At PRI, we spend our days helping financial institutions look at every aspect of their businesses to determine where they can improve their processes, which leads to enhanced culture and employee engagement. There are many avenues of attack we can take that lead to improved efficiency and increased profitability, which is our ultimate goal. As we work with a variety of institutions across the country, we gather best practices, including what has worked and hasn’t worked on the journey to a more fit and successful organization. Sometimes this even means noticing attributes of an organization that don’t have a direct tie to profitability. Typically, our blogs share insights to improved efficiency and profitability, but we’ve decided that these other aspects need to be shared, too! This blog series will share the wealth of information about things that other institutions are doing differently—breaking the mold, so to speak—so you can see what may work well in your FI.
The first issue we’re going to tackle is remote work. For this blog, we spoke with executives from Civista Bancshares, Inc. in Sandusky, Ohio; Farmers & Merchants State Bank in Archbold, Ohio; and Hearthside Bank in Middlesboro, Kentucky.
When the pandemic sent the country into lockdown in the spring of 2020, businesses were thrust into an environment that required out-of-the-box thinking and quick solutions to protect employees while continuing to serve customers. Financial institutions were essential businesses that had to stay open to allow the country to continue to function. At FIs, remote work quickly morphed from an occasional possibility for a select number of roles to a necessity to keep the doors open and the economic system functioning. It has now become a feature of the modern workplace that seems here to stay.
The McKinsey & Company research report, Americans are Embracing Flexible Work—and They Want More of It, shows that 58% of Americans have the opportunity to work from home at least one day a week and 35% of respondents have the option to work from home five days a week. These numbers come from respondents in all kinds of jobs including those traditionally labeled “blue collar,” in every part of the country and sector of the economy.
“Another of the survey’s revelations: when people have the chance to work flexibly, 87% of them take it. This dynamic is widespread across demographics, occupations, and geographies. The flexible working world was born of a frenzied reaction to a sudden crisis but has remained as a desirable job feature for millions. This represents a tectonic shift in where, when, and how Americans want to work and are working.” – McKinsey & Company
So, what did FIs specifically learn from the necessity for sending employees home to work? How did they meet the needs of employees and customers? What worked, what didn’t and what lessons are they taking into the next phase of their businesses?
Rich Dutton, Executive Vice President at Civista Bancshares, Inc. in Sandusky, Ohio, said that hardly anyone in their organization was fully remote prior to the pandemic. While they had been investigating Zoom in late 2019 as a way to facilitate meetings with far-flung board members, working remotely was an option only available on a case-by-case basis. However, when the pandemic began, that option needed to be opened to everyone who was not strictly customer-facing. Suddenly, remote work was a lifeline to the organization.
“Fortunately, we were reasonably prepared with videoconferencing capabilities, and we worked quickly to get additional laptops and high quality, secure IT set-ups for people,” Dutton said. “In three to four weeks, 80 percent of employees were working remotely, and we had protocols in place for customer-facing roles that had to be in person at the branches.”
As remote work evolved at Civista, it became necessary to establish guidelines around it to help employees manage everything from the large deluge of work accompanying PPP loans to the expectation of having cameras on during meetings.
After the worst of the pandemic passed, Civista began to assess how they wanted to continue to incorporate remote work.
“The toothpaste was out of the tube,” Dutton said. “It was clear we weren’t suddenly going to go back to how it was before, but we did see some issues that needed to be addressed.”
The biggest challenge in Dutton’s mind was the difficulty of keeping employees connected to each other and the community and training new colleagues. He said Civista has worked hard to get people back together and continues to encourage an atmosphere of belonging at work. As another important retention tool, they leveled up compensation to ensure they were competitive in their markets.
Civista began to encourage employees to come back into the office, and they intentionally planned events to rekindle the feeling of community at work. In October, Civista planned a day of learning at the zoo with their 500 employees. Some who worked together remotely every day hadn’t seen each other in person in two years and were pleased to reconnect.
“Some working from home is good. You get that uninterrupted productivity, but you do miss the conversations in the hallway,” Dutton said. “We remain very flexible, and we’re not as concerned about where the work gets done as long as it’s accomplished. But I wouldn’t assume people don’t want to come back into the office. Belonging and connection is a valuable retention element, and we’ve found people asking to come back.”
The Forbes article Don’t Forget the Downsides of Remote Work, confirms that working from home can be isolating and robs people of their workplace connections.
“It can often be a lonely or isolating experience to work from home as many feel disconnected from the office culture, losing out on those all-important coffee break chats and building relationships with colleagues. In addition, remote workers often work longer hours, sometimes feeling they need to prove their worth and productivity. Regular welfare meetings and catch-ups are vital when you manage a remote workforce to avoid people feeling isolated and cut off.” —Forbes
Dutton said about 15% of their workforce, primarily credit, business solutions and IT roles remain remote. By mid-summer, the list of remote workers will be short. He said that for those employees who remain remote, it’s important to thoughtfully communicate expectations, check in periodically and find ways to nurture their connection with the rest of the organization.
Peggy Cobbs, CIO/COO of Hearthside Bank in Middlesboro, Kentucky
Peggy Cobbs has worked remotely as the CIO/COO of Hearthside Bank in Middlesboro, Kentucky, since 2007, so the concept was not at all foreign to her when the pandemic hit. She says that for her, the key to successful remote work is excellent staff and frequent communication. Since the pandemic, some employees have continued to work remote, and some employees have the ability to work remote in case of a disaster or emergency.
Cobbs says that remote work is only a small piece of the equation, however, when it comes to retaining employees. Hearthside focuses on supporting their employees and treating them well, which includes a strong emphasis on family, competitive benefits packages and compensation that outpaces their peer group. They also offer lengthier training sessions for new hires that include exposure to the culture of the bank and what it means to be a member of the Hearthside team.
Making remote work successful takes effort by both the employees and their leaders. Leaders must make an intentional effort to communicate frequently and include their remote employees in what’s going on at the office. She said employees who are good candidates for working remotely don’t need to be micromanaged. They are disciplined but with healthy work boundaries.
Don’t Forget the Downsides of Remote Work warns that blurring the lines between home and work can make it difficult for people to set boundaries and switch off, which can lead to stress and other health problems.
“One study found that 41% of remote workers felt stressed compared to only 25% of those who continued to work in the office. Of the same group, 42% had trouble sleeping, while only 29% of office workers reported the same.” — Forbes
Cobbs said Hearthside does not have formal rules around remote work, but rather chooses to allow it on a case-by-case basis, managed by its team leaders.
“Technology has come a long way since 2007,” Cobbs said. “During the pandemic, we proved it could work, and it did work.”
Alexis Smith, Chief People Officer at Farmers & Merchants State Bank in Archbold, Ohio
Alexis Smith joined Farmers & Merchants State Bank in Archbold, Ohio, at an auspicious time: Her first day at the Bank was March 2, 2020. She immediately began writing policy for remote work to respond to the pandemic. At the time, very few if any employees worked 100% remotely and most everyone lived in the communities where they worked.
Right off the bat, F&M sent one-third of its workforce home to work with laptops. Smith helped establish protocols for the rest of its customer-facing employees who needed to stay in person, which included staggered work schedules and drive-through-only banking.
She said F&M did not see a loss of productivity during the pandemic – in fact, they experienced record years in 2020 and 2021 – but it did lose some sense of community and connection.
“We were winging it, but we cobbled together a virtual community,” Smith said. “Everyone was understanding, and we did whatever we needed to in order to serve our customers. But when people started coming back from the pandemic, our employees needed established processes and way to connect when remote. If we were going to have a permanent flex remote environment, we needed to do it right and put structures in place to make it successful.”
Smith said F&M’s goal shifted from simply being functional as a business to creating a positive experience for their employees.
“We could’ve said everybody must come back, but we’ve chosen not to do that,” Smith said. “We have brought a lot of people back into the office, but we’ve also established the ability for about 40 to 50 percent of employees to continue to work some form of flex remote. Trends were moving toward flex remote even before the pandemic. When it became a necessity and people could see that employees were still productive and the company was still successful, you really needed a solid reason why you wanted to bring everyone back 100 percent.”
Smith said for her organization, the challenges around remote work are all about community and connection, not productivity. Her team has worked on ways to provide connection by beefing up their communication via social channels, having coinciding days in the office and offering opportunities outside of work to meet face-to-face.
She said one of the substantial benefits to flex remote has been the ability to expand F&M’s recruiting reach and talent pool exponentially. She also can use it to retain the organization’s investment in good talent. For example, if an employee is relocating with a spouse, the organization can retain the employee by using a flex remote arrangement, which may not have been available before the pandemic. She said it also allows her to hire not just geographically diverse people, but different kinds of people in general. It also allows F&M to promote from within, breaking down barriers and perceptions that the greatest emphasis is on the headquarters in Archbold.
“Not every position lends itself to being remote,” Smith said. “Similarly, not every employee is successful working remote. We have established a remote work policy with guidelines about childcare, wifi capabilities, communication expectations and workday availability. We also have worked to establish performance metrics throughout the organization.”
Smith said that the managers of remote employees need to adjust to a new style of leadership. Remote work puts more onus on leaders to understand what their teams are supposed to be accomplishing and staying on top of timelines. It’s more work for leaders to stay engaged with remote employees, and F&M is developing remote leadership training to help with this transition.
Smith said working from home is not for everyone, and many employees were eager to come back into the office. They missed the sense of community and the relationship building, especially new hires.
“Those are the things that retain people and build commitment to the organization,” Smith said. “If you don’t see the mission of the organization in action, how can you connect to it? For that reason, I don’t think we’ll ever be 100 percent remote. But flex remote is here to stay. Work-life balance is so critical and important. In fact, the ability to have greater control over their time is often more valuable to people than comps and benefits.”
The bottom line of these discussions about remote work? It’s here to stay. And just like its name, “flexible” is the name of the game. Financial institutions must structure remote work in a way that best serves employees and customers, addressing it with an eye to improving the experiences of all.
Don’t Forget the Downsides of Remote Work, Forbes
What’s the Future of Remote Work in 2023? Forbes
Americans are Embracing Flexible Work and They Want More of It, McKinsey & Company
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