, Hong Kong

Why the hybrid work model is here to stay for banks

Banks stand to lose on cost savings and even on attracting talent if they stubbornly push for the return of pre-pandemic work set-up.

Banks could no longer kid themselves that having all their staff work from an office is the right work set-up moving forward. Whilst offices will always be a mainstay of the working life, the pandemic has proven that working remotely does not necessarily hit employees’ productivity—and it would be more damaging for leaders to insist otherwise.

“Office life, along with the “old” ways of working and workplace setting, has not completely changed, but will also never return to the way it was pre-COVID-19,” said Paul MacAndrew, country manager for office services company IWG in Singapore and Hong Kong. “Instead, at IWG, we believe that the future of work is the hybrid office.”

The pandemic has helped shift the way all companies, including banks, see working and office use, MacAndrew told Asian Banking & Finance in an interview. Not only did it spark a revolution in the work-from-home (WFH) initiative, it also brought about a radical change in employee behaviour and mindsets – a trend that will have a long-lasting and profound impact in the way we work from now onwards, even after the pandemic is over, he noted.

But some banking leaders remained tethered to the pre-pandemic way of working, with several global banking leaders publicly sharing return-to-office plans over the past few months. JP Morgan CEO Jamie Damon had been widely reported to harbour a form of antagonism against work from home, commenting in a media-sponsored conference in May that “it doesn’t work for those who want to hustle. It doesn't work for spontaneous idea generation. It doesn't work for culture.”

He’s not alone in this regard. During a conference in February, Goldman Sachs chief David Solomon called the work from home an “aberration,” treating it as though it’s a mistake to be corrected, and insisting that it is not the new normal. Like Damon, Solomon said that work from home is against the investment banking giant’s culture.

In North America, 80% of 400 banking leaders said that they want employees to remain working in the office 4-5 days a week, according to a survey by Accenture. They reportedly claim that remote working is “hurting company culture” and is making it harder to train new hires.

The problem is, the vast majority of the workforce or those who belong in the middle—employees who are neither senior executives in their offices, or newbies yearning for more guidance to learn the tools of the trade—want to stay working at home, according to Accenture.

Staff could not really be blamed if they prefer a hybrid set-up: it means being able to better balance work-life priorities, have greater control over their daily schedules, and cut down on commuting time and costs, MacAndrew said.

“After over a year of working from home – which has seen multiple benefits including greater control over their daily schedules, cutting down on commute times and costs, having to adhere to a mandated return to the office may be seen as a less desirable arrangement,” he warned.

Companies who fail to adapt may find themselves losing out in the war on talent. IWG’s recent research found that in the long term, six in 10 office workers would like the office to be closer to home, and 77% consider a conveniently located office as a must-have for their next job move.

EY’s latest work survey also found that more than half (54%) of employees in APAC are likely to quit their current role post-pandemic if they are not offered continued flexibility in where and when they work. Although currently limited by the pandemic, movement of talent can still be seen.

“Different discussions are now taking place around the attractiveness of companies based on how they responded to the pandemic. Flexibility is a factor that many jobseekers would not have considered a couple of years ago, but it is now an important element for talent when seeking new roles,” EY noted.

The same survey showed that if given a choice between flexibility in work location and work hours, 87% of employees in the Asia-Pacific prefer flexibility in when they work, whilst 88% would like flexibility in where they work.

Employers must listen to their workforce and consider the satisfaction levels and well-being of their employees before pushing for such an arrangement – or risk being perceived as backward and oblivious to the current state of work in the eyes of existing and potential employees, MacAndrew added.

‘Hub-and-spoke’ model
In order to not lose out in the talent wars, banks and financial firms should consider adopting a hybrid ‘hub-and-spoke’ work model, where flexible working arrangements are incorporated into the structure.

Flexible work isn’t new to banks and the financial industry. Even before the pandemic, the idea of flexible work has long been in the works even before the onset of the pandemic given the growing need to work across time zones. The pandemic has simply accelerated this trend, MacAndrew said.

Asian businesses are already ahead in this trend. IWG’s Asia Occupier Flash Poll also found that 84% of businesses plan to increase their investment in technology in order to support remote working and business continuity planning going forward – signalling that flexible work arrangements will continue to stay for the foreseeable future.

As an example, Citibank Hong Kong plans to adopt three new models of working for when it becomes safe for everyone to work together once more: hybrid, resident, and remote.

Speaking to Asian Banking & Finance, Citi spokesperson James Griffiths said that post-pandemic, the majority of global roles in the bank will be designated as “hybrid.”

“The majority of roles globally will be designated as Hybrid.These colleagues will work in the office at least three days per week and from home up to two days per week,” Griffiths said. “This is not just a scheduling exercise; we will be thoughtful about when we ask colleagues to be in the office together, using four principles: belonging, collaboration, apprenticeship and learning, competitive and performance.”

Roles who cannot be performed offsite—branch-based roles or those who work at data centres—will be designated resident, whilst the bank will also make remote working available to roles who can be done outside a Citi location. However, apart from roles that were already remote before the pandemic, Griffiths said that new remote roles will be somewhat rare.

Citi will have three work set-ups post-pandemic: hybrid, remote, and resident (Photo: Citibank)

Citi will have three work set-ups post-pandemic: hybrid, remote, and resident (Photo: Citibank)

IWG themselves are part of the movement. The office services firm recently signed an agreement with global bank Standard Chartered to offer flexible work options to all of its employees over three years—enabling its employees to just drop in and work at IWG’s locations at any given period.

The bank’s transition to a hybrid model of working is also well underway, with recent announcements reporting that its senior staff have been clearing out their offices to make way for meeting rooms to be set in its place, IWG’s MacAndrew shared.

It’s not just Citi and Standard Chartered. Other banks and businesses in Asia are expected to join the remote working trend soon, particularly in financial hubs Singapore and Hong Kong. IWG is anticipating an increase in demand and enquiries for office spaces in locations outside of the traditional Central Business District (CBD) in Singapore.

For instance, the demand for locations such as Tampines, Jurong and Paya Lebar in Singapore have remained strong during the pandemic as compared to workspaces in the CBD, MacAndrew shared.

In Hong Kong, demand for workspaces in Hong Kong’s cost-effective, yet well-connected sub-markets such as Kowloon East, Mong Kok and Tsim Sha Tsui have remained resilient as well in the past year, he said.

Cost savings
Banks who snub the hybrid work model don’t just miss out on possible talent—they are also snubbing the potential to save on costs.

A study reported by EY has found that companies can save as much as a whopping US$11,000 for each employee that works in a hybrid manner. Going by this number, a bank with 50,000 employees that has 20% of their workforce working in a hybrid manner could save as much as US$100m in costs a year.

Apart from that, having their employees work in a hybrid set-up will enable businesses to rapidly flex up and down in terms of the office space they use, therefore resulting in fewer issues during difficult, busy moments.

“We note that businesses that take on a fully-equipped workspace often record a significant reduction in their property costs – allowing for more capital to invest in generating stakeholder value,” MacAndrew said.

Header photo courtesy of Basile Morin (Wikimedia Commons)

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