With an unprecedented number of knowledge workers experiencing remote working (many for the first time) during the Covid-19 crisis, and with many realising newfound benefits from these arrangements, companies in a post-lockdown world will face mounting pressure to offer fully flexible working options as a key retention and recruitment strategy, according to one of Australia’s leading industry recruiters.

As Australia’s knowledge-based organisations slowly return to business-as-usual conditions, employers will have to reckon with the reality that staff demands have not only evolved, but a new compact between employers and employees has emerged – one that recognises that the office is no longer the absolute centre of an individual’s productive potential.

Despite weariness over the length of time spent under Covid restrictions (with Victoria experiencing among the world’s longest stints in lockdown), the popularity of remote working has remained strong among Australian workers.

Post-lockdown, three out of four Australians maintain that their ideal work environment will be a mix of remote and in-person working, a study by PwC found.

While work from home (WFH) was once a luxury afforded only to those in certain niche or senior corporate positions, over the last 18 months, nearly all knowledge workers have – at least to some degree through the course of the Covid crisis – been exposed to the benefits and value of remote working.

Speaking at a recent roundtable, Will Reep, director of accounting & finance at leading financial services specialist recruitment firm Profusion, underscored what was, for many, an entitlement only accessible to a few at the top. He noted that knowledge workers in typically lower income brackets were also among those least able to tailor their working arrangements.

This group of workers (which also represent the bulk of the financial service workforce) “were typically in process-based or front-line operations and service environments. They were perceived as needing supervision rather than leadership,” Reep said. “They also, in many cases, lived further away from their workplace due to the high cost of property in our major cities.”

“Over the last two years, these people, from across multiple job families and rank, have proved themselves more than capable of operating remotely,” Reep added.

For Reep, these individuals have not only shown themselves to be “highly effective working from home”, but have also “adapted to the change in lifestyle that WFH has provided, such as big cost and time savings” that have come with the removal of a daily commute.

“If you’re on $60,000 to $80,000 a year, that saving [on commuting costs] actually makes a pretty dramatic difference to your overall financial situation.”

As a result, Reep feels there will be “a lot of pressure on organisations from employees to retain a high degree of flexibility going forward”.

Despite this, he noted that before the initial Sydney and Melbourne lockdowns (in mid-2021), there was already an evident “push” from local employers to force this cohort back into the office – a push that was being met with considerable resistance from staff.

The most recent lockdowns, Reep added, “have only exacerbated this situation”.

“Employees in roles requiring specialised skill sets, but who are not typically well paid, will be particularly aggrieved by blunt force efforts to drive them back into the office.”

However, with many having settled into a new work-life rhythm, or for those who have made major lifestyle changes, Reep believes “there is no going back”.

“Over the past 18 months, we have seen many people hired into roles which are based in different cities to the one in which they live. We have seen people make ‘tree’ or ‘sea’ change moves while continuing to do their role with the same employer. The only thing that has changed is where they live.”

Re-learning old ways

For Simone Mears, co-founder and managing director of Profusion, Covid lockdowns have fundamentally reshaped employees’ expectations, not only of their own working situations but also how they assess and value their employer.

“In New South Wales and Victoria, our biggest centres for financial services, 2020 was about learning how to WFH. In 2021, WFH was normalised. Moving into 2022, we are going to have to re-learn how to work in an office”

Not only will employers need to reassess the function of the office and revaluate these working environments, Mears said, “they’ll also have to give their people a reason to come back to the office”.

Rigid, office-only working arrangements, including the “mandating” of a five-day work week in the office, or to previously agreed models such as one day from home/four in the office, “has the potential to land badly with employees”, she added.

“People believe they have more than proved their capability to work productively from home. Reinstating an inflexible working model will only serve to disengage an already unsettled workforce.”

Forcing employees to surrender personal gains made through the course of 2020 and 2021 – for instance: their “unofficial salary increase” from avoiding travelling costs; the time saved, now being spent with families, no longer sitting in multiple-hour commutes; and ability to take on more exercise or personal projects – will not prove popular.

Indeed, asking staff to give up, without a compelling reason, personal gains that have made their lives fundamentally better, Mears argued, will only serve to widen the disconnect between employer and employees.

“Employers will have to provide a compelling case for a return to the office – one that draws a connection between being in the office and a meaningful purpose for being there in person.”

A manager, for instance, can point to the knowledge-sharing, morale and productivity benefits of engaging in face-to-face teamwork or collaboration; however, Mears affirmed, leaders will have to demonstrate what this will look like and how it will work in a post-Covid workplace.

“Any return to the office has to be practical, reasonable and fair for both parties.

“Flexibility is two-sided. Employers should not be afraid to tell people what they need, but they also need to be prepared to listen to and act on their employees’ needs.”

Tom Brown, divisional director of Profusion’s Melbourne business, warned that “a dictatorial approach in this environment will likely lead to a loss of talent”.

“Knowledge workers in Sydney and Melbourne have been WFH on-and-off for almost two years, and for the most part they’re doing a really good job.

“Any business which turns around and tells its people that they must return to the office due to concerns around productivity, or even just from a desire to return to pre-Covid working practices, runs a high risk of resignations.”

With unprecedented economic stimulus, and a 97 per cent drop in arrivals compared with pre-Covid levels, Australia is facing critical labour skill shortages; this is being keenly felt across the entire financial services sector.

Retention of employees has never been more important. For Mears, a poorly thought-out approach to “go-forward flexibility programs” will be rejected by employees who now expect a more nuanced approach.

It also runs the risk of workers and potential recruits perceiving “deeper cultural issues” within an organisation.

An unnecessarily rigid approach that fails to account for changing workforce dynamics – where “flexibility and culture are inextricably linked” – will be problematic in both retaining existing people and attracting new ones, Mears said.

“It’s not just about flexibility. Reactive attitudes around returning to the office will be perceived as an underlying – and a negative – cultural issue at an organisational level.

“Instead of being rewarded and thanked, employees will feel criticised and rejected and they will take action.”

Flexibility a workforce right

Covid, the Profusion team argue, has effectively “blown up” existing models and old world thinking around remote working. The experience has challenged long-held prejudices that it results in a less productive, and less fruitful, mode of work.

In fact, levels of productivity did not demonstrably change during Australia’s lockdown period – and may have even seen a slight uptick. Moreover, firms that took active steps to adapt to remote working, an Accenture survey found, were three times more likely to see improved productivity.

Flexibility can no longer be seen as a select workforce privilege; employees, of all rank, increasingly see it as their right.

According to Brown, companies have reached a point where WFH can be seen as both a key retention strategy and attraction strategy for new employees. Providing an optimised and tailorable flexible work offering, therefore, serves as a carrot for existing workforces as well as prospective recruits.

“Pre-Covid, one of the first questions I would be asked by a candidate was about remuneration. Now, it’s the flexibility policy of a company post-return to the office.”

With allied businesses like Deloitte Australia offering their staff the option of working 100 per cent remotely even after the pandemic abates, pressure will be on the wider financial services sector industry to conform.

For Mears, the financial services industry needs to embrace flexible working with policies that reflect the wider social changes that have occurred over the last 18 months. Stubborn refusals to do so, she fears, risks significant workforce attrition.

Deloitte’s “front foot” efforts to extend its flexible working policy to all employees was roundly praised by the Profusion team.

“This is where organisations will have to be. They have to be proactive and say, ‘This is our new policy”, Brown said.

However, Reep cautioned that flexible working should not be treated as “a cure-all to retention issues”. He notes many of the larger Chartered firms are still losing staff despite 100 per cent WFH moving forward.

“This is the result of understaffing, which is forcing hours and related stress levels up. WFH needs to be part of a holistic strategy aimed at staff wellness and engagement, rather than an attempt to cover other issues”.

 A concern for many managers today, though, is simply defining what flexibility is and what it should mean for staff on the ground.

A paradigm shift

Before the pandemic, flexibility, Mears noted, was “much more narrowly defined”, often limited to part-time hours or slight tweaks to start and finish times.

“While most corporates stated they were flexible, the reality is that many were not. The level of flexibility extended to employees largely depended on the role someone did and their seniority within the business.”

Extensive branding efforts by some of the larger financial services groups in pre-Covid times, painting themselves as industry advocates for flexible working, with “adverts of dad cheering along at their kids’ footy training sessions or individuals blissfully pursuing their hobbies” was a far cry from the reality on the ground, according to Brown.

“Ultimately, an organisation’s [flexible working] policy was only as effective as the manager responsible for its implementation. If a manager didn’t buy into flexible working, flexibility was either not an option, or offered begrudgingly.”

This ultimately led to “a huge amount of inconsistency [in flexible working allowances], even within organisations”.

The Covid lockdowns have not only forced a reappraisal of attitudes to flexible working but have also driven “a significant paradigm shift” that has enabled managers who were anti-WFH, or at least on the fence about it, first-hand experience of its benefits.

“We’ve blown up the old models – and we are in the process of building new ones,” Brown said.

“There are a lot of people watching and waiting to see and follow what works and understand what doesn’t.”

Moving forward into the unknowns of the post-pandemic world, Brown urged business leaders “to have belief in what’s worked really well during Covid and allow the organisation and its people to own the changes and own the outcomes”.

“If you don’t, another business will and you’ll risk losing your people”.

Profusion Group delivers executive search, permanent and contract recruitment to the country’s leading superannuation funds, investment managers, insurers, banks, lenders, fintech’s, wealth managers and platforms.

Profusion partnered with the 2021 Future of Financial Services, Sydney event – available on-demand for the month of November. Register your access here to catch up on all featured keynotes and content.