Prolonged working from home could reinforce exclusive behaviors and biases and undermine inclusive workplace cultures, which experts warn could have long-term implications for organizations that do not pay attention to the risks.
Lockdown measures in response to the coronavirus radically changed the way bankers work, and the timeline for a complete return to normal is uncertain. Royal Bank of Scotland Group PLC has said it will keep more than 50,000 staff at home at least until September, while Citigroup Inc., Goldman Sachs Group Inc., HSBC Holdings PLC, JPMorgan Chase & Co. and Morgan Stanley have told employees their current remote working arrangements will remain in place for the foreseeable future.
That poses a growing risk to workplace culture. Consultancy McKinsey & Co.'s research into home working in China during the crisis has shown that "noninclusive dynamics" have been amplified, while Behavox — an artificial intelligence company that helps investment banks and money managers monitor staff communication — has recorded a rise in inappropriate language and signs of a "bro culture" returning among some clients.
These trends come not only with a huge reputational risk, but could also undermine an organization's responses to the COVID-19 crisis.
The formation of "in-groups" in which people connect with those similar to themselves is one major concern faced by financial institutions, according to London School of Economics research into the obstacles to virtual inclusion during the coronavirus crisis.
In-groups are more likely to appear during times of economic uncertainty and could have a "potentially detrimental impact on inclusion" as it can result in hoarding of information, exclusion from key conversations and affect who gets assigned to key projects, said Grace Lordan, an associate professor in behavioral science, in the research report.
The trend has already been observed at some financial services companies. Since the staff was made to work from home, Behavox has seen "a little bit more of a bro culture" appear in its monitoring of hedge funds, with employees, for example, being more selective in the people they invite for meetings, said Nabeel Ebrahim, chief revenue officer, who oversees the company's client portfolio.
Behavox has also observed a 15% rise in sexist and inappropriate language across two banking customers and one corporate customer in May.
"I don't get to see the delights in the morning," is one example given by Ebrahim of a message flagged by Behavox technology.
This is likely the result of staff being "more relaxed in their tonality" when at home, he said. "Stylistically, there's a lot more informal communication. That's just how people are speaking normally when they're at home, as opposed to surrounded by colleagues."
Companies that have had inclusion issues before the crisis could see such problems "significantly amplified" in a remote-work setting, said Sundiatu Dixon-Fyle, senior fellow at the McKinsey Global Institute, who focuses on diversity and inclusion.
"When you're working from home and you're in small groups, you are in a sort of twilight zone with respect to your company's culture and values. It could mean that there are micro pockets of behaviors that are protected from the company norms around inclusion by this sort of remote setup," she said.
No catch-ups at the coffee machine
Based on interviews with senior leaders at banks such as Citi, Goldman Sachs, HSBC, ING Groep NV, Standard Chartered PLC and UBS Group AG, Lordan's research identified a range of other potential inclusion obstacles faced by financial services companies while staff is working remotely during the crisis.
"Groupthink," a phenomenon in which people make irrational or nonoptimal decisions because of a desire for conformity, was a major challenge during the global financial crisis of 2008 and could be amplified in a virtual setting.
A decrease in social connectivity also causes lower levels of impromptu conversations that stimulate creative and innovative solutions, Lordan said.
As the pandemic started a new era of remote and flexible working, it spelled the end to traditional socializing, networking and other efforts that are important for building an inclusive work environment, Dixon-Fyle said. Lunches with colleagues, after-work drinks and spontaneous catch-ups by the coffee machine disappeared, while informal coaching sessions and activities of employee affinity groups were left to connect online.
Failing to recreate such events in an online setting can lead to "significant inclusion issues" and impact career advancement and development opportunities particularly for minority groups, she said.
"It requires quite a lot more outreach and proactive creation of the socializing and networking opportunities, whereas in an office setting they would just spontaneously happen," Dixon-Fyle said.
As companies focus on their survival during the crisis, inclusion initiatives are at risk of being forced down the priority list, she said.
A survey by the Chartered Institute of Personnel and Development in the U.K. among more than 1,100 employers in late April showed that just 5% of employers put diversity and inclusion in their top three HR priorities, compared to 14% before lockdown.
For those organizations that do attempt to recreate social events or networking sessions virtually, there is a heightened risk that certain groups will not take part, Dixon-Fyle said. Women are particularly vulnerable in the current situation, as they are more often than men burdened by domestic duties, including looking after children, while schools are closed.
Failing to address inclusion issues could be a problem for an organization's ability to recover from the current crisis, Dixon-Fyle said, adding that a diverse talent base is critical for companies to rebuild their business models and emerge stronger on the other side.
Being associated with an exclusive work environment also comes with a high reputational risk for an organization, particularly financial services companies that are still battling with a "bad rep for being old middle-aged white boys," Ebrahim said.
Among actions that banks can take to promote virtual inclusion, Lordan suggests auditing projects and networking opportunities to assess who is "missing out."
Videoconferencing is another way to "humanize interactions with colleagues," according to Lordan.
Organizations, however, need to be aware of how videoconferencing could contribute to exclusivity, Dixon-Fyle said, as it can expose social inequalities or force personnel to share aspects of their lives, for example, alternative family forms or lifestyles, they might not be comfortable revealing.
Most importantly, organizations should not deprioritize diversity and inclusion, but rather seek to take advantage of the opportunities provided by the current situation to win the war for talent, she said. For example, a shift toward remote working can help retain women and also open up access to a new array of talent that may not have been previously available to companies.