The “turnover tsunami” has ravaged most every industry, with millions of US workers, from the frontlines to the c-suite, leaving their jobs in the spring and early summer of 2021. Mostly, these moves are in favor of better work-life balance, higher wages, and more attractive benefits and perks. It’s a sea change that, even as many employers seek to bring employees back to the office, has sparked a stealth war for talent. In seeking to find a balance between recruitment and retention, many leaders find themselves skirting delicate issues of vaccinations, protective measures, and evolving CDC recommendations.
This is especially true in many sub-sectors of the financial industry, particularly those driven by traditional values and legacy infrastructure. However, each niche is unique. Banking, fintech, and wealth management, in particular, make an interesting trio. Return-to-work policies (especially in light of the Delta variant of COVID-19) look vastly different in each sector, and there are lessons to be learned across the board.
Big Banks Are Keeping People Close
It’s no secret that big banks have a huge swath of real estate. With a penchant for stately, high-rise, and elegant architecture, it quickly makes sense why many of these institutions are hesitant about leaving offices empty.
But it’s not just the physical offices that have defined banking culture; it’s also an attachment to in-person meetings that continues to eclipse virtual communication. Despite advances in modernization and digitalization within their services and capabilities, banking leaders are pushing for employees to return to the office as soon as possible for maximum in-person collaboration and development.
In one early example, long before a vaccine was even available, JPMorgan Chase CEO, Jamie Dimon, attempted to mandate a return to work. It didn’t last long—several workers tested positive for COVID-19 within the first week.
More recently, as vaccinations have become widely available, Morgan Stanley is making a statement: return to work, but be ready to prove your vaccination status. Those who are unvaccinated will be required to keep working at home. Many others—including Wells Fargo, Goldman Sachs, JPMorgan Chase, and Bank of America—are planning full returns over the next few months, depending on the trajectory of the Delta variant.
Their reasoning is optimistic: collaboration and innovation thrive best, they believe, when colleagues and teams can work together in-person. Furthermore, with banking being such a highly regulated industry, it’s often easier from a compliance and legal perspective to keep everyone under one roof.
The challenge, however, is that despite millions of Americans losing jobs in the harsh environment of 2020, the situation has done a 180. Workers by and large have the upper hand—and many are realizing the advantages of the work-from-home environment, including better work-life balance. The pandemic has opened many eyes, and if employers lack empathy and disregard the mental and emotional wellbeing of their workers, it’s more than likely they’ll see continued high levels of turnover.
There are a handful of banks, both in the US and globally, that seem to recognize this discord and are implementing hybrid models accordingly. Citigroup, Barclays, HSBC, Credit Suisse, and UBS are among those adopting new, more flexible work arrangements, potentially on a permanent basis.
FinTech Stays on Trend
The fintech sector has been pushing boundaries since its inception, and its reaction to the pandemic is no exception. Many have seen the burnout happening on Wall Street and are using it as an opportunity to poach top talent—and it’s working. Fintech not only offers significantly more flexible work arrangements (something it frequently did even pre-pandemic), it’s also a sector flush with investors and has remained very profitable over the last 16 months. This enables companies to build attractive compensation packages and sign-on bonuses.
NYC-based fintechs are some of the key players. Companies Ramp and Rho, among many others, both boast multiple recent hires from inside major banks and across various banking divisions. Rho, for example, grew from 25 employees to 60 over the course of 2020.
The ability to offer remote work is a huge differentiator in the financial sector, often the defining factor in a tight talent market. Many candidates are willing to sacrifice compensation for flexible, remote work environments, while others are simply looking for an opportunity to transition out of the legacy financial space and work on new, innovative projects. For fintech startups, there’s also the opportunity to get in at the ground level, giving employees tangible financial equity in the company.
British fintech Revolut has embraced remote work arrangements, recently launching a program allowing its employees to work abroad for up to two months a year. Meanwhile, back in its offices, they are redesigning their work environment to offer flexible, collaborative spaces, letting employees choose where and when they want to work. Employees are happy with the changes—many want to physically work alongside their colleagues at least some of the time. Productivity has not been affected, and the flexibility both in and out the office gives them the opportunity to thrive.
Wealth Management Rolls with the Punches
Though many firms in the wealth management space are seen as more traditional players, much like Wall Street, they certainly seem more open to finding the right balance. A conversation with Michael Stritch, Chief Investment Officer at BMO Wealth Management, revealed that they were settling into a long-term hybrid work model. Many workers are just as productive in a remote environment and client engagement is still maximized. That said, Stritch recognized that there was a cultural element of teamwork and camaraderie that could easily be missed without the right balance. A hybrid model seems to address this challenge appropriately.
For wealth management group Raymond James, the situation is similar. Though they have a return-to-work plan for early fall (once again dependent on the Delta variant and CDC recommendations), they also recognize that a one-size-fits-all policy isn’t advantageous. Their priority is to “embrace flexibility” in a way that simultaneously meets the needs of their advisors while best serving their clients and stakeholders.
A recent Forbes article published an interesting theory behind why many employers, particularly big banks, are requiring mass return-to-work. Experts predict a significant trickle-down impact of permanent work-from-home policies: from empty real estate to closures of local restaurants, shops, and other businesses, a lack of in-office workers would eventually mean lost tax revenue and deserted cities, impacting the quality of life of everyone who lives and works there.
Some believe it is this Doomsday scenario that large companies may feel obligated to mitigate—and that means getting their employees back to the office as soon as possible. It’s a troubling Catch-22, especially as sectors like fintech seek to recruit top talent from big banks based almost solely on the perks of remote work.
Additionally, as the Delta variant continues to run its course and the CDC reacts accordingly, many of these policies may end up changing anyway. If there’s anything the pandemic has taught us, it’s that adaptability is the key to success.