Client Affairs

Firms' Bumpy Road To Hybrid Working

Jackie Bennion Deputy Editor 25 March 2021

Firms' Bumpy Road To Hybrid Working

Solid progress being made on vaccinations has given firms the green light to iron out their policies for returning workers and sustainable solutions for mix and match approaches. There are, however, vexing legal and logistical hurdles.

Firms are asking many questions of HR and legal teams to clear a path for returning workforces. The “contract” between employer and employee is a different beast from what it was a year ago. The genie of working from home is out of the bottle, but no easy instruction manual comes with a “hybrid” working model.

Those who have spoken to this news service say that if the transition to hybrid is managed poorly, businesses could face a litany of discrimination claims, unnecessary employment churn, and lose top talent when labour markets fully reopen.

Brian Kropp, head of human resources research at the Gartner research and advisory group in the US, said return to work policies for firms have largely fallen into three camps: those happy to remain remote-first; those adopting a hybrid model, and a third group pushing for the vast majority of people to be in the workplace most of the time.

“Financial service companies are dramatically more likely to fall into that third bucket, more so than any other industry,” he said.

Although reports show that remote workers have largely been as productive as those coming into offices over the past year, financial services have been aggressive in wanting people back, Kropp said. 

Unpacking why this is the case, the consultancy hears two things from executives: “One is financial security reasons, and the belief that working in a remote world is less safe, with IT risk, financial-theft risk, those sorts of factors,” Kropp said.

The second reason is "we must support our culture."

“The sector believes the way we work has to be in-person, because we are cutting deals, and you can’t cut deals over Zoom, you have to cut deals over steak. That mental belief of how we do work still matters,” Kropp said.

A concerted effort by firms to return a majority of staff depends on how fast countries are vaccinating.

Here, the US and the UK have cause for cheer.

Businesses both sides of the Atlantic have been grilling their legal teams about what they should be doing to determine whether employees have been vaccinated, and then whether they can legally refuse them entry to the workplace if they have not.

Overwhelmingly this is what firms are trying to figure out, Sinead Casey, partner in the employment and incentives team at global law firm Linklaters, said. But making vaccinations mandatory for returning workers is difficult to support, she said.

“Obviously the [UK] government hasn’t made it mandatory and some of the big public employees like the NHS haven’t made it mandatory, so it is quite challenging for private employers to insist on it.”

The problem with assessing anything at this point are the unknowns over the effects of various vaccines, such as on transmission, she said. "It is hard to quantify what the risk is of having one or two people who are not vaccinated on a floor with 20 people who are vaccinated, and how manageable this is with other COVID measures."

These aren’t back of the envelope decisions that firms can take lightly.

The pandemic has already caused a sharp rise in redundancies and dismissal claims. Government figures show that between October and December 2020, claims at tribunals were up by 25 per cent over the same period last year.

“We have already seen an increase in claims about working time, deductions from salaries, and redundancy,” Kim Crangle, associate at law firm Payne Hicks Beach said.

The firm is expecting more claims as the economic impact of lockdowns 2 and 3 and changes to the furlough schemes filter through.

Age discrimination claims are part of the backlog.

“It is not clear yet what age groups have brought the claims, but it may well be that young people most affected by job losses in the pandemic are the majority,” Crangle said.

The UK government's approach of putting younger people at the back of the line for jabs, is likely to penalise them even more professionally.

Studies have repeatedly shown that those in their twenties and thirties are the groups most looking forward to returning to a work environment.

“There is a whole mixture of reasons why mandates make it a very challenging approach,” Casey at Linklaters said. There is the "evidence that ethnic minority groups are less likely to voluntarily take the vaccine, and potentially other groups, pregnant women, people with disabilities, people who just don’t trust vaccines or a state-run vaccination programme,” she said.

But recent polling by the Chartered Management Institute suggests that managers are undeterred. The survey of 1,000 UK managers revealed that a majority believe that businesses should be able to make vaccinations compulsory for returning staff.

It also found a majority in favour of putting “no jab, no job” clauses into any new employment contract. Three-fifths have already decided to make testing available for their employees once they are allowed back.

"Managers have shown a significant level of support for mass testing and vaccinations. And widespread take-up would allow for a swift and safe return to work," CMI chief executive, Ann Francke, said.

Signalling the government's position, Justice Minister Robert Buckland said it would be lawful for businesses to insist on new starters being vaccinated as a condition of employment. Beyond that, official policy has been fuzzy and Boris Johnson has ordered a Cabinet review to look at the legal, ethical, equality issues and logistics of putting a vaccine certification programme in place.

Considering options
With the global picture for vaccinations uneven at best, finance firms with large footprints have begun considering private vaccination options.

Linklaters says it has taken more of these queries over the last few weeks.

“Although a private vaccination is not currently an option in the UK, some businesses are starting to think about if and, when it does become available, whether they will run their own vaccination programmes for employees,” Casey said.

But firms are treading cautiously, she said, and weighing reputational risk in the same terms as the blow back firms felt after taking government furlough funds.

“You want to balance safely protecting your people but you don’t want the potential reputational implications of vaccinating your 300 employees ahead of perhaps more vulnerable groups.”

There is no doubt that COVID-19 has put employment contracts and policies under severe strain.

"Contracts were not drafted with the current pandemic in mind, yet restrictions on how people work could continue for years,” Helen Crossland, partner at UK law firm Seddons, said.

“If employees are working at home, even temporarily, employers should issue a temporary homeworking policy dealing with information security, data protection and health and safety," she said. The same goes for disciplinary, grievance and performance management procedures to cover homeworking.

Also, the premium for working in central London may no longer be justified if workers are only commuting once or twice a week. Conversely, if employees are working from home and being provided equipment, their expenses policies should reflect that, she said.

As firms press ahead with phased returns, their return policy should cover health and safety issues, the vaccination programme, and lateral flow testing, Crossland said. All this could prove "troublesome if not handled correctly” and cause constructive dismissal claims if employees are unwilling to consent to the proposed changes, she said.

Lots to talk about
Casey at Linklater says "a lot of individual discussions and negotiations lie ahead" as to what employees working arrangements will be.

It is already statutory in the UK to request flexible working, but prior to the pandemic this was largely about part-time working, she said. "Now it is more about, ‘I want to work in an agile way because I prefer my location to be at home.’"

Fiona Mendel, associate at Seddons, says most businesses accept that the purpose of the workplace has changed, and workers will be disappointed if agile working does not become the norm once lockdowns ease. "The function of the office will likely shift from ‘head-down’ work, which can mostly be done at home, to a more collaborative space where teams can meet, share ideas and have human contact," she said. However, "organisations will want to set a benchmark for how frequently employees are expected to be present."

In Kropp’s view where managers might be misplacing what they have learned over the last 12 months is putting too much emphasis on productivity. The question businesses should to be asking is ‘How do you build social and emotional connections between employees given that they are not going to be coming into the work place to the degree they were before. Where the cultural implications are, ‘I feel like I just happen to be working among other people rather than, ‘This is my team’," he said.

These connections don’t necessarily drive performance but they do drive retention, he said.

“When you talk to financial services executives, they are very focused on the rational parts of the job, the financial rewards, the pay, the prestige – and they matter – but these other social and emotional components are alive as well,” he said.

For younger talent, especially, work is where their social network exists. “It’s where their friends are, those they go to Happy Hour with are; it’s where they date, let’s be honest.”

Gartner has also advised firms to look at their employees by catergory as they navigate staff returning as economies pick up. Look at those with unique and transferable skills within the sector, wealth managers and traders, for example, and those with transferable skills across sectors, such as those with in-demand technology skills, who may well jump ship as soon as the labour market opens up.

“Our data shows that one in four people defined by the company as high-potential are wanting to leave because they have worked hard for the last 12 months but haven’t seen the same career progression, with few places to go. But as places open up, that will change,” he said.

Jobs data from Morgan McKinley shows that City of London vacancies dropped by 36 per cent in 2020, with 30 per cent fewer job seekers because of the pandemic.

Where growth has remained strong managing director Hakan Enver says "is in IT, marketing, and digital roles."

Kropp at Gartner also raises what the last year has done for the professional fortunes of women.

The US in particular has pegged them as crucial to the economic recovery but women have dropped out of the labour market disproportionately compared with their male colleagues in the last year.

“Even if they all come back, the fact they have a year-plus gap on their CV suggests that they won’t be on the same trajectory as before,” Kropp said.

Women are also more likely to lose out on promotion as companies pivot to more permanent remote working as another consideration for firms trying to address equity.

Gartner research found that 75 per cent of hiring managers are more likely to promote those who are office-facing, seeing them as higher-performing. Equally, research shows that men are much more inclined and interested in working from the office than women, who prefer to continue working from home.

“It’s another reason, sadly, why women will become more career disadvantaged because of the lingering impacts of the pandemic.”

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