As the coronavirus restrictions began easing, the largest credit union in the world reassured its 13,000-strong workforce that they wouldn’t “be forced to return to an office”. But now, two years later and with another CEO at its helm, Nationwide has walked back on its promise.
It all started when Nationwide surveyed its workers and found that more than half wanted to work from home forever. Just 6% of workers wanted to go back to the office full-time.
“We have listened and learned, and we are now deciding to move forward, not back,” Joe Garner, the then chief executive said, while launching the company’s “work from anywhere” policy in 2021. “We are putting our employees in control of where they work from.”
However, his successor Debbie Crosbie has put a swift end to that dream.
Last August, shortly after her appointment, she amended the company’s “guidance” by asking staff to “try and come in” at least one day a week. Now, she’s taken a tougher stance and scrapped the “work from anywhere” policy altogether.
From April next year, staff will need to be in an office for at least 40% of their contract—two days a week for a full-time employee.
“Hybrid working is an important part of Nationwide’s flexible arrangements,” a company spokesperson told Fortune. “Colleagues are already expected to work in an office for at least one or two days per week, depending on their role. This change simply moves the minimum to two days for everyone.”
While the policy will come into force from 1 January, a transition period to allow staff who have made major lifestyle changes will mean it will not be “enforced” until 1 April 2024.
Still, staff are reportedly “very, very angry” about the U-turn. Some had moved away from the office and others had childcare arrangements built around the premise of being able to work from home forever.
“Flexible working has become a difficult and emotive topic—many people have changed their lives completely based on the pandemic and immediately-post-pandemic lifestyle, moving houses, caring for loved ones, buying pets that have now become part of the family,” Kate Davis, leadership coach dubbed ‘the Board Whisperer’ tells Fortune.
“Upending a future vision of flexibility feels viscerally like taking away hard-earned rights and freedoms.”
But she empathizes with Crosbie’s unique position.
“Her predecessor made broad promises to the staff in the midst of the pandemic that may or may not have been sustainable long term, but he didn’t stay in position to deal with the issue. Crosbie now has to navigate the current landscape and make adjustments as she sees fit.”
It’s a situation more CEOs will find themselves in, as pandemic-era executives leave their roles. This year, bosses have been quitting their jobs in record numbers, leaving a ton of new incoming chiefs to steer the future of work with the pledges their predecessors made during an unprecedented crisis.
Essentially, for employers, it means that there’s probably a lot of promise-breaking and policy-amending ahead.
The impact of U-turns on team morale
Whether or not you made a commitment to your team, as Mark Mortensen, Associate Professor of Organisational Behaviour at INSEAD Business School tells Fortune, “any CEO who steps into the role inherits a history along with it”.
Employers, of course, have every right to change policies that are no longer fit for purpose, but it won’t come without resistance.
“Some CEOs inherit their predecessors’ poor strategic decisions (failed mergers, unsuccessful ventures) and we wouldn’t expect them to continue with them if they thought they were bad for the company – and by the same token a new CEO shouldn’t have their hands tied by their predecessor’s WFH policy,” Mortensen says.
“However, on the other hand, employees’ contract is with the company and when the company announced a policy of work from home, it made a promise to those employees,” he adds. “Like it or not, a new CEO has inherited that promise and no amount of arguing is going to convince employees that their promise of WFH is no longer relevant.”
What’s more, the more personal the promise is, the bigger backlash that leaders may have on their hands when they backtrack. While strategic changes won’t massively impact worker’s lives, office attendance certainly will.
“Employees may perceive that their employer is violating the psychological contract,” Karan Sonpar, professor of Management at UCD Smurfit School of Business warns Fortune, adding that it may lead to disengagement, feelings of injustice and antagonism among workers.
How to avoid unsettling staff when making changes
How annoyed staff are in the aftermath of rules changes depends on a few things: How well the shift was communicated, its perceived fairness, and worker’s existing attitude towards their employer.
“Employees are also likely to base their judgments on whether fair procedures and processes were followed by executives prior to changing old rules,” Sonpar says.
Before communicating any sudden changes, he implores executives to ask themselves, was enough time taken for listening and deliberation? Were sufficient people involved or engaged in recommending changes in the new policy? Is sufficient time and flexibility being provided prior to new rules being introduced or enforced?
“There is also a need to communicate ‘why’ these changes are necessary by explaining how status quo is not an option since it may be more harmful in the medium term,” Sonpar adds.
Communication is everything, Andy Brown, the CEO of the company engagement consultancy Engage Group agrees.
In the case of summoning workers back to the office, he insists leaders must provide their workforce with a sound reason for doing so or risk a 10% drop in employee engagement.
“Our evidence shows that employees who feel the rationale for decisions have been explained well by senior leaders are up to four times more likely to stay engaged when big changes happen,” he said.
Is it worth it?
In the end, reversing policies that have a major impact on worker’s lives are likely to cause significant distress and damage company culture. So there are a few key considerations CEOs should weigh up before ripping up the rule book, Davis says.
1. Will it meaningfully improve the bottom line or the ability to avoid financial distress? “There must be a compelling fiscal reason,” Davis insists. But beware: “Talent losses or legal issues flowing from the move could lower projections,” she adds.
2. Does undoing the decision better position the company competitively? “This might range from increased agility and innovation to stronger branding or intellectual property control,” Davis says. “However, eroded culture and morale also affect competitiveness.”
3. Who will be most upset? Davis suggests gathering unfiltered insight into employees’ attitudes related to the promise or policy before gauging who would most likely leave over the changes. “If these are the ‘leading lights’ or seen as the future phase of the company, either the decision is not right, or these people may need additional motivation to get on board,” she adds. “However, this is time and money well spent, if you can make them the ‘champions of change’ to embed and motivate the rest of the organization.”
Plus, it’s important to note that workers who threaten to vote with their feet may be all talk no action. “Our data shows that many who threaten to leave actually don’t,” Brown insists.
