It is no secret that remote work has changed the finance industry. However, while some people believe that these changes are temporary, experts recognize that some of them are permanent. Yes, the economic impact of the current crisis will change the industry. However, the lasting changes will come from human behaviors. Those changes to behaviors are how remote work is changing the finance industry.
For those who feel that the finance industry will return to normal, consider other major changes in the past. A classic example is the “temporary” changes made by the airlines after 9/11. We are still following all of those “temporary” security measures two decades later.
This will likely be the case for working from home as well. The new behaviors that those in finance have developed will stay, and people will want jobs that acknowledge them.
A Different Incentive Structure
One of the major changes will likely be to the incentive structure. With the traditional structure, employees are not always motivated by the results of their work. They are paid to be there, not always for results.
The change is to one where team members have more ownership over their work. A simple example of this would be a way of paying equity researchers. Traditionally, they would receive a flat salary and potentially a bonus. The change could be being paid based on their performance.
More people have realized that many finance jobs can be done from anywhere, thanks to the necessity of remote work. That has led to a demand for remote positions. The result is that there is an increase in the talent pool. More people will be competing for the same jobs, as it is now possible for them to work remotely.
Do not be fooled into thinking that the rise of competition from remote work happened solely because of the pandemic. Experts have been hinting at a shift to remote work in finance for years. As of 2018, a survey found that 43 percent of CPA firms had at least some employees who worked from home regularly. That survey also found that 41 percent of firms hired someone who worked in a different region.
What does that increase in competition mean for those in search of finance jobs? You have to go the extra mile to make yourself stand out. For example, those who gain extra skills via online courses will have an advantage.
Finance Is Becoming Decentralized
According to Forbes, the recent shift to remote work has also led to more decentralization in the world of finance. This isn’t full decentralization, as companies will still have headquarters. However, the employees and their ownership over their work has become more decentralized and will continue to do so. This goes back to the previous point about compensation and incentives.It also involves an increased level of autonomy along with that work ownership. The days of finance managers and head accountants micromanaging their subordinates in the industry are on the way out. For that to function with remote work, it would require monitoring apps and requiring employees to work with cameras pointed at their faces. Employees are unlikely to accept those measures.