Global fintech leader, Avaloq, puts forth an "Active Active" approach in response to changing market conditions amid challenging times.
Now & Next for Workplace is a podcast series hosted by Colliers International's Occupier Services, Asia, featuring conversations with leading business leaders on the effects of the coronavirus (COVID-19) pandemic on real estate sectors and occupier property markets across the Asia-Pacific (APAC) region.
In this podcast, Rick Thomas, Executive Director of Occupier Services Singapore at Colliers International is interviewed Roland Felber, Head of Facility Management APAC at Avaloq on the impact of COVID-19 on the work process, workforce and workplace in the FinTech sector and how Avaloq is adapting to changes amid this challenging period. Tune in to the Now & Next for Workplace: Episode 2 podcast here.
RT: COVID-19 has had a pretty dramatic effect on the workforce regionally and globally. What has Avaloq’s response been to this, both at a company level and at a real estate level?
RF: All this started five months ago when the first countries in APAC were affected. Our business continuity plan kicked really quickly. I was actually very impressed to see how smoothly all this went since a lot of it was theoretical, but it all worked out very well -- first in Hong Kong and then in Singapore.
To give you an example, in Singapore we have an “Active Active” business continuity strategy, where we have two offices both operational at all times. In case one of the locations closes down, the other one can seamlessly kick in without having another 'war zone', or any disruption, where people can go. We have an activation period of about four or five hours until people can work from there.
This “Active Active” business continuity plan worked very well as we immediately activated it within an afternoon. We had to split the teams in two halves; one of them worked in one office and the other one worked in the other one. This was in the beginning of February. We announced we were going to do this for a couple of weeks and that people will see each other again, but ever since, we have not seen each other again!
Have you been doing this across all your global locations or is it only certain to Asia?
It started here in Asia, while the Europe team was just monitoring the situation. They had just heard about COVID-19 and didn’t know what was going on. They received a request from Singapore asking to ship masks and hand sanitisers as we had ran out of it. At the beginning, they were surprised about these requests and they were trying to find those masks and hand sanitisers. They shipped all those items over to Singapore and to other locations in Asia. Nobody expected that only few weeks later they will be needing all these items themselves.
"Working from home is nice if not everybody does it. Working from home in the past was seen as something that you do in addition to working in the office, or when you were a 'digital native'... All this sounds nice in principle, but we have learned that working from home actually creates much more work."
This is when they tapped onto our experience, it worked out very well for them. They had their COVID-19 task force set up early, got people working from home, got the hand sanitisers and put the social distancing measures in place. Their plan was like ours, however the difference was that they are the headquarter office, with far more people being affected. Their business continuity plan implementation worked out nicely, although they hadn't planned for a pandemic; rather, for natural disasters.
We are going through what is considered as the largest experiment of remote working, what is your view on this?
Working from home is nice if not everybody does it. Working from home in the past was seen as something that you do in addition to working in the office, or when you were a “digital native” (those that travel around the world and work from home, hotel room or wherever they are). All this sounds nice in principle, but we have learned that working from home actually creates much more work and that so many people are struggling trying to juggle between both their private and their professional lives. And all this is very often small spaces.
The number of working hours has also significantly increased -- there are already some studies saying people work two to three hours more [from home] every single day than what they used to when they were in the office. I can confirm that it was the same at our end -- the number of meetings have significantly increased because in order to talk, you have virtual calls or conference calls. People are in conference calls for eight to twelve hours a day and they have never been busier!
"For the last decade, we learned how one extreme works and within a very short period of time, we learned how the other extreme works. We can now work out the best hybrid model that works the best."
It's harder to also reach people. It is at the other extreme than what was happening before and this is not something that is here to stay. For the last decade, we learned how one extreme works and in a very short period of time we learned how the other extreme works; we can now work out the best hybrid model that works the best.
How are you looking at your portfolio in terms of you know managing agile offices? Do you think remote working is going to significantly change the way that Avaloq conducts business and the way it is measured?
We are certainly introducing the idea and working with HR on it. We will have more hot-desking; we will not have offices where every single person has an assigned desk anymore. There will be always a number a part of the workforce for the foreseeable future working from home.
In the past, some employees will be working on site with clients while others are in the office. We also know that there is only maybe 70% of the workforce is in the office; sometimes it's only 50%. The numbers are actually worse right now with only 30-50% of the workforce in the office.
As Avaloq is a fintech company, are you getting lots of dialogue coming back to you from the business regarding change and about what the future will look like?
We have two business divisions at Avaloq -- one that develops the software, and the other one that operates the software for our clients.
The software development team has always been very agile, working across different locations and different continents. This is how we do our software development; we work with development partners and many different other parties. One day you work in this location, the other day you work in a different office and the next day you work at the client's side.
It's very different for those that operate our software -- these people work in the back-office and are not used to working from home at all. For them, it was really a significant change. However, we now know it also works for them.
A very interesting thing is that at the peak of this COVID-19 pandemic - which was sometime during the period from mid-March until mid-April across Asia and Europe - the number of transactions on our platform significantly increased because the financial market was very volatile, but our staff was able to manage it even though they were working from home. All this was possible because Avaloq had significantly invested in our IT infrastructure, both for our people and our clients, in the last few years.
"In order to make agility work properly, it is important to have a good IT infrastructure in place... What really supported this work-from-home situation was our IT infrastructure."
In order to make agility work properly, it is important to have a good IT infrastructure in place. It was thus very smooth for our people to work from home as they had good laptops with good virtual environments, and we have data centres. Our data centres are set setup across different continents, so that reduces latency. A lot of people were already used to have virtual meetings, collaborating across different continents -- not to the extent what we are now, but what really supported this entire work-from-home (WFH) situation was that our IT infrastructure was really in place.
I heard some stories from companies that couldn't even get laptops anymore because they were simply none available in the market. All these PC manufacturers had to pause the production in China and you couldn't get laptops any anymore. There were also companies struggling to give their staff the required IT infrastructure in order for them to make working from home even possible. For us, it was easy.
The biggest problem was that people in Asia don't live alone at home and they share their home with their family and extended family. This was the biggest challenge we had -- and we still do! This is the group of people that will also be prioritised when we return to the workplace. They will likely go back to office not because the infrastructure doesn't work properly, but because they need to be able to focus and have peace in order to be more productive and get some distance.
With those challenges in mind – from IT, to HR and other internal business challenges – how does that relate to your real estate strategies? Is your business analysing leases for opportunities, restructuring or looking at flexible solutions?
The strategy is still being written as we speak as there are many things happening concurrently, and as we take on the learnings we have had over the last few months.
We are re-looking into all our leases; we have a couple of leases coming up for renewal across the globe. When we analyse them, they are already changing in terms of what’s the size we need now – it’s not so much per head count anymore, it’s how many people we assume are going to work in the office. In the past, we assumed almost 70 – 100% of the workforce will work in the office, but now we will reduce it to 30 – 50% of people who will work in the office.
"We are looking for flexibility in all ways, including flexibility in lease terms and flexibility in layout."
Another thing that’s changing is the period of the leases – whether we really want to commit for another five or six years, as the world can significantly change within a short period of time. We are looking for flexibility in all ways, including flexibility in lease terms (shorter lease terms) and flexibility in layout.
What we must also consider now is social distancing. In the past, it was about how many people we can fit in the space while making it compact; making the meeting rooms a bit smaller; making everything dense. Now, you want to create a bit more space with open floor planning and give your employees a bit more space – both desk space and between various desks.
What’s your strategy in returning to the office?
Our current strategy is to work with what we have. We are not reducing desks, but we are not allowing people to sit closely to each other anymore – just this would reduce our capacity by 30 – 50%. We will be able to learn more from the first of our offices reopening in Switzerland and Germany; these offices have put social distancing measures in place.
We also have a tool that allows us to track how many people are in the office – we developed this in-house and rolled it out last week. There will a few new learnings in the coming weeks [from global offices], from which we can then plan on rolling these measures out in Asia.
Last question – what do you see is the biggest impact of COVID-19, both personally and professionally?
Working from home is here to stay, and all companies will have to ensure that they have the infrastructure in place to support this. Not only will employees ask for this, governments will also probably make this a requirement. Processes related to being mobile and flexibility – these were ‘trends’ in the past and now they are here to stay.
One of the biggest impacts we’ve seen from COVID-19 is that people don’t commute much anymore since they are working from home. This will affect the central business district (CBD) – the office buildings and restaurants – and even e-commerce and food delivery. People will be more dispersed and remain so for a long period of time, and I see this as one of the real and biggest changes that will continue.
"We must take this into consideration when planning future spaces... We have to consider how we can foster and enable these social interactions better."
It’s interesting to note how much of “social creatures” people are – even though some people have always wanted to work from home, people are generally missing social interactions. We may have social interactions virtually, but we also need proper face-to-face interactions such as after-work drinks, lunches or even informal chats over coffee. It’s a big learning on how important this aspect is to people, but you only realise it when it’s removed from our lives, which has happened over the last few months.
We must take this into consideration when planning future spaces – people will still be working from home, but for those times they return to the office, we have to consider how we can foster and enable these social interactions better.
Tune in to the Now & Next for Workplace: Episode 2 podcast here. For more insights and recommendations on the effects of COVID-19 on real estate markets across the region, visit our dedicated microsite here.
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