In the least surprising news ever, staff hate Lloyds’ return-to-office mandate

Lloyds Banking Group has joined the growing list of companies struggling to adapt to the remote working revolution, as an internal employee engagement survey reveals its return-to-work plans have negatively impacted staff satisfaction.

Last April, the leading financial services group told remote teams that they would have to work in the office for two days a week. Following the introduction of the return-to-office (RTO) policy, Lloyd’s 2023 employee index shows that satisfaction levels dropped by 12%.

During the group’s annual shareholder meeting, held in Glasgow this Thursday, chair Robin Budenberg referred to “the need to evolve in our ways of working, in order to enable us to serve our customers better” in defence of the survey results.

Return-to-office “inevitable” says Lloyds

Business leaders have made headlines this year for their various attempts to coax staff back into the office, due to concerns about how home working might affect productivity.

Their efforts range from polite requests, to raising pay for office workers, to coercing employees, as in the case of Dell Technologies.

Lloyds rolled out its own RTO plans last spring. Previously, working from home was available to employees at their manager’s discretion. But in April, teams were told the bank would start using card scanning technology to ensure they were meeting office attendance targets.

As a result, the group’s 2023 Annual Review reveals the employee engagement rate (which measures the percentage of staff who view the company favourably) fell to 66%, down from 78%. It specifically blames “changes to flexible work arrangements” for the decline.

In his speech on Thursday, Budenberg added: “we are of course mindful of the drop across some of our employee engagement metrics in 2023 – relating to some inevitable internal change, as part of our overall transformation.”

Growing resistance to Return-to-Office mandates

Lloyds is not the only brand struggling to implement its return-to-office orders. Also on the 2024 Bingo card of workplace turmoil is beauty retailer, Boots, which told administration teams they will need to attend the workplace for three days a week from September.

Meanwhile, WebMD’s parent company, Internet Brands, went viral for its dismal attempt at a back-to-the-office mandate, where it told staff: “we’re not asking, we’re telling.”

The trend is also evident throughout the finance sector. Banking giant HSBC unveiled similar plans last October, when it told staff to go back to the office for three days a week.

Reaction has been overwhelmingly negative. Last year, a survey found 64% of employees who had been told to give up fully-remote work were looking for a new job. 

Despite the repeated poor press, though, many large firms are still pushing on with the policy, fuelled by a belief that working in-office is better for business. 

Why employees want the right to WFH

For those who cannot work from home in their role, the reaction from workers might seem dramatic. Demand for remote work is such that many office-based employees are now prioritising it over a pay rise.

But for many, the benefits of flexible working are worth fighting for. Having a home desk has improved work-life balance by helping employees to skip the daily commute. For parents or those with care responsibilities, it’s a particular godsend.

It’s not surprising, then, that losing these privileges has had a negative impact on company culture. Workers feel controlled and belittled. The issue is most pronounced when firms track attendance using employee monitoring software, as with Lloyds’ card scanning policy.

According to a US study from the University of Pittsburgh, 99% of businesses saw a drop in employees’ overall job satisfaction when they issued return-to-office mandates. And, tellingly, none of the firms surveyed experienced an improvement in financial performance.

Companies up the ante to lure back staff

With employees digging their heels in on the issue of RTO, it’s clear that companies will need to offer more than just veiled threats to entice them back through the office doors. 

Lloyds’ annual report also pledges to “further modernise and enhance our office estate, with around half of colleagues in transformed workplaces by the end of 2024.”

Investing in more up-to-date, well-maintained office infrastructure, known as trophy buildings, could be the solution. In February, Google opened its new $2bn headquarters in New York City, which features cafes, terraces, micro-kitchens on every floor.

Other employers are admitting defeat. They are downsizing the office and moving into modern coworking spaces. These locations tend to have luxuries beyond what’s available at-home, such as regular networking events, without calling for huge investment.

It’s still uncertain whether companies offering upgraded office spaces or trendy coworking memberships can compete with the comfort and time-saving benefits of remote work. 

But the answer likely lies in a “carrot” strategy of employee benefits and incentives, over the “stick” of mandates and surveillance software. Firms which adopt the latter approach, such as Lloyds, cannot claim to be surprised by the negative employee sentiment it engenders.