obviously there’s been a lot of angst at the generally f*ckuppery in government over the last couple of weeks. I’m a great believer in the quote from Joseph de Maistre, who said ‘every nation gets the govt it deserves’. This country is no different having no idea as a nation where it’s headed, being far too introspective, beating itself up on its history and casually ignoring the fact that other countries south of here are eroding what little competitive advantages we have left as fast as they can. If you want to change things a little, the easiest way to have an impact is to join the conservative party. It’s £25 a year and you get to vote on who is the next conservative leader. At the moment there’s about 180k members, average age somewhere between 58 – 72 most of whom are seriously right wing hence why we are where we are. You might think Jeremy Hunt is a compete …… (think of a rhyme), as I did when he wittered on about sending our aircraft carrier into chinese waters in 2019 (he was just pandering to those 180k conservative members) but I suspect he’d have a better idea how to run a govt than the current incumbent. Join the labour party too – it’s only a fiver. You’ve much more influence than at an election when a lot of people’s votes are quite frankly irrelevant. You don’t have to like them…:)
The Atlantic article is bang on. Tony Blair was absolutely wrong to devolve power to individual country parliaments as it has weakened the union and Cameron was entirely cavalier with holding a Scottish referendum. Scotland leaving the UK would be catastrophic for England geo-politically and deeply negative to Scotland and Wales. The person who has most to benefit after Nicola Sturgeon is Vladamir Putin given we’d have no where to base our nuclear deterrent, England would have to spend large sums defending a new land border, it would be harder to prevent air incursions and economically it would be a net negative for everyone mostly Scotland. Leaving the EU would be a cakewalk compared to Scotland leaving the UK. Just NO.
I’ve no real idea what will happen to equity markets, but I think it’s hard to be too underweight the US. Looking at the link last week – US / China is 42% of GDP. Given China is tough to invest in for obvious reasons – if you don’t invest in the US, you really are missing out on where much of the economic action is.
Really liked the Fire v London article but I agree with the Investor – borrowing on margin feels risky as they can change the requirements regularly. I took out a 5 year interest only fix at 0.94% recently as an inflation hedge and invested the proceeds. A lot more hassle than a margin loan but more certain.
I’ve already mentioned this but I think the 5 day a week model is dead and buried except for retail and other service workers. My employer resisted for a long time but to their credit finally saw the writing on the wall and offered a choice of 3+, 2, or 0 days a week for all employees. About 40% chose fully remote, 30% and 30% for the others. I expect to have at least some remote team members at work for the rest of my career.
It will be interesting to see how compensation adjustment shakes out across industries. In the past it wasn’t uncommon for someone to take a silicon valley salary, move to the mid-west, and keep that 250k+ income in a market with half the cost of living. Suspect that will not last as remote becomes normalized.
@SF (#13):
Re: “You might think …”
try: https://www.youtube.com/watch?v=-JpNravrwZc
Worth listening all the way to the end – “reckless in the extreme” indeed!
Of course, for those of us that don’t work in offices, the above debate feels largely abstract. With the exception of one week in April 2020 to lay out a one way system, our factory has remained completely open during the pandemic. I won’t be working from home for the foreseeable future!
I like the nod to Ricky Gervais this week. Looking forward to binging on his new series this week.
@SeekingFire “every nation gets the govt is deserves”.
Completely agree. At the last GE, the Great British Public somehow came to the decision that out of a population of 67 million, Corbyn and BoJo were the best leaders we could come up with. A fantastic example of British exceptionalism! Exceptionally stupid.
Your idea to join the Tories for £25 simply to get a vote makes huge sense. Tory activists are far to the right of the members and even further to the right of Tory voters. When I hear activists actually want some one like Steve Baker, an evangelical nutjob, as PM, I need to take action. Honestly, BoJo might be the least worse option. At least he just has narcissistic personality disorder.
Hadn’t known of Wordle until I was told about it today. Solved today’s in 4, with a starting word far more logical than any of those mentioned here above. My starting word, err on second thoughts I’ll keep that to myself :).
@Matt – same here (we didn’t even close for one week). Shifts went into bubbles, no-one was furloughed. Our 2020 and 2021 orders were way higher than 2019 so we had a “good” pandemic.
Not a lot of manufacturers looking to FIRE perhaps?
@Matt and @Portly Gent
Perhaps Douglas Adams was on to something with the Golgafrinchan argument…. https://hitchhikers.fandom.com/wiki/Golgafrinchans
Although the outcome will not be quite as draconian perhaps 🙂
Nerding (over and) out.
JimJim
@JimJim, thank you.
That made me smile and recall my early teenage years watching the television series and then discussing it in depth at school the next day, happy days 🙂
Looking at it again today, K think he was on to something!
On SeekingFire and Learners points on effect on salaries of geo-relocation.
As far as the IT industry goes wages are on the rise in India (staff turnover high as firms compete for staff) and other offshore locations at a higher rate than the UK.
The cost savings have drastically reduced from 5 years ago, and when you factor in needing two or 3 people to achieve the same productivity as one in the UK (who still ends up helping the 2 or 3 offshore to do their job) due to a number of factors, any genuinely informed management realise than they cannot offshore everything, save money and get the same results.
That said, of course you should never get too complacent depending on what your exact role and skillset is. Use any worries as FIRE motivation 😉
As to impact on UK salaries, yes I can see some salaries dropping, or more accurately, regionally converging/equalising over the next few years.
That is perhaps outside of things like Front Office IT support in investment banks and trading firms where you are more likely to be required physically in the office, in fact some of these roles seem to be paying even higher to entice people in rather than WFH in a different sub sector.
How much salaries change is tricky to predict though, because there will always be a premium paid for rare, niche or in demand skills regardless of where the worker is located.
It will help level up the whole country if we move away from the whole London/South East centric thing, so it isn’t bad necessarily.
Back to my earlier comment, if people relocate to the south west, or up north, to Wales, wherever, to WFH they are going to re-invigorate the local economies and communities if they are paying taxes, living and spending in the region.
More so than holiday home owners who create ghost villages, or an over abundance of retired people.
@JimJim – good point, makes me happy for all the hand sanitiser we still have knocking around the factory.
@Learner, as a no-java fan it made me chuckle that https://web3isgoinggreat.com/ is also available in web 1.0!
Diesel Tesla anyone?
I’m quite happy with my one day a week in the office, not that I really minded the 5 days previously but am liking the cost savings.
Also, our family Whatsapp group is now home to a Wordle competition – something fun to look forward to every day!