For reasons that we’re all familiar with, the imperative for remote working was largely thrust upon the business world, the financial sector included. But what about its complementary dynamic: return to office? Might there be consequences for companies that insist on restoring this “norm”?
In an era when flexibility and autonomy are the new black, financial services leaders are ready to break the chains of traditional office norms. The results of a recent Deloitte and Workplace Intelligence survey make it clear: the future of the financial services sector is hanging in the balance, and leaders are prepared to walk out the door rather than surrender their hybrid work privileges.
The concept of work has undergone a radical transformation in the last few years. Gone are the days when the office was the only place for serious business. Flexibility and remote work have moved from being perks to being prerequisites for leaders in the financial services sector. But this shift isn’t just about convenience. It’s about fostering engagement, bolstering retention, and driving key outcomes, as the report reveals.
The High Stakes of Hybrid Work
To truly understand the stakes of the hybrid work debate in the financial services sector, we need to understand the significance of the 66 per cent of leaders prepared to leave if required to return to the office full time. This isn’t just a two-thirds majority; it’s a resounding declaration of the value these leaders place on flexibility.
These leaders aren’t your average employees. They’re the innovators and strategists who guide the direction of their firms, the ones who make critical decisions that shape the future of the financial industry. They hold positions of influence and power, and their actions can create ripple effects throughout their organisations.
Imagine the scenario where these leaders decide to walk out the door. The loss of their combined expertise, insights, and leadership would be a significant setback for any firm. It’s like removing the rudder from a ship sailing in turbulent waters. The organisations they leave behind may struggle to navigate the complex currents of the financial sector without their seasoned hands at the helm.
It’s not just the immediate fallout that’s concerning. Consider the long-term implications. The sudden departure of experienced leaders could cause a leadership vacuum, hampering growth and innovation. It could take years to rebuild the leadership pipeline and, during this time, firms may miss out on opportunities and lose their competitive edge.
Moreover, the departure of such a significant number of leaders could damage a firm’s reputation. It could raise questions about the firm’s culture and priorities, making it more challenging to attract top talent in the future.
The high stakes of the hybrid work debate, therefore, cannot be overestimated. It’s not just about accommodating individual preferences. It’s about the potential to disrupt the very fabric of financial institutions, altering their trajectories and potentially shaking the foundations of the financial services sector.
As such, every decision about workplace arrangements should be made with these stakes in mind. The future of financial services institutions depends on it.
A Changing Workplace Paradigm
The idea of a fixed, traditional workplace is becoming as antiquated as a rotary dial telephone in the era of smartphones. As the Deloitte and Workplace Intelligence survey indicates, the trend is moving decisively towards flexible work arrangements. But what does this transformation entail, and why is it so important?
A paradigm shift is occurring in our understanding of work and where it happens. The office, once the undisputed centre of professional life, is losing its monopoly. We are witnessing the rise of a new model: the hybrid workplace, where work is an activity rather than a location. This model caters to the needs of employees for flexibility and autonomy while also meeting the business needs of organisations.
This shift is more than just a logistical change. It’s a cultural transformation that reflects the evolving values and priorities of today’s workforce. Financial services leaders are rejecting rigidly prescribed workplace models that don’t offer them the flexibility they desire. For instance, some organisations now require their workforce to be in the office three to four days a week. However, the survey reveals that only 18 per cent of respondents consider this their ideal arrangement, suggesting a disconnect between institutional mandates and employee preferences.
Moreover, leaders are voicing their concerns about the impact of workplace arrangements on their careers. While remote work is associated with improved well-being and engagement, 62 per cent of leaders in hybrid work arrangements believe that working remotely more often could harm their career progression. This suggests a tension between the desire for flexibility and the perceived need to be visible in the office for career advancement.
The changing workplace paradigm thus presents both opportunities and challenges. On one hand, it opens the door to new ways of working that can boost employee satisfaction, productivity, and work-life balance. On the other hand, it raises difficult questions about how to ensure fairness and career progression in a hybrid work environment.
The financial services sector needs to navigate this changing landscape carefully. Striking the right balance between flexibility and the perceived need for in-office presence is crucial. Institutions that manage to do this effectively can reap the benefits of the hybrid work model, while those that fail to adapt risk alienating their leaders and jeopardising their future success.
The Threat to Female Leadership
The potential exodus of financial service leaders due to rigid return-to-office mandates is alarming, but there’s another dimension to this issue that warrants urgent attention: the threat to female leadership.
The report shows that, for leaders with care-giving responsibilities, the clock is ticking even faster. They are 1.3 times more likely to exit if their remote work options are rescinded. And unfortunately, women are still much more likely to be carers.
More broadly, almost half (45 per cent) of the women respondents in senior leadership roles are considering leaving their current employer within the next year. This statistic is a distress signal that cannot be ignored. Not only does it underscore the possible depletion of leadership in the sector, but it also highlights a potential setback for gender diversity in the top echelons of financial institutions.
The strict “return-to-office” mandates some financial services institutions are considering could be like setting a time bomb for their leadership pipeline. Consider the potential impact on the sector. Women leaders bring unique perspectives and approaches that can drive innovation, improve decision-making, and contribute to business performance. Their departure would deprive the sector of these valuable insights and could affect the competitive edge of financial institutions.
Moreover, the loss of female leaders could have a domino effect, impacting future generations of women in finance. Female leaders often serve as role models and mentors for younger women in the industry, encouraging them to aspire to leadership roles. If these role models exit, it may deter other women from pursuing leadership positions, thereby diminishing the pipeline of future female leaders.
The potential loss of female leaders also presents a reputational risk. In a world that is increasingly focused on diversity and inclusion, the mass exodus of women from senior roles could harm an institution’s image, affecting its ability to attract talent and potentially impacting relationships with clients and investors who value diversity.
Addressing this issue requires financial institutions to revisit their policies and create a work environment that meets the needs of their female leaders. This might include providing greater flexibility, supporting work-life balance, and ensuring that remote or hybrid working does not impact career progression. It’s not just about retaining talent; it’s about creating an inclusive culture where diverse leadership can thrive.
The threat to female leadership is a serious concern that adds another layer of complexity to the hybrid work debate. How financial institutions respond to this issue will be a true test of their commitment to diversity and could significantly influence their future trajectory.
What’s Next for Financial Services Institutions?
It’s time for financial services institutions to reconsider their return-to-office strategies. Stubborn resistance to flexibility could lead to a leadership exodus. The solution? A gradual transition with flexible work arrangements and an enhanced in-office experience.
The key lies in maintaining an equitable work environment, whether employees are in the office or working remotely. This approach could not only retain top talent but also attract a more dynamic and engaged workforce.
The report serves as a clarion call for financial services institutions. The future of work is here, and it’s flexible. Institutions that listen and adapt will likely thrive in this new era, while those that resist may find themselves struggling to keep their leadership pipelines intact. The choice is clear: adapt or risk losing your top talent.
That’s what I tell the 5-10 financial service leaders with whom I speak every week about figuring out their hybrid work models. Even though the financial sector is a more conservative sector than many others, if it wants to avoid a leadership talent drain – especially of female leaders – it needs to adapt to the flexible future of work.
The financial services sector is at a crossroads. The path that institutions choose will likely determine their future success. As they navigate this new landscape, the message from their leaders is loud and clear: flexibility is not just a desire, it’s a demand. Those institutions that heed this call are likely to retain their leadership, foster engagement, and secure their future in the ever-evolving world of financial services.
About the Author
Dr. Gleb Tsipursky helps leaders use hybrid work to improve retention and productivity while cutting costs. He serves as the CEO of the boutique future-of-work consultancy Disaster Avoidance Experts. He is the best-selling author of 7 books, including the global best-sellers Never Go With Your Gut: How Pioneering Leaders Make the Best Decisions and Avoid Business Disasters and The Blindspots Between Us: How to Overcome Unconscious Cognitive Bias and Build Better Relationships. His newest book is Leading Hybrid and Remote Teams: A Manual on Benchmarking to Best Practices for Competitive Advantage. His cutting-edge thought leadership was featured in over 650 articles and 550 interviews in Harvard Business Review, Forbes, Inc. Magazine, USA Today, CBS News, Fox News, Time, Business Insider, Fortune, and elsewhere. His writing was translated into Chinese, Korean, German, Russian, Polish, Spanish, French, and other languages. His expertise comes from over 20 years of consulting, coaching, and speaking and training for Fortune 500 companies from Aflac to Xerox, and over 15 years in academia as a behavioural scientist at UNC-Chapel Hill and Ohio State. A proud Ukrainian American, Dr Gleb lives in Columbus, Ohio.