The new world of work

Companies are learning what it takes to manage the move to working from home, reports Tamsyn Parker

Nine months ago, AMP boss Blair Vernon vowed to scrap its central city offices and move to a permanent working-from-home model, with a site in the outer suburbs reserved mainly for meetings.

That hasn’t quite gone to plan, but the company has subleased two of its three Auckland CBD office floors and most staff now come in just one or two days a week – including Vernon.

He says some workers still come to the office five days a week – mainly younger people in flatting situations or those with young children at home – but most are happy to work from home (WFH).

“Some days we only have between 5 and 10 per cent of our workforce in the office, so it’s extraordinarily low.

“The release of two-thirds of our space, which is actually more than we anticipated . . . that we would release, is quite doable now because people just aren’t going to return on anything like what we anticipated.”

While workers in many countries have been forced to keep on working from home, Kiwis have had more choice. Rather than rushing back, many office workers initially took time to be convinced to return to the traditional workplace. Now, instead of working five days a week in the same building, many have moved to a hybrid model, with some days in the office and others at home.

John Kensington, head of financial services at KPMG, noted in a recent report on the banking sector that New

Zealanders have been fortunate in being able to choose whether to return to the office.

“In many parts of the world people have been working remotely since March 2020, with no clear return to the office in sight.

“We have the luxury of being able to decide what works best for our businesses, our customers and ourselves and apply it accordingly.”

Before Covid-19, working from home was seen largely as a benefit used by working mothers, to help balance their caring responsibilities and encourage them back into the workforce.

But Kensington said that as businesses have gone back to normal, all the major banks reported an increase in the number of people wanting to work remotely for at least part of the week.

“Following the events of 2020, it seems that the hybrid working week or 3-2-2 structure of three days in the office, two days at home and two days off is gaining popularity.

“While initially seen as primarily a diversity and inclusion offering, flexible working has become mainstream over the past 12 months. Organisations that were reluctant to introduce it have now seen that it is possible for large parts of their workforce to work more flexibly, including remotely, and that it is a critical part of the employee value proposition.”

For workers the benefits are obvious: saving time and cost on commuting, work clothes, coffees and lunches. One banking team estimates that working from home could save $9000 a year per person.

Some businesses, such as AMP and Vodafone, have also used the change as a way to cut down on expensive office space. Meanwhile, the banks have cut branch numbers as more customers have shifted online.

ASB closed 23 branches last month on top of the nine it didn’t reopen after the first Covid-19 lockdown in March last year. The BNZ closed eight branches last year and has said it will close a further 30 this year.

Last week, Kiwibank proposed closing seven branches. In the past, branch closures have signalled redundancies, but the shift to working from home has opened the door for bank staff to keep their jobs, serving call centres or customers from anywhere in the country.

But the shift to more WFH does not come without challenges.

Initial concerns focused on potentially lower productivity, but the first lockdown showed that in many cases that fear did not eventuate.

Now there are worries about how to maintain company culture and how managers look after teams who are no longer sitting close together. Video technology has stepped up to fill some of the gap, but has also sparked new terms such as “Zoom fatigue”, as workers exhaust themselves with multiple video conversations.

Kiwibank chief executive Steve Jurkovich says there are a different set of challenges with more people working from home.

“If you are in the office we can – for health and safety – we can make sure we can keep an eye on things, we can look for potential hazards.

“People operating from home, you are relying on them to take photographs and show you the environment they are operating in.”

Jurkovich says another issue is people overworking and finding it hard to shut off and separate work from home.

“It’s sometimes harder to remember to switch off rather than leaving the office and thinking ‘okay, now is home time’, there are elements of that.” Jurkovich says many workers also enjoy the social side of being in the office.

“For all the flexibility, I think we are still pretty social creatures, we like the idea of talking to people and seeing people and catching up. Every business I speak to is learning and growing about how you make that work properly and well.” And, he says, the new way of working means managers have to lead in a different way.

“Lots of us have grown up into these roles and being able to rely on management by walking around and talking to people and getting a feel for the vibe, that is way harder online.”

Kiwibank has developed a flexible working guideline and a work from home training scheme, which all staff who take that option have to complete.

Jurkovich says top tips for its leaders include communicating regularly and clearly, including meetings at the start and end of the week to set and close off priorities and establish clear expectations and responsibilities.

Managers are also urged to address any performance issues quickly, model what they expect to see and practice active listening.

“Leaders are expected to work with their teams to develop clear expectations – defining the purpose of roles and setting areas of focus and priorities so that everyone understands what success looks like.

“However, we understand that working remotely adds a new element to many roles. Things like time management, collaboration and meeting etiquette all look a little different in a working from home environment, and whilst many people thrive and adjust to working remotely, others may not, and if this is the case Kiwibank leaders can request individuals return to the office.”

Some companies are managing the hybrid home/office model by requiring teams to come in on the same day.

AMP’S Vernon says that rather than a top-down prescriptive approach, it is leaving it up to individual teams to work out what works best for them.

“I’ve found people are more than able to figure that out for themselves; it doesn’t need managerial calories burned on orchestrating that.” But

Some days we only have between 5 and 10 per cent of our workforce in the office. Blair Vernon, AMP

there is a need for cross-team events to maintain company culture.

“What we are finding is that the boundaries – we now need to create activities that allow cross-team collaboration. We are building those around other reasons we will be in the office for community activities we might be involved in, [such as] recognition of Pride month, to create that cross-team dynamic – more from a social interaction and knowing people point of view.”

Vernon says he does not see productivity as an issue. “From my perspective that is about team leaders being clear about what are the work activities and goals and targets we have got and then you organise around that. If you don’t have a clear sense of what you are trying to do for your clients and your other stakeholders, then your physical setup at work isn’t going to solve that.”

He also dismisses worries about how new and young employees will learn on the job. “It is not the same as a workplace where you have to copy someone’s work – my son is an apprentice in a joinery factory, he is there to see how they operate the machinery.

“Ours is a completely different scenario. We don’t have that kind of requirement so actually the coaching of team members, if it’s about understanding our disclosure documents or the way we go about risk management, that is a conversation as opposed to a physical presence.” And, he says, those conversations can happen using video technology platforms like Zoom.

Vernon says the areas he has had to watch out for are managing practical health and safety issues.

“You have got to invest enough in kit so people can operate, but equally, you have got to balance that so if people have particular requirements that are better served by being in the office – if they need height-adjustable desks and they don’t have those at home – you have got to be able to make sure you provide that.” And he too worries about blurring the line between work and home life.

“One of things I am very mindful of as we look into 2021, as this becomes our standard way of work, rather than me spending time being anxious about productivity loss, what I am mindful of is the encroachment and demarcation between work and the rest of your life.

“I think that is as equal a challenge as managing productivity – managing productivity, performance and the occasional underperformance has always been a requirement whether you are physically located or not. I think things we have now got to watch for are do people have the capacity to balance and turn off?”

Vernon says one way he handles this is through a reminder on his email messages. “At the bottom of my email it highlights the fact we work flexibly and if I am sending my email to you at this time, it doesn’t mean I expect you to respond.” He also tries keep in mind how much email traffic and correspondence the business does outside typical working hours.

As with Covid itself, he says managers have had to learn a new language.

“Just like we have learned a new language through Covid – we didn’t used to talk about lockdown, alert levels 1, 2 and 3 – for leaders, a new part of their lexicon is having those kinds of conversations as part of their ongoing normal coaching. It is understanding how is that going? Where are you at? I think we are all learning news skills, new language and it extends not just from this but from having a new workplace.”

One worry he has about the hybrid situation is if workers all choose to work from home on Mondays and Fridays. “You don’t get much relief from your premise requirements because if they are all in Tuesday, Wednesday, Thursday, that is not flexible – that is just a different work week. And also that just squeezes things up.

“When I look at the literature internationally, I think this is a fundamental shift that was probably occurring before Covid but it is definitely baked in now and I think mastering the skills of it are really good skills to be able to master. The thing they require are leaders who show some flexibility, team members who take on accountability and responsibility for the way they work, and an ongoing conversation about goals and output expectation. So we have been focused on that rather than time on the job. I don’t think any of those are unattractive skills to master.”

Emma Kelly, head of human resources at Vodafone NZ, says it offered remote working before Covid.

“We have all got laptops with Sim cards so you can work wherever you want. On top of that we have got staff based in different locations around the country so managing remote teams is not new for our people leaders.”

Kelly says that was a major point of difference, as other organisations where she had worked had faced a radical shift when Covid hit.

“But Covid obviously accelerated digital adoption by up to about five years.”

She says that on top of the remote access tools, Vodafone had set up new tools to help leaders consider the impacts on people in lockdown.

“That is just reminders that people are juggling small children and home schooling and so the ways we would typically expect to do work, a normal office hours day might need to flex to accommodate the diverse needs of a workforce that is trying to juggle.”

Kelly, who has been at Vodafone for only six months, says one difference she has noticed is that every meeting has a Microsoft Teams meeting request in it, allowing people to join either digitally or physically. “You don’t need to ask for it. The expectation is that you attend the meeting, not where you attend the meeting from.”

She says that on average, staff came into the office two or three days a week, but it is left up to teams to work that out and it depends on the type of work they do. “My team has a preference to be in the office a lot because we are engaging with others in the company a lot.

“If you are doing independent work, just sitting at a desk in an office seems kind of pointless in some ways when you could be avoiding traffic congestion and sitting at home and having that time in the day to get exercise in and connect with your kids when they get home. That is the benefit to me – that flexibility and trust is given really freely.

“The culture is very much we look at outcomes rather than clocking in and clocking out. “I have worked in environments where that is not the case and it can be quite stressful.”

She doesn’t see working from home or the bach on a Friday as an issue.

“If you are lucky enough to be able to work from a bach then good on you. As long as you are contributing in a way that you would be if you were in the office or WFH – we have been promoting free-range working and people have really appreciated that.”

But she acknowledges not everyone sees WFH as a good thing. “Even large firms globally are polarised.”

Goldman Sachs chief executive David Solomon was recently quoted as saying working from home was “not a new normal” for the investment banking giant, describing it as an “aberration”.

Kelly says her personal view is that it is the people connection that matters.

“That doesn’t necessarily mean you need to connect in person. But it does mean you need to take the time to get to know someone, to understand things from their perspective to help inform the decisions you take.”

It’s sometimes harder to remember to switch off rather than leaving the office and thinking ‘okay, now is home time’. Steve Jurkovich, Kiwibank

Clare Bolingford is no stranger to banks behaving badly. She saw it up close in her home country the United Kingdom leading up to the Global Financial Crisis and from a distance watched the nightmare tales coming out of Australia’s Banking Royal Commission.

Now she has been charged with heading up a team to license and regulate New Zealand’s banks and insurers at the Financial Markets Authority to make sure our financial products are not ripping people off or being sold in an unfair way.

“You can have such a significant impact on somebody’s life if their financial product lets them down or if they are not treated properly by their financial services provider.

“But I have also seen how amazing it is when people can be supported through difficult times if they have the right products that suit them.”

Bolingford, who grew up in England’s Cotswolds, has spent most of her career in London with the UK’S Financial Conduct Authority.

Last year she emigrated to New Zealand with her Kiwi husband and two young children, landing in January, just a few months before the world went into a Covid-induced lockdown.

Unlike many at the FMA Bolingford does not come from a legal background. She studied politics at Warwick University before moving to London with the hopes of getting a job in the civil service.

“I had always been quite keen on the public sector side of things but I hadn’t made it for that year through the fast-track. I just got pipped at the post. I didn’t really have a plan B.”

Instead she signed on with a couple of temping agencies.

“The first place they sent me for a three-month stint was the FSA [Financial Services Authority which has since split into the Prudential Regulatory Authority and the Financial Conduct Authority].

“I didn’t even know what it was. They said: Can you get to Canary Wharf? And I was like ‘of course I can’. I got on a bus and got there and the rest is history.”

Bolingford got her first permanent job in the communications team before working her way up into a banking supervision role. Her last role there was head of cross-cutting policy and head of supervision for retail banking groups.

“The banking sector there is a lot bigger — you have got a lot more diversification in terms of what the banks do because pre-brexit the UK was the centre of capital markets activity.

“That was fascinating for me because the cultures within those global firms were quite different depending on which bit you went into. They are massive institutions.”

But it was the culture which also saw many get into trouble through the 2008 Global Financial Crisis.

“Culturally a lot of the seeds of the GFC were sown in poor behaviour and certainly in the aftermath. Under pressure people and organisations can behave worse than they would do in normal circumstances and . . . that is what we saw there. So we saw even more poor conduct coming out as firms were struggling to survive.”

She remembers one particular product which saw the regulator go head to head with the sector in a legal battle.

“Probably the worst miss-selling I saw was around payment protection insurance which is a bit like credit card repayment insurance.

“It was a big cash cow for [the banks] and so when we first started

. . . saying ‘we think there is missselling here’ they were very quick to say ‘nothing to see here’.”

When the regulator clamped down the banks took it to a judicial review. “They were fighting us all the way and actually ended up spending far more money fighting it rather than saying; ‘okay you think there is a problem here, what can we do to see whether we can resolve it’.”

Bolingford says one of the many core drivers of misconduct is that firms produce a product to sell — rather than producing a product for a need that people have.

“And if they are not careful about how they sell it and making sure the people who buy it are suitable . . . this is where some poor conduct is coming in. We don’t see that so much in New Zealand, it is more the control areas not picking up on these issues.”

That was the case with a recent finding against the ANZ in which the bank was fined $280,000 by the High Court for misleading hundreds of customers over credit card insurance policy breaches “hiding in plain view”.

The bank charged customers for credit card repayment insurance (CCRI) which offered no cover or benefit and issued duplicate policies between April 2014 and November 2019.

The breaches dated back to 1998 but were only reported to the FMA by the ANZ in June 2019.

Bolingford says at the moment the FMA is only able to intervene where firms have been deceptive or misleading in their conduct.

“However we would like to be much more proactive and make sure that we can intervene and indeed the firms themselves can have the right practices in place before something wrong occurs in the first place.”

A new law that enables this is part way through Parliament. The Financial Markets (Conduct of Institutions) Amendment Bill had its first reading in February last year and has been to the select committee but is still waiting to go through its second and third readings. Bolingford is hopeful of it being passed into law this year but is not sitting on her laurels in the meantime.

“We are already starting to think about our licensing approach and what that could look like. Although we haven’t got final legislation we have probably got enough to be working with and then we will tweak it if necessary.”

The legislation is part of the Government’s response to conduct and culture reviews carried out by the FMA and the Reserve Bank on New Zealand banks and life insurers in 2019 in the wake of Australia’s Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry.

The 2018 Royal Commission revealed cases of irresponsible lending, sales of inappropriate products, fees charged for advice not given and even fees being charged to dead people. It also found evidence of information being concealed from the regulators, and failures to rectify problems which have dragged on for years.

Kiwis looked across the ditch in worry given New Zealand’s four major banks are Australian owned, as are many of our major insurers and financial services companies, prompting some to call for our own Royal Commission.

Bolingford, who watched it unfold from the UK, says her biggest takeout was the scale of the systematic misconduct.

“It is quite shocking when you see it all laid out and . . . when you look at the firms and see the leadership team at the head of them, some of the decisions that were being made — you could see how that could spread through an organisation in a way that is very negative and results in some really bad outcomes. To have it right across the system in the way it was in Australia was quite shocking as well.”

The regulatory reviews of New Zealand’s banks and insurers did not find widespread issues but still plenty of room for improvement.

“What we found is there were weaknesses. And when there could have been issues the banks and insurers may not have been able to pick them up in time to actually deal with them and put things right.”

The banks and life insurers were given time to come up with action plans to remedy issues identified and Bolingford says some are still working through putting those in place.

“Conduct is not a fast thing to get right. It is a continual process. One of the things we are keen to make sure of is firms don’t think once my action plan is done I’m finished because they won’t be ready for the new regime if they think that is going to be enough.

“It is about embedding and continually reviewing that the outcomes are right for the customer.”

Bolingford says in the UK conduct regulation has been in place for some time and banks have got used to following a more principles-based approach.

“It is the spirit of the rules rather than the rules themselves that they are focusing on. And it is only when something goes wrong that you need to lean on the law.”

Bolingford says the big difference in New Zealand is banks and insurers want to talk about the law straight away with her.

“It is quite legalistic — they are like ‘show me where it says that’ — they want it to be prescriptive and exacting.

“The UK banks have been used to a principles-based regime and regulator for a lot longer. The debate was different as a result of that. You could go in and say; ‘well yes you are legally allowed to sell this product but it’s a really bad product for customers because you can’t really explain it.’

“And they would say ‘fair enough, we can see we need to do something about that’. Whereas here sometimes, and less the banks, but it is almost if you can legally do it then . . . why shouldn’t we.

“There needs to be a . . . mindset change with this new regime.”

So far Bolingford’s focus has been engaging with the industry to help build trust and get them used to the approach.

“When they have a new area they get nervous about what is coming and with a lot of lawyers their mind turns to enforcement first rather than what we want them to focus on, which is getting the controls and processes in place that is going to be of more value to the customer.

“Engaging with industry is a really important part of saying we want to set this up right and we want to deal with the pain points.

“[We want] the same outcome which is better business for you, better outcomes for the customer.”