Against the backdrop of COVID-19, and a requirement that everyone work from home if possible, the University of Glasgow and Insolvency Support Services conducted the second part of a two-part survey among a representative sample of the UK insolvency profession in April 2021.
Our second survey focused upon the challenges presented by lockdown to working practices, how firms have responded, the differential impacts of lockdown on different groups of people and what the future might look like for the insolvency profession and ways of working.
Read the full research report, with all the findings and our commentary.
The impact of COVID-19 and lockdown on working hours
Lockdown has had an impact on just over half (55%) of respondents’ working hours, with 39% working more hours and 16% working fewer hours than before lockdown (Figure 1), with a higher proportion of female respondents (48%) working longer hours compared with male respondents (33%).
|Figure 1: Which of the following best describes your working hours since lockdown began in March 2020?|
For those aged between 18 and 44, an increase in working hours is the most popular response (57%), whereas for those aged 45+, it is for working hours to remain unchanged (47%).
For those working longer hours, the primary reason (indicated by 68% of these respondents) is the additional time taken to complete work remotely (Figure 2). Other reasons cited for the increase are difficulties in separating work from personal life (52%); a substitution effect between travel time and work time (48%); an increase in administrative workload (48%); an increase in case load or new work (35%); and increased responsibilities (19%). Just over one quarter (26%) of respondents face an increased workload due to colleagues being furloughed.
|Figure 2: Which of the following explain why you have been working more hours?|
Of those reporting working longer hours, significant differences are cited by female and male respondents. Specifically, 81% of female respondents are taking longer to complete work remotely, compared with 53% of male respondents; 63% of females are facing an increase in administrative work tasks compared with 33% of males; and 69% of females are struggling to separate work and home boundaries, compared with 33% of males.
Of those working fewer hours, the primary reason is a decrease in case load or new work (indicated by 59% of these respondents). Other reasons are a decrease in travel time (41%); increased efficiency due to remote working (29%) and a decrease in administrative tasks (12%). Only 12% of respondents working fewer hours appear to have substituted working hours for childcare, home-schooling or caring responsibilities.
The impact of COVID-19 and lockdown on working practices
Overall employers appear to have responded well. 87% of respondents agree or strongly agree their firm has provided the necessary support, and 77% of respondents are able to undertake their work to the same extent as pre-lockdown, with IT resources and capability supporting home-remote working. Indeed 71% of respondents agree or strongly agree that the pandemic has accelerated their firm’s adoption of digital technology.
A wide range of responses are offered regarding the most challenging aspect of home or remote working. A significant number comment that a key challenge is not having access to printers and scanners or hard copy case files. Reading large amounts of text on screen, reviewing of work and collating multiple documents present real challenges to insolvency professionals. Thus, despite greater use of electronic platforms generally, the insolvency profession still appears to place value on hard copy documentation.
Remote supervision and management of staff is a commonly cited challenge. This includes overseeing colleagues’ workload to ensure fair sharing, managing pastoral and disciplinary matters, supervising junior staff members and motivating staff. Perhaps linked to this response, a significant number of respondents also note difficulties in delivering online training and one junior respondent suggested that not sharing an office with more senior colleagues resulted in work taking longer for them to complete and potentially discouraged the asking of questions. Unsurprisingly, networking and building relations with new clients are cited as key challenges of remote working.
The effects of childcare, home-schooling and caring responsibilities
45% of respondents have additional childcare, home-schooling or caring responsibilities as a consequence of lockdown. A higher proportion of females report additional responsibilities compared with males. In terms of age, a higher proportion (77%) of those aged between 35-44 report additional responsibilities than other age categories.
For those with additional caring responsibilities, the time consumed by these activities is significant (Figure 3). 81% of respondents are spending more than an hour each day, with 23% spending upwards of 4 hours per day. 65% of female respondents who report additional childcare, home-schooling or caring responsibilities are spending more than 2 hour per day, compared with only 28% of males.
|Figure 3: On average how much time per day have additional childcare, home-schooling, and/or caring responsibilities taken up?|
% respondents with additional childcare, home-schooling, and/or caring responsibilities
Coupled with our earlier findings on working hours and practices, the lockdown is clearly having a negative and differential impact on work-life balance for many professionals, and females in particular, whether that is in terms of longer working hours, significant time devoted to childcare and caring responsibilities or a combination of both. We cannot make inferences between our findings on working hours, practices and additional childcare or caring responsibilities and career progression. However, it is interesting to note that one quarter of respondents feel that the pandemic has had a negative impact on their career prospects. More female respondents (27%) report a negative impact than male respondents (18%).
Going back to the office
A significant majority (65%) of respondents say they are looking forward to returning to an office environment, and all these respondents are looking forward to face-to-face interactions with colleagues and clients (Figure 4). Virtual social interaction is no substitute for ‘real’. Consolidating this view, 67% of these respondents are looking forward to ‘general banter’.
|Figure 4: What are you looking forward to about returning to an office environment?|
However, the importance of face-to-face interaction is not purely social. Respondents underline the manner in which ‘solutions’ may be generated from such interaction and the “ability to bounce ideas around”. As one respondent comments: “communication is so much better when it is face to face. In a small office you can hear the problems as they develop rather than find out they have occurred a number of days, weeks or months later.” Several respondents make reference to the ability to reach a quick resolution of an issue through instant or more timely interactions with colleagues in an office environment and the frustrations of not being able to do this in the current remote working environment.
73% of respondents looking forward to a return to the office indicate greater separation of work from personal life as an important factor. A higher proportion (81%) of female respondents selected this option, which ties in with our earlier findings on additional childcare and caring responsibilities. Analysis of our findings by age shows that those under 45 are more likely to select after-work socialising as a reason for returning to the office than their older colleagues.
Interestingly, 1 in 5 respondents (20%) is not looking forward to a return to the office, and 15% do not anticipate returning to the office.
Future working practices
Our survey found a high level of agreement that greater home or remote working (84%) and greater flexibility around working hours (73%) is likely in the future (Figure 5). Office re-design (53%) and a reduction in physical office capacity (48%) are likely, with the majority of respondents (70%) indicating it is unlikely there will be a return to pre-COVID working practices.
|Figure 5: To what extent do you agree with the following statements about likely future working practices within your current organisation?|
In terms of which working practices professionals would like to see retained, the most popular is greater use of virtual meetings (79%), closely followed by increased opportunities to work from home or remotely (71%) and greater flexibility around working hours (68%). 64% of respondents would also like to see less travel time. A higher proportion of women would prefer greater flexibility around working hours to be retained (73% compared with 62% of men).
The market for professional services
Market provision of insolvency services is undergoing a period of structural change, with the separation of insolvency and restructuring service lines from audit, business advisory and tax, and recent merger and acquisition activity.
37% of respondents consider that reduced margins, and 49% that reduced recoveries, will be a significant or very significant threat to the profession in the future. 21% of respondents indicate that lack of finance is considered a significant or very significant threat to the profession, with one respondent commenting that, “there is likely to be a delay in the upturn expected in insolvencies until late 2021/ March 2022 which may be difficult to manage for boutique firms”.
Our survey findings reflect a view among practitioners that the market for professional services is competitive. Ultimately the effects of consolidation and increasing firm size and capacity on competition in the market is an empirical issue, including the effect on insolvency practitioner fees and other direct costs of insolvency processes. Perhaps that should be Survey 3!
Read the full research report, with all the findings and our commentary.
If you have any questions about this research, please contact us.
Our report on the findings of our first research survey on Current Policy Issues and Challenges in Insolvency and Restructuring is also available to download.