7 minute read 22 Feb 2021
Young business woman working at the computer in cafe

How boards can shape the workforce of the future

Authors
Mark Watson

EY Americas Financial Services Managing Director and Board Matters Deputy Leader

Transformational leader. Advisor on matters delivering global impact and strong governance. Passionate about sound public policy. Avid moviegoer. Electronic dance music fan. Proud Anglo-American.

Heidi Boyle

Principal, Financial Services Workforce Advisory Lead, Ernst & Young LLP

Passionate about helping people thrive in the workplace and creating a sense of belonging for all. Writer. Musician. Cooking enthusiast.

7 minute read 22 Feb 2021

A recent event convened banking directors to discuss the future of the workforce amid economic uncertainty and pressing social issues.

In brief:

  • The COVID-19 pandemic and racial justice protests have moved workforce and human capital considerations to the top of board agendas.
  • Employee wellbeing has been a top concern for boards in remote working, and flexible working arrangements look likely for the future.
  • Diversity and inclusiveness programs are receiving more attention and expanding beyond their traditional focus on recruitment and hiring. 

Boards of directors across the banking industry face a range of daunting challenges and difficult questions ahead in the wake of the COVID-19 pandemic and highly contentious elections in the US.

The pandemic has prompted boards to reimagine the workplace experience as remote working becomes more prevalent and looks to become a long-term option for some employees. The past year has also seen a significant focus on diversity and inclusion initiatives amplified by the racial justice protests of 2020.

These issues will remain on board agendas for the foreseeable future. The EY Financial Services Center for Board Matters recently convened nearly 40 directors from 26 institutions – from foreign banking organizations and the largest US regional banks – in lively dialogue about these pressing topics.

Resetting work experience, workplace and workforce 

Even as employees gradually return to work, boards are thinking long-term about the workplace. The goals include more flexibility for employees, more collaboration, increased organizational agility, and stronger cultures. Diversity and inclusion are key components of a stronger workplace. Boards remain committed to building on recent momentum and establishing a sense of belonging and equity for all employees.

The EY Work Reimagined study of 3,700 employees and 700 employers in the US, UK and Germany highlights the top issues and opportunities where employers are planning to make significant changes:

  • Real estate footprint
  • Flexibility and well-being policies
  • Remote work enablement and technology
  • Business travel and mobility
  • Learning and culture
  • Workforce planning and analytics

In each of these areas, boards and senior management face strategic and tactical choices as they seek the right design for today’s needs and the post-pandemic future. Initially, return-to-office plans focused on health and safety. Today, directors recognize that more employees will work from home in the future. The challenge will be finding the right balance of benefits for both employers and employees. However, this balance will vary considerably by company and even within companies, as different regions, metropolitan areas and parts of the business will have different needs. 

Generational differences matter 

Beyond direct effects, different demographic issues show up when seeking to understand what employees want from a return to work. In EY research, we asked employees to rank reasons for returning to work. 

Reasons for returning to the office

Baby Boomers (typically upper or middle management) feel most strongly their role requires them to be at the office and to collaborate with colleagues. For Gen Z, staying socially connected is the top reason to return to the office.

Designing the future of work 

Many management teams are moving from “we have to wait and see what others do” to more active planning. One bank conducted initial analysis to see which roles really require being in the office and which could remain remote. Then, having calculated the percentage of workers that would need to be in the office every day, they allocated space for that cohort, as well as other activities (e.g., collaboration), with appropriate distancing between desks and workstations. Similarly, bank leaders are exploring the implications of mandates for wearing masks, the need for contact tracing programs and making vaccines available to employees who want them. 

It is not all downside. Directors shared what they see as the biggest opportunities for reimagining work: 

What directors see as the biggest opportunities for reimagining work

Culture in the context of work from home 

Because culture is an area where boards and senior management can exert influence, the focus must be on defining desirable behaviors and then reinforcing and supporting them through recognition and changes in the operating model. Remote working has instilled new habits and behaviors in the culture, and boards and management must be intentional in identifying which are worth promoting. 

The questions to be addressed include:

  • Is there sufficient training and support for adopting new collaboration tools? 
  • How can trust be built and strengthened?
  • Are employees being allowed or encouraged to take vacation days? 
  • Are managers modeling the right behaviors?

Indeed, culture may be the top issue on directors’ minds in thinking about the future work experience. Most banks are reporting more cultural metrics at the board level, and not just because of conduct risk. Directors are careful to point out that accountability and ownership of the cultural metrics are necessary, rather than reporting for the sake of reporting. As one director put it, “It’s hard to manage culture from a dashboard.” 

Using technology to “listen”

There is intense interest in how technology can foster collaboration, create dynamic interactions and strengthen workplace culture. Powerful new engagement software can help management monitor and manage cultural impacts and support more data-driven and actionable reporting to the board. 

The same is true of new “listening channels,” such as frequent surveys and insights derived from enterprise system data. Some firms have adopted brief pulse surveys to provide more timely and granular data than traditional annual surveys or quarterly check-ins. A number of banks are also using artificial intelligence (AI) in assessing workplace strategies and in-person interactions. AI can identify employees at risk of burnout (a serious concern for directors) by tracking their scheduled meetings and providing alerts if they are working excessive hours or not taking time off. 

Firms are taking many creative approaches to promote connection among employees, including protocols for shorter meetings, breakout sessions in large video calls, and promoting social conversation at the beginning and end of meetings.

The customer perspective

Directors routinely raise questions about the impact of remote working and cultural shifts on customers. In many cases, customers naturally migrated to digital channels when banks were closed. 

In investment and commercial banking, customer-facing staff are using virtual dinners or cocktail hours to stay connected. Not surprisingly, some sales and service staff will be glad when travel restrictions are lifted and they can call on their clients in person. 

While the EY Work Reimagined study covered multiple industries, banking was the top sector in terms of commitment to making bold changes for future success. The last year has demonstrated just how quickly and effectively banks can change. Directors understand that capability will be even more important going forward, particularly with renewed conversations around the role of bank branches.  

The journey to diversity and inclusion

In the wake of social justice protests in 2020, there is renewed focus on corporate diversity, inclusiveness and equity (DI&E). Beyond recruitment and hiring programs, which remain important, there is increased urgency around creating a sense of belonging and relatedness to the organization.

Behavioral change and the elimination of unintended biases and structural inequities are key to progress. Organizational policies and processes (including compensation, attendance and onboarding) must be designed for systemic fairness and to support workplace equity. 

The growing body of evidence that companies with higher degrees of diversity and inclusiveness enjoy a performance advantage has raised the bar on DI&E programs. Board members are energized to meet the moment by building on current momentum and cultivating tangible and sustainable change. 

They also acknowledged the rising demand – even expectation – among employees that their companies will demonstrate leadership on anti-racism and other social issues. The board’s first responsibility is to set the tone for the organization. Directors can seek out diverse voices to participate in strategic discussions, as well as take personal accountability by holding smaller conversations.  

Leadership in a time of uncertainty

Boards already had a full plate before COVID-19 struck. Even as diversity and anti-racism have become imperatives, climate change is no less urgent. In combination with the pandemic, these forces have combined to accelerate momentum toward stakeholder capitalism and a broader, more holistic conception of the value business produces for society. Board directors understand just how these issues overlap and are bearing them in mind as they devise strategies to reinvent the work experience and sustain what’s best about their culture.

Click here for all the insights, including further perspectives shared by board members and EY and results of polling conducted during the sessions.

Summary

The pandemic has prompted boards to reimagine the workplace experience as remote working has become more prevalent and looks to become a long-term option for some employees. The past year has also seen a significant focus on diversity and inclusion initiatives amplified by the racial justice protests of 2020. These issues will remain on board agendas for the foreseeable future, as discussed by bank board members during an event hosted by the EY Financial Services Center for Board Matters.

About this article

Authors
Mark Watson

EY Americas Financial Services Managing Director and Board Matters Deputy Leader

Transformational leader. Advisor on matters delivering global impact and strong governance. Passionate about sound public policy. Avid moviegoer. Electronic dance music fan. Proud Anglo-American.

Heidi Boyle

Principal, Financial Services Workforce Advisory Lead, Ernst & Young LLP

Passionate about helping people thrive in the workplace and creating a sense of belonging for all. Writer. Musician. Cooking enthusiast.