Returning to Work: Is a Stand-off Between Bank Employees and Management Inevitable?

By Nicholas Larsen, International Banker

“Can we shake hands? Can we hug colleagues we haven’t seen since 2020?” Jane Fraser, chief executive of Citigroup, recently asked in one of her posts on LinkedIn. “While every country is at a different stage of tackling the pandemic, I know we all have a lot of questions when it is our turn to return to the office. I firmly believe we are better together and that nothing replaces in-person learning and apprenticeship, but I also know the world has changed, and we need to evolve with it.”

It would seem that part of that evolution to which Fraser was referring is the need for banks to become more flexible in terms of where and how their employees can continue to work in the “new normal” environment. A number of Wall Street’s biggest banks had made plans in the summer for most workers to return to the office following the September 6^th Labor Day holiday in the United States. But with recent variants of the novel coronavirus decisively delaying those plans, banks are now waking up to the reality that considerable adaptability will be required to not only ensure the safety and wellbeing of employees but also maintain business continuity.

With that in mind, many banks have developed hybrid models for work that incorporate a work-from-home component alongside a commitment to be physically present at the office at least part of the week. Nonetheless, considerable variation within such models exists across major banks, with the more liberal lenders allowing more time at home and the stricter ones demanding much more office presence.

“If you can go to a restaurant in New York City, you can come into the office. And we want you in the office,” Morgan Stanley’s chief executive, James Gorman, stated in no uncertain terms back in July. “Make no mistake about it. We do our work inside Morgan Stanley offices, and that’s where we teach, that’s where our interns learn, that’s how we develop people.” But it would seem the delays caused by COVID-19’s Delta variant have somewhat tempered the bank’s expectations, with no official timeline for a return to the office yet announced. That said, those Morgan Stanley employees based in the United States who are fully vaccinated have been able to work from October 1 onward upon showing proof of vaccination, whilst those who are yet to be vaccinated can continue to work from home.

Indeed, it would seem that vaccination and other safety precautions such as mandatory testing and mask-wearing are already playing a crucial role in ushering staff back into the office. “Starting September 13, all colleagues at our NYC HQ and other offices in the Tri-State area, as well as Chicago, Boston, [Washington,] D.C. and Philadelphia, will be expected to return at least two days a week, and vaccination is required,” Citi’s head of human resources, Sara Wechter, wrote in August. “Given the increased number of employees returning to these buildings, and the Delta variant in the U.S., we are taking this approach to ensure a safe workplace…. For our colleagues working at our branches, we strongly encourage them to get vaccinated and will require rapid testing and wearing of masks for all colleagues.”

And although JPMorgan Chase initially scrapped its mask mandate in May, it was reinstated by early August. The largest US bank told its US-based workers that the policy change was down to the highly transmissible nature of the Delta variant and the changes made to the official US coronavirus guidance. Currently, JPMorgan allows unvaccinated employees who qualify for religious or medical exemptions to work in the office so long as they wear masks and take rapid COVID-19 tests twice a week. “We understand that not everyone will agree with our thinking and approach. And while we fully respect individual choice, we believe it is our responsibility to undertake these steps,” according to an October 4 memo to employees, which also explained that while unvaccinated currently employed workers in client-facing roles could continue to work at the bank, only fully vaccinated applicants would be hired for such positions going forward.

Goldman Sachs had also taken a similarly hard-line approach towards returning to the office, only for its plans to be somewhat scuppered by the Delta wave. Initially, as the bank stated in a May memo, it wanted most workers back by June 14. “We know from experience that our culture of collaboration, innovation, and apprenticeship thrives when our people come together, and we look forward to having more of our colleagues back in the office so that they can experience that once again on a regular basis,” the bank’s chief executive officer (CEO), David Solomon, explained. However, this target was then delayed by a month after government coronavirus restrictions were extended.

By mid-July, Solomon confirmed that around half of Goldman Sachs employees were back in its New York, Dallas, Salt Lake City and Hong Kong offices and that 45 percent were back in its London headquarters. “I’ve heard from so many of our colleagues that they are glad to be back in the office,” Solomon said during the investor call for Goldman’s second-quarter results. “I believe that bringing us together, forging the close bonds and supporting a culture of collaboration has renewed the sense of teamwork that allows our people and our business to thrive.”

But not all bank employees are happy with their employers’ plans to return to office-based working arrangements. Employees at the European Central Bank (ECB) who were told in July that they would have to be in the bank’s Frankfurt offices from October onwards for an average of three days per week, for instance, expressed distinct concern with such a mandate. A July 29 survey carried out by the ECB staff’s union, IPSO (International and European Public Services Organisation), found that 61 percent were not pleased with the decision, while a further 26 percent said it was not their preferred scenario, but they could accept it, and just 12 percent agreed with the plans. “What we have seen so far is a very much top-down approach,” IPSO’s president, Emmanuel Larue, was quoted as remarking in political publication Politico. “IPSO would like that the ECB listens more to its own staff. What is the point of launching staff surveys if this is to eventually ignore their outcome? This is just a waste of everybody’s time!”

At the other end of the scale, it’s arguably HSBC that has implemented the most pronounced changes to the traditional working model among the world’s biggest banks. In April, the British lender’s new hybrid model gave more than 1,200 of its UK staff permanent contracts to work from home. “We are in discussions with contact centre colleagues who serve HSBC UK retail customers about ways that we can offer flexibility on work location while ensuring the way we work meets our customers’ needs,” an HSBC UK spokesperson said in April. “These discussions are continuing.” HSBC has also indicated that it expects to provide remote employees with extra compensation to cover additional expenses associated with working from home, such as higher utility bills, and has confirmed its plans to slash its global office footprint by around 40 percent.

Fellow British lender NatWest (National Westminster Bank) is also stressing flexibility among its workforce as a priority. “It goes without saying—there is no ‘one size fits all’, as not every role is the same,” CEO Alison Rose recently told colleagues in a broad discussion about the future ways of working. “Some roles, and some people, will need to be back in the office 100 percent of the time—that’s just the nature of the role; they cannot be done from home. Other people will be able to work remotely the majority of the time….and for others there will be a hybrid solution.” As such, Rose has implemented a new “ways of working” framework around the three categories: remote-first, hybrid and office-first based on the different roles and needs across the bank.

Indeed, many banks are making considerable efforts to ensure the transition from working from home to the office environment is as delicate as possible. Therapy puppies were on hand for Citigroup workers returning to their London offices, for instance, while JPMorgan is providing group-therapy sessions for its employees. Until very recently, Goldman was providing free food and complimentary gym membership to employees from some of its offices as well as free ice cream to incentivise return-to-office-based work. And Bank of America welcomed back staff working in its Chicago offices with balloons and goody bags.

But will this be enough to convince those employees who are increasingly demanding more flexible schedules as part of the working world’s adjustment to a new normal? Perhaps not. A poll by Indian consulting firm Infosys Limited of 520 managers and employees at US and European banks found that while 71 percent of respondents worked at the office five days per week before the pandemic, just 27 percent now want that same schedule today. And although only 13 percent want to be fully remote, it does show that bank employees clearly want to spend much less time in the office than they did pre-pandemic.

Should those banks that insist on adopting a conservative approach towards remote working continue to show an excessive aversion to this complex matter, they could risk an exodus of staff towards firms offering more accommodative working environments. That said, although the expectations of the managers and the desires of the employees are not fully aligned, closing this gap could be “relatively easy”, Infosys claimed. “More than one-third (36 percent) of employees want to work remotely just once a week, while 27 percent prefer to be in the office every day,” according to Infosys. As such, the firm contends that those banks that are “willing to bend slightly could satisfy a large proportion of employees without completely upending traditional schedules or losing the personal interaction that fuels learning and collaboration”.

“There’s an ‘ease into it’ feeling, that we’re going to figure this out a little bit as we go along,” Peter Torrente, who leads the US banking and capital markets practice at the consultancy KPMG, told Bloomberg in September. “There’s no one-size-fits-all across the industries or even within a particular company.”