As part of our summer 2024 employment trends series, we look at two of the key topics keeping HR teams in the financial services sector busy.
Non-financial misconduct
The FCA is increasingly shining the spotlight on Non-Financial Misconduct (NFM) and has made clear that this is no longer a peripheral concern but an area which falls squarely within its jurisdiction. NFM covers a wide range of behaviours, whether inside or outside the workplace, including sexual harassment, discrimination and bullying.
At a recent appearance in front of the Treasury Committee, the FCA’s Chief Executive, Nikhil Rathi, confirmed that NFM is an immediate priority. This should not be surprising given the damning and critical findings made by the Treasury Committee earlier this year in its report following its Inquiry into Sexism in the City. The report makes for stark reading, in particular the finding that sexual harassment and bullying continue to be prevalent in financial services and that firms continue to handle such allegations poorly.
Financial services firms should be mindful of the incoming duty on employers to show that they have taken positive steps to prevent sexual harassment in the workplace. This comes into effect in October 2024 and was also addressed in the Sexism in the City report.
Having already gone out to wholesale insurers to survey instances of NFM, we can expect the FCA to ask more questions in other parts of the sector. At this time, firms should review how they record acts of NFM across different workstreams such as whistleblowing, disciplinary and grievance, settlement agreements etc. There will be challenges for some firms to ensure that they meet the FCA’s expectations in respect of NFM.
Return to the office in financial services
We have been tracking a trend of return to office mandates by financial services firms. There has been a notable increase in firms attempting to move away from entirely flexible arrangements to enforcing a policy of a mandatory number of days in the office each week by staff.
The reaction to this shift has been interesting and has triggered many debates, including around the impact remote and hybrid working has on a firm’s culture and on the professional development of employees. Questions are also being asked about the enforceability of a mandatory return to the office policy. For the first time since the pandemic, we are seeing some firms readying themselves to address failures to comply with return to office mandates.
Whilst there remain some outliers who support a fully flexible hybrid approach, this trend for a more prescriptive approach in financial services seems set to continue. We expect that the disciplinary enforcement of a mandatory return policy and the wider challenges that will bring may become a focus for some HR departments in the sector in the coming months.
