Earlier in 2022, J.P. Morgan and Goldman Sachs gained public notoriety — and the ire of some employees — when internal emails leaked on their back-to-office plans. Employees from both companies came forward, detailing plans to track employee movement in and out of the office after ordering workers back on-site.
The move wasn’t all that surprising. Historically, financial services has been less likely to embrace flexible work than other industries. Pre-pandemic research from PwC shows that 29% of financial services companies had at least 60% of employees working remotely, while for other industries the average was 36%.
Beyond privacy concerns, the news of a mandated return to the office has raised questions about why exactly it was so pressing for employees to be back on-site almost full time. Sunaina Lobo, CHRO of fintech company Marqeta said the challenge of enacting change in financial services is due in part to the, “deeply rooted infrastructure and processes that have enabled them to employ thousands of people.
“This infrastructure can affect a company’s ability to take a flexible approach to policy rollouts or the workplace experience, as it’s more difficult to align across the entire company,” she added.
Change may not be easy, but it is possible. Getting flexible work right in this sector depends on implementing the right processes, feedback loops, and training.
Flexible Work is Key to Talent Retention — Here’s Why
While compliance barriers, procedural challenges, and the lack of agility that comes with being a large organization continue to present issues, for the old school world of financial services firms, cultural hesitancy from leadership is the sticking point in the transition to flexible working.
We know that work can be done remotely, because we’ve been doing so for the last few years, said Anu Mandapati, Global Head of Diversity, Equity, and Inclusion at augmented reality company Magic Leap, and executive coach for financial services leaders. “That’s not the issue [in financial services],” she added. “The issue is a cultural one, and one that’s often based on the idea that we have to do it this way because it’s the way it’s always been done.”
Yet post-pandemic, the workforce isn’t going to so readily accept the return-to-office mandate. A 2021 Flexjobs survey of more than 2,000 workers found almost two-thirds of people would “absolutely” seek new employment if they weren’t able to continue working remotely in their current role.
The financial services industry faces a formidable challenge with fintech here. The fintech industry, with its more progressive cultures and flexible workplace policies, is becoming more attractive to traditional finance employees who are not willing to give up their flexibility.
Fintech company Marqeta implemented a flexible-first workplace policy that empowers employees to work from where is best for them. The policy has been a huge draw for candidates. According to a recent candidate survey, Marqeta found that flexible work is one of the top three reasons why an employee chooses to work with them, with 48% of respondents saying that flexible work and the ability to work remotely was what attracted them most to Marqeta.
Moving forward, flexible work arrangements will be key to employee retention in traditional financial services firms.
“As large financial services corporations mandate workers to return to the office, their task of finding talent becomes limited to candidates who can fully encompass the type of company they have decided to be,” said Evan Sohn, CEO of Recruiter.com. “And they must realize that their decision may come alongside with some resignations or discouraged candidates right off the bat.”
Key Benefits of Flexible Work
One common complaint lodged against remote work is that employees won’t be engaged and productive without an abundance of face time with managers. But Lattice’s 2023 State of People Strategy survey suggests this isn’t something to be so concerned about: Two-thirds of HR leaders believe employees and managers are getting all the face time they need.
Other survey findings and anecdotal information indicate positive benefits, too:
Attract and retain diverse candidates and employees.
While the majority of the workforce favors flexible working arrangements, traditionally underrepresented groups have an even stronger preference for hybrid. A 2022 McKinsey research report found that:
- Employees with disabilities were 11% more likely to prefer a hybrid work model than employees without disabilities.
- More than 70% of men and women expressed strong preferences for hybrid work, but nonbinary employees were 14% more likely to prefer it.
- LGBTQ+ employees were 13% more likely to prefer hybrid work than their heterosexual peers.
The research also showed that Black employees are 14% more likely to leave if hybrid work wasn’t available, with women 10% more likely to quit than men. LGBTQ+ employees are 24% more likely to leave than heterosexual peers. The numbers are clear: if you want to measurably support your DEIB strategy, boosting flexible workplace policy offerings is a must.
Improve employee engagement.
A 2022 study from Gallup showed that employees are more engaged when working in a hybrid or fully remote capacity. Conversely, employees who could technically work remotely but worked on-site full time had the lowest levels of engagement.
At fintech company Fideseo, where Dana Lawrence is the Chief Compliance Officer, they see flexible work as a core contributor to employee engagement: “When we view and treat our employees as full people inside and outside of work, and give them the flexibility they need to balance both, that really helps boost employee engagement.”
Boost employee productivity.
Despite the pandemic work from home trope of employees slacking off whilst lounging in their pajamas all day, employees report high levels of productivity when enabled to work flexibly. Eighty percent of respondents to Microsoft's work trend annual index report Great Expectations: Making Hybrid Work Work report being just as or more productive since adopting a hybrid model.
Much of the skepticism about remote work and employee productivity is really a conflation of presenteeism and productivity, according to a March 2022 Gallup article. “If I see you at a desk and you look busy, you're being productive. If I can't see you, and I can't see if you're busy, you're not being productive,” wrote the authors.
Productivity is linked to high levels of employee engagement, which is shaped by the strength of relationship and communication between employees and managers. Rather than viewing an employee’s physical presence in the office as essential, consider putting resources into initiatives to enhance managerial skills in the remote world.
4 Strategies For Embracing Flexible Work in Financial Services
1. Survey employees.
“Surveys can truly help companies determine what’s the right flexible workplace model for them,” said Lobo. People teams should use surveys to identify employee preferences and use employee feedback when planning company policy on flexibility. Ask employees about their preferred schedule, what additional resources they need at home versus the office, and what their motivations for coming into the office would be.
Lobo recommended using surveys to keep an open line of communication with the workforce. “Talk to your employees regularly and often [through surveys],” she said. “We are doing regular surveys with our employees to see what’s landing in regard to our flexible-first policy, and what we may need to tweak or change.”
2. Turn results into action through HR strategies.
Responding to employee survey feedback with policies and strategy is essential. Not only does this help you craft the best policy for your workforce’s needs, but it reiterates to employees that you value their input and are willing to make change based on their feedback, which boosts engagement.
Microsoft's 2022 work trend annual index report Hybrid Work is Just Work found that employees who agree that their organization uses employee feedback to enact change are “more satisfied (90% vs. 69%) and engaged (89% vs. 73%),” than those who do not. Meanwhile, employees who don’t believe their company incorporates employee feedback to make change are twice as likely to consider leaving.
3. Train managers (and employees!)
It’s likely that much of the hesitancy of financial services to embrace flexible work has more to do with the comfort level of leadership and managers.
“[Large financial institutions'] office space and infrastructure was built around in-person work, but it’s also that the leaders of those organizations have spent their whole lives leading in that brick and mortar environment,” said Lobo. “And then suddenly, we’re asking people to do something completely different to how they were schooled to be leaders and managers in the past.”
Training leaders and managers in the new work reality will help them develop the skills and competencies needed to lead in a hybrid work environment. At Marqeta, Lobo has created manager and leadership training that covers topics like learning how to encourage employee contributions in a remote meeting, leveraging EQ in the hybrid world, and leading employees who come from different backgrounds.
Employees have hybrid training, too. Beginning during onboarding and then continued over the employee journey, Marqeta focuses on reinforcing asynchronous working norms, meetings with a purpose, and emotional intelligence in the flexible-first environment.
4. Leverage tech and conduct an annual tech audit.
Hybrid work thrives on automation and asynchronous processes. To minimize the time employees need to be in the office, leverage technology to make processes asynchronous where possible.
Managers and employees should be given freedom to define one-on-ones and other team processes, but intentional tooling can help them document updates, meaning information doesn’t get lost. Organizations can also use performance management software to survey employees and get feedback on processes.
Since technology needs are dynamic, run an annual tech audit to spot gaps in needs for collaboration and ensure employees have the tech they need. A study by Salesforce found that employees who are unsatisfied with their technology stack are twice as likely to say they are burned out. The study also found that employees believe their organization is responsible for providing the tools they need for success.
“Commit to an annual collaborative technology and tools audit to make sure employees are equipped with what they need to perform, and include a feedback loop in our bi-annual employee surveys,” Lobo said. Organizations can take stock of what platforms and tech are already in use, while feedback from engagement surveys will highlight information on what’s missing, meaning employers can make sure employees have all the tools they need to do their best work.
Most People teams already know flexible work is here to stay. It’s more about gaining buy-in from executives and leadership — a particularly tough job in financial services. Yet in embracing more flexible ways of working, financial services organizations will reap incomparable benefits like an engaged workforce and better employee retention. For more strategies on boosting these two core workplace drivers, download Lattice’s eBook Driving Engagement and Retention in Financial Services today.