Mind the gap – between who gets to work and who doesn’t. Effect on FX industry as tube staff take 163,000 days off in a year
Commuting on London Underground was hindered by the largest staff absenteeism for many years. We look at how London’s institutional and retail sector is now self-reliant and the unions that once held London to ransom today have little effect. An inside view by FinanceFeeds
In the institutional FX and interbank electronic trading epicenter of Central London, just 0.009% of Europe’s manpower generate 16.2% of all tax receipts for the European Union.
This should be a significant enough figure to demonstrate the absolute towering magnitude of the fiscal prowess of the Square Mile, and indeed when Britain completes its disengagement from the European Union, what a massive domestic producer the financial sector in London really is and how its productivity is disproportionate to any industry in the UK, and in the whole of indebted mainland Europe with its non-producing siesta countries and legacy industries of the north.
Long hours and dedicated commitment are instrumental characteristics of our rapidly developing and highly sophisticated business infrastructure, many City executives beginning their working day at 7.30am in London’s financial district, having already completed their commute by train, bus, motorcycle or bicycle, leaving the office often 12 to 13 hours later.
Note how ‘car’ was omitted from this list of means of arriving at the office. That is because London is a city in which driving to work for many people is an absolutely non-viable option because not only is there nowhere to park whatsoever, but the traffic jams and central London city toll of £8 per day would render this prohibitive.
Thus, many are reliant on the British public transport system. A system upon which this article is being composed today between Reading and London Paddington.
A truly great system it is, too. Indirectly, this public transport system, with its wifi and air conditioned carriages, is enabling the efficiency of London’s financial powerhouse, transporting its executives as well as their commercial customers.
That is, when its employees turn up for work.
Transport for London, which operates the London Underground system, is an organization among whose staff lead-swinging is not completely unheard of, and last year, the attendance record set a new level in empty-chair syndrome.
Transport for London, like many government-funded organizations, is obliged to report absenteeism from work of its employees and the cost associated with this, and has now stated that in 2015, 163,000 sick days were taken by its employees, which is the highest level in five years and more than twice the national average.
Industrial action reared its head, too, with unions (largely the left-wing Transport and General Workers Union) routinely having explained that they would invoke strike action involving workers on the Night Tube (which stops at 12.00AM on most lines.)
The per employee absenteeism figures for London Underground staff works out at around 9.2 days a year. This compares with an average number of sick days for London workers of 3.5 days annually. UK-wide, the average is 4.5 sick days a year and it is quite clear that the institutional and retail electronic trading sector, and its associated technology and liquidity businesses, has one of the lowest absentee records in the British workplace.
People in our industry, within top quality firms, are committed to their work, and in London are astute professionals with vast experience who are cornerstones of the entire industry worldwide.
By causing public transport cancellations and the inability to arrive at the office, an effect on business can be vast.
Yesterday, Conservative transport spokesman for the Greater London Authority, Keith Prince, spoke out on the impracticalities caused to business in London due to such absenteeism.
“London commuters suffer delayed and cancelled services due to understaffing on a daily basis and it is an important issue that must be addressed” he said.
The question is, that in today’s fully hosted, ultra low latency trading environments, where institutional liquidity can be provided to and from all corners of the globe from pretty much anywhere, can the functionality of our business continue even if there are transport outages and our executives can work from home?
Electric dinosaur, or essential conveyance?
During the reign of Queen Victoria, the London Underground electric subway train system was a marvel of the industrial revolution. It was the autonomous car of its day, or the Tesla of the post-Jane Austen period.
Today, however, communications are conducted via fiber optics and the post-1970s trade unionism that has stunted the efficiency and created doubt about the timeliness of such transport has eclipsed its Brunel-era genius.
Apart from relationships – which are critical in this business – between institutional FX firms and their liquidity providing Tier 1 banks (all of which are in London, just a few minutes away in Canary Wharf), as well as between brokers and their institutional partners, much of which are conducted in the Square Mile, the majority of business today can be continued uninterrupted.
FinanceFeeds spoke to Raj Sitlani, Managing Partner at Prime brokerage ISPrime which was established by ISAM, Lord Stanley Fink’s hedge fund, to gain perspective. Mr. Sitlani, who operates from ISPrime’s 55 Baker Street office, considers that transport outages are not such a burden on today’s business.
The ever svelte Mr. Sitlani explained calmly “I would say that it really depends on the role that the staff in question are performing. However in this day and age with the technology we have at our disposal, working from home should allow for seamless work.”
Whereas perhaps 20 years ago, executives may have experienced stress and dismay at not being able to conduct their business, today, it is not so critical and most are unfazed by it.
Tony Cross, Director, Monk Communications Ltd, an expert on the retail derivatives industry this morning explained to FinanceFeeds “Some activities can only be undertaken on the premises owing to regulation, so not everyone can work from home.
“Other than that, there is the factor of the rising cost of rent which pushing more back office work to places like Birmingham” continued Mr. Cross.
“Today, City workers do adapt. I avoid the tube if at all possible between 8 and 9 in the morning. With regard to the sick days that are being taken by London Underground staff, it is worth considering the break down of those sick days. We still have very labor centric industrial practices, so you probably have tens of people who have been on long term sick leave for decades, owing to alleged industrial accidents” said Mr. Cross.
“I believe they actively manage the trains to account for it. So if the train runs every 3 minutes and one worker is sick, they run a series at a 4 minute intervals rather than leave a 6 minute gap. On balance your point is right” concluded Mr. Cross.
A senior executive within the institutional FX division of a very large derivatives trading firm in London today explained to FinanceFeeds “Despite very stringent compliance rules, we all have remote access so we can technically work from home, but in my opinion it is always better to be on the desk for smoother flow of information, the ability to speak to colleagues in legal, risk and back office in order to ensure things are done rather than via emails or phone calls.
Staff sickness figures at Transport for London’s subsidiary London Underground for the first four months of 2016 were a remarkable 57,610 days.
If this level of absence through illness continues throughout 2016, this year will end up with an even higher rate of absenteeism than 2015.
Considering the size of London Underground as an entity, with its 18,300 operational staff and a full-time equivalent of around 17,700 employees made up of train drivers, engineers, traffic coordinators, customer service assistants, and project managers, the technological and global working environment of the City is overtaking the trade unionist legacy of the traditional transport system/
The sickness rate has been rising for several years. In 2014, London Underground employees took over 152,000 days off sick compared to almost 145,000 a year earlier.
Liverpool’s dock yard was killed off by similar circumstances, which resulted in its marine insurance giants, merchant navy centers and huge import/export centers moving to London, and whole streets becoming available for sale for just £1 as widespread dereliction set in. The unions and the sicknote-carriers signed their own fate eventually.
In London, this will not happen as back in Liverpool’s nadir, there was no modern method of working. Today there is. London’s prosperity will remain as constant as its technological prowess as remote access and a global infrastructure takes precedence over the red brick tunnels 50 feet below street level.