The Rise and Fall of Remote Working Practices: Is Flexible Work a Permanent Fixture in the Financial Services Sector?
As major financial institutions across the globe call their remaining remote workforce back to the office, many employees are still reluctant to return to the workplace full-time. According to a recent survey of 1,400 UK financial services employees across banking, capital markets and insurance, 24% of workers would prefer to continue working remotely, while 69% want to work just two days or less in the office and only 8% favour a return to the workplace full-time.
The pandemic has brought about a radical shift in terms of what people expect of their workplace and how they work, and the balance between flexibility and the needs of the office will be an ongoing debate during 2021. Many financial organisations remain divided on what the best approach will be, with others demanding a full return to the office despite what has occurred over the last year. The following will explore the uptake and impact of remote working practices within the financial services sector, and what effect this is having on the recruitment market.
The Rise of Remote Working During COVID-19
The concept of remote work existed prior to the pandemic and is a business model many sectors have been experimenting with for years. Historically, financial organisations have been reluctant to introduce flexible work schedules; before COVID-19, 29% of financial services companies had at least 60% of their workforce working remotely at least once a week compared to 36% reported across all industries. The pandemic has sped-up the uptake of remote working practices within the financial sector and it has largely proved fruitful; with 82% of employers saying it has been successful or very successful according to a survey by PwC.
As the threat of COVID-19 dissipates, many believe remote working practices could be here to stay. At Rutherford, we have observed a general inclination towards flexibility amongst our candidates – with many realising that they can be just as productive working from home. Those that express a desire to work remotely commonly cite lifestyle reasons, such as avoiding the commute, the opportunity to relocate or balancing work-life priorities.
Interestingly, one of the biggest factors determining a candidate’s desire for flexibility appears to be age. Individuals in their late-20s to early-40s, such as young couples, young families or early highflyers risking burnout, tend to voice a preference for working remotely part-time if not full-time. These demographics have largely enjoyed greater flexibility, as it has helped them improve their mental and physical health, work-life balance and in many cases, personal relationships.
Issues with Remote Working
Remote working is a decisive topic, not only between employers and employees but between different seniorities. Candidates at entry level or early on in their careers are more inclined to have a greater preference for being in the office, fearing they will miss out on opportunities for progression, networking and informal learning if they’re not physically present. Furthermore, work from home policies may have a disproportionate impact on young employees from disadvantaged backgrounds, who frequently lack the space or resources needed to work effectively remotely; meaning they could miss out on valuable opportunities to develop employability skills or gain social capital.
Remote working could also be detrimental for diversity and inclusion agendas. Within the financial services sector, women and ethnic minorities who struggle to rise in the industry often rely on developing strong relationships with senior colleagues who they can relate to, and who then act as mentors during the course of their careers. These relationships can be challenging to build in a virtual environment, where it can be difficult to independently connect with senior personnel.
For some, remote working has caused the boundaries between work and personal life to become blurred. This has led people to feel overworked and stressed, causing both their productivity and mental health to suffer. Others have reported feeling isolated and undervalued, craving the small social interactions or inclusive discussions that the workplace once provided.
Striking a Balance - How are Financial Organisations Adapting?
According to PwC’s December 2020 Remote Work Survey, 70% of industry employers believe workers should be in the office at least three days per week to maintain a distinctive culture. This view is distinctly at odds with employee expectations, with 30% of workers saying they would telecommute five days a week if they could. This contrasting outlook poses a ‘big management challenge’ for banking institutions according to Bhushan Sethi, a global leader of PwC’s people and organisation practice who focuses on the financial services industry.
Financial organisations across the globe have taken markedly different approaches to flexibility. Several of the largest US banking corporations have already announced strict back-to-work mandates, citing the need to maintain company culture, ensure quality of work and promote good behaviour – especially within client-orientated roles. Will this have an impact on the quality of candidates these companies are attracting? The answer is probably not, these firms will merely use the desire to work remotely as a screening method to find candidates that are more suited in terms of their operational and cultural agenda.
Comparatively, some financial institutions do appear to be adapting – especially fintechs and modern banks. For example, NatWest has recently announced that only 13% of their staff will work in the office full-time, with 32% expected to work mainly from home and 55% taking a hybrid approach. There does appear to be a general trend towards flexibility, with some financial organisations making wholesale changes to their physical setups by reducing their desk space by 30-35%, while others are experimenting with a rotating hybrid model or introducing satellite offices.
How has this impacted the recruitment market?
The remote working practices established during the pandemic have undoubtedly reshaped the financial services recruitment market. With the majority of firms still expecting employees to come in at least 2-3 days a week, flexible working policies have not necessarily widened the pool of available candidates but increased the liquidity of the job market.
Remote work has made it much easier to reach candidates, but much harder to control them. Rutherford is seeing candidates run multiple application processes at the same time, perhaps 3-4 in a week. Additionally, as some firms are being targeted for their people, we are seeing a significant increase in counter offers.
Despite the majority of candidates desiring workplace flexibility, this is often dependent on the role in question. Those seeking front of office positions, often related to client or sales, often have a preference for being in the office full-time. Equally, those candidates applying for roles that are more process related or back of office are generally seeking a greater amount of flexibility.
The pandemic and the rise of remote working has fundamentally changed how people job search and work. However, the majority of employees across financial services have admitted to missing face-to-face interactions, which allow for innovation and the development of softer skills – such as trust and empathy. While others miss the energy that comes from working alongside other people. This suggests a hybrid approach, rather than a predominantly remote model will be the way forward for many financial organisations.
Regardless, there has been a shift in the way people value work within their lives, and those that do not adopt flexible working practices may seek to redefine their corporate model or rejuvenate how the office space functions.