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Diversity may increase as pandemic lifts financial services' remote work stigma

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Diversity may increase as pandemic lifts financial services' remote work stigma

Attitudes toward remote working in financial services have changed as a result of the COVID-19 pandemic, and as banks plan for a more flexible working environment, they see an opportunity to increase diversity in their organizations.

Julius Bär Gruppe AG has managed to serve clients with 90% of staff working remotely during the crisis, the Swiss bank's CEO, Philipp Rickenbacher, said during its second-quarter earnings call. He spoke about fundamental changes to the way of working in wealth management and the wider financial services industry.

"We have all discovered ... that actually a proper balance of working from home and working centrally from the office can produce outstanding results. I do believe the flexibility we gain from that will allow us to bring more people into the workforce. It will help on the diversity side," he said.

Currently 80% of staff at UBS Group AG is working from home, and the world's largest wealth manager plans to keep 20% to 30% of staff working remotely in the future, CEO Sergio Ermotti said at the Swiss group's earnings presentation July 21. "Over time, the debate on working from home will become more of a bank's business as usual, rather than an exception or a crisis," Ermotti said. "We will also have the benefit of attracting different kinds of talent to our industry by offering more flexible work arrangements by location and by the way they physically interact with us," he added.

Permanent shift

The benefits of remote working have become apparent over the past few months, when doing so has been a necessity for many businesses.

Before the pandemic, the stigma attached to working from home in financial services prevented people from being promoted, getting a new job or finding any job for that matter, Stuart Paterson, a managing partner at London-based recruitment firm Hanover Search, said in an interview. "The single biggest impact of the crisis is that the power dynamic has changed on that front," he said.

The positive impact remote working has had on staff productivity and satisfaction during the pandemic has "quickly elevated working from home to a credible long-term option" for companies across industries and many are considering a permanent shift to remote working for some staff, consultancy Bain & Co. said in a July 2 report.

The trend is also apparent in traditionally relationship-based businesses such as financial advisory. "Many advisors are enjoying the higher productivity and the other benefits of remote work," Jodi Taylor, a vice-president of customer success at Xtiva Financial Systems Inc., said in an interview. Xtiva, which develops performance measurement system solutions for wealth managers and other financial firms across Canada and the U.S., has seen a notable shift towards remote working among its clients.

Apart from creating more flexibility for existing staff, the option to work remotely will allow organizations to broaden their scope when hiring new talent and consider candidates falling outside the typical geographical and employee profiles of their industries, global recruitment automation company Launchpad said in a recent post.

The need for diversity

Diversity and inclusion have been hot topics in financial services for years but women and ethnic minorities remain underrepresented, especially in senior management. The proportion of women on executive committees and on boards in financial services was 20% and 23%, respectively, Oliver Wyman said in its 2020 sector report.

"The most obvious beneficiary of the remote work environment are working moms. This is a massive opportunity and a game changer for them," Paterson said. It could also open a lot of doors for people with disabilities who usually face high physical barriers to working in an office, he said.

People with disabilities are also underrepresented in the workforce. A 2019 report by the Leonard Cheshire charity showed 73% of disabled people in the U.K. have stopped working. The U.S. Bureau of Labor Statistics found that 8 out of 10 disabled people were not part of the workforce in 2019, compared to 3 out of 10 people with no disability.

Remote working removes commuting, which is often challenging or impossible for people with disabilities. They can also take care of their medical needs much more easily while remaining productive, global employer review platform Glassdoor said.

Remote working can drive diversity and inclusion among ethnic minorities as well. Only 1 in 10 management jobs in U.K. financial services were held by black, Asian or other ethnic minorities, according to a 2018 report by global HR consultancy Randstad. According to the U.S. Government Accountability Office, the representation of ethnic minorities in financial services management was 22% in 2015.

"When looking at diversity practices, location is often left out of the equation, yet it can be a huge factor in reaching diverse talent and building a diverse workforce," Corean Canty, a Black female entrepreneur and COO of Goodway Group wrote in a July 9 post for Fast Company. "Even if these companies have robust diversity practices, life outside of work can be difficult for people of color," she said, noting that "many of the most desirable companies are in expensive, unaffordable markets and within areas with minimal diversity."