The slow walk back to five days in-person for Canada's banking employees reflects an emerging consensus that remote work is a productivity killer.Fred Lum/The Globe and Mail
John Turley-Ewart is a contributing columnist for The Globe and Mail, a regulatory compliance consultant and a Canadian banking historian.
Work from home isn’t working for Canada’s banks. It isn’t working for every banker either. In May, Royal Bank of Canada RY-T informed staff that come fall they will be in the office four days a week. A similar edict was issued by Bank of Nova Scotia BNS-T in early June.
It’s about time. Fully remote work at Canada’s other large banks, Toronto-Dominion Bank TD-T, Bank of Montreal BMO-T, Canadian Imperial Bank of Commerce CM-T and National Bank of Canada NA-T, are but COVID-19-era memories. All embrace hybrid models, requiring office work a few days a week.
This slow walk back to five days in-person reflects an emerging consensus that remote work is a productivity killer. It undermines common purpose in banking departments responsible for delivering and managing complex, highly regulated services and products to businesses, consumers and other stakeholders.
In such work environments, effective collaboration is crucial to execution, sustaining a positive work culture and stamping out toxic work behaviours that undercut performance. And the banks are not alone in pushing for a return to the office to deliver better outcomes. Google Inc., Amazon.com Inc., Dell Technologies Inc. and Zoom Communications Inc. are all on the same page.
Back in a March, 2023, quarterly earnings conference call, RBC chief executive officer Dave McKay mentioned the challenges associated with remote work, saying, “All CEOs in every sector I talk to are struggling with a balance of developing talent, promoting talent, building culture, creating productivity.”
Such struggles are validated in various academic journals. The Harvard Business Review recently reported that hybrid or remote work arrangements lead to lower overall performance. A more detailed 2023 study that uses analytics data from 10,000 skilled professionals at a technology company reflects many of the problems banks are likely facing as a result of remote work, and why its days in banking are numbered.
The peer-reviewed article shows a drop in productivity that ranged from 8 to 19 per cent. Higher communication costs, more time allocated to co-ordinating activities and meetings and a reduction in uninterrupted hours of work all contributed to lower productivity.
Networking with peers and managers in their business units fell, as did one-on-one meetings with supervisors. Moreover, employees working from home significantly increased average hours worked. Most importantly, perhaps, the study reports that training opportunities decrease. Those with experience building and managing teams know that reduced training means new employees are at a disadvantage.
Objections to in-person mandates from head-office workers are instructive. Those most resistant to working from the office full time are likely to be older, more experienced staff and managers who understand the bank’s work culture and who have existing networks they can tap at will.
Some staff believe bank leaders have not made the transition back to the office easy. One of the irritants is the shrinking of office footprints compared to pre-pandemic standards to cut costs. Smaller spaces make possible cubicle “hotelling,” a practice that has staff use a reservation system to book a tiny work desk jammed next to rows of other ones, reducing workspace, privacy and the ability to focus.
Nobody gets their own permanent desk. There is no personalization. Tiny lockers are offered to put personal belongings in. All of this adds to the stress of working in the office. If you forget to book or fail to book early, one is left to work from the cubicle by the bathroom on the other side of the office from one’s team.
In short, it defeats the purpose of being in the office.
At the beginning of the pandemic, many if not all of Canada’s bank leaders used work-from-home mandates to determine if productivity, communication, collaboration and talent development could be sustained without the costs of maintaining physical offices. The ultimate answer to that assessment is emerging now. The answer is no.
For banks, a return to office is critical to achieve optimal productivity. When bank CEOs make that ultimate call to their employees to return to the office, it is their job to offer offices that staff want to return to.