Will hybrid working be a turning point for diversity and inclusion?

Different sectors have embraced it to varying degrees and at different paces. Many businesses began to develop their approach following the Women & Work commission paper titled ‘Shaping a Fairer Future’, presented by Baroness Prosser in February 2006 - over 15 years ago now.

Yet despite the incredible ability of the financial services sector to adapt and innovate to meet the needs of varied markets, it lags behind other sectors on this issue.

At the launch of the HM Treasury Women in Finance Charter Annual Review back in March, the FCA’s CEO Nikhil Rathi had to focus our minds once again.

He noted that the regulator will increasingly be asking tough questions of firms about representation across grades and whether their culture is open and inclusive, providing a safe space for colleagues at all levels. 

Post-Covid behaviour

As we look towards the end of the pandemic, there are emerging opportunities for businesses to change the way they approach EDI. 

Working parents might revel in their newfound ability to fit the school run in around work commitments. New starters, on the other hand, may well prefer the social and training opportunities the office environment provides. 

On the whole the financial services sector coped remarkably well with widespread homeworking brought about by the Covid-19 pandemic, and it seems many are happy to embrace this new way of working for good.

A recent BBC report revealed 43 of the UK’s 50 biggest employers are planning to push ahead with a ‘hybrid’ model post-pandemic, mixing homeworking with office attendance. Many are even seeking to downsize their office spaces as a result.

Naturally, there are many employers who remain reluctant, often citing issues like stalling innovation and creativity. But does a hybrid approach, with its inherent flexibility, offer an opportunity for financial services businesses to solve some of the EDI challenges they’ve been grappling with? 

As always, the answer is more complex than a simple ‘yes’ or ‘no’. 

Rethinking representation post-lockdown

In some parts of the engineering sector you cannot bid for government contracts if you are not able to demonstrate an appropriate approach to EDI, and how it is embedded into your business.

Was Rathi signalling something similar for financial services?

Quite possibly, if the sector doesn’t start making significant progress. But this renewed focus is hardly surprising given we have just endured a pandemic that has disproportionately impacted women and people of colour. 

As we look towards the end of the pandemic, there are emerging opportunities for businesses to change the way they approach equality, diversity and inclusion

Research suggests that it was women who took on the bulk of childcare duties during lockdown, despite both parents working from home. 

Not only that, statistics have shown that a startling number of women felt the realities of the crisis forced them to put their career ambitions on hold entirely.

According to a recent McKinsey report, 23 per cent of women were considering leaving the workforce during lockdown in order to dedicate their time to childcare and home-schooling duties, versus just 13 per cent of men. 

When you combine this with the global conversation surrounding equitable treatment brought about by the murder of George Floyd and the ensuing Black Lives Matter protests, it only seems wise that the regulator is ramping up its efforts – as well as increasingly looking inwards to assess its own role in addressing inequalities within the financial industry. 

Same storm, different boats

We saw the stark disparity in homeworking arrangements during the height of the pandemic.

The graduate working from a cramped bedroom in shared accommodation versus executives with comfortable home offices.

That issue will not disappear as the sector moves away from full-time remote work and towards a hybrid approach.

Working parents might revel in their newfound ability to fit the school run in around work commitments. New starters, on the other hand, may well prefer the social and training opportunities the office environment provides. 

Businesses will need to address these realities in their reopening plans. Ultimately, a flexible approach that offers the same access and opportunities to all is required if a firm is keen to create a truly open and inclusive culture and promote diversity of thought. 

Embracing opportunities

This approach is not a purely altruistic one.

Hybrid working also opens up numerous opportunities for businesses seeking new talent.

As an obvious example, removing the need to commute five days a week may well attract applications from other areas of the country, or could encourage skilled workers back into the workforce – meaning a larger talent pool and more varied skillsets for businesses to choose from. 

We saw the stark disparity in homeworking arrangements during the height of the pandemic.

There’s also the well-worn argument that increased diversity and inclusion, particularly at board level, has a direct and positive impact on commercial performance – often hailed as a clear business case for investing in EDI.

This is generally put down to the fact that greater diversity reduces stale groupthink and allows for more robust challenge, leading to better decision-making. 

While the tangibility of the link between diversity and profit is disputed in some academic circles, it is certainly true that there is a strong social case for EDI regardless of the commercial benefits.

Providing greater opportunities for all is the right thing to do, and clients and employees alike increasingly have certain expectations of the firms they do business with – and will often vote with their feet if those are not met. Businesses lagging behind do risk being left at a competitive disadvantage. 

It is important to remember that workforce diversity shouldn’t end with representation of immutable characteristics like ethnicity and sexual orientation.

It is about valuing a variety of lived experiences, including things like geographical location and educational background, and ensuring those assorted voices are both represented and properly heard in the workplace.

Ultimately, considering all these ensures that different strengths and points of view are brought to the table, enabling an inclusive and safe culture – something the FCA deems increasingly important for an effective and robust financial sector.

Business leaders should take hybrid working as an opportunity to consider what they can do to create an environment, and company culture, that brings out the best in their workforce. 

Olivia Fahy is head of culture at compliance consultancy TCC