Lloyds Banking Group, the U.K.’s biggest lender, will include office attendance as a factor in performance-based bonuses this year.
The company, which is ranked 46th in the Fortune 500 Europe list and employs about 60,000 people, currently requires employees to spend at least two days a week in the office. This February, when employees will be paid bonuses for the 2024 financial year, their office attendance will also be taken into account along with performance-related metrics.
The new system will apply to senior bankers, not all its employees, Lloyds Bank confirmed to Fortune.
In 2023, the British bank and its recognized unions approved a pay proposal for employees who went above and beyond to support customers, a Lloyds Bank spokesperson said.
“We are also proud to offer an industry-leading approach to flexible working which delivers many benefits for our colleagues, while ensuring that we are well-placed to deliver on our ambitious strategy to transform our business and continue to deliver for our customers,” the spokesperson told Fortune.
Lloyds Bank announced a slew of changes last year, including a shift to digital banking and headcount reductions in its risk management department. The company hasn’t ramped up its return-to-office mandate since April 2023, when it ordered staff back into the office at least twice a week.
At the time, CEO Charlie Nunn said that he wanted “flexible working to be fair, inclusive and productive for all.”
Most employees already follow the current in-office requirement, so the link to bonus and attendance won’t be a “big problem,” Ged Nichols, the general secretary of Accord union that represents Lloyds bank employees, told Fortune.
“However, we will support any union member who feels that the bonus outcome is not a fair reflection of their performance and circumstances,” he said.
Carrots and sticks - take your pick
Other banks have taken a similar approach in the past. Citi Bank baked compliance with RTO rules into its bonus system, along with tighter oversight on employees’ keycard swipes. Similarly, Australian bank ANZ warned its staff in November 2023 that they’d be paid lower bonuses if they spent less than at least 50% of their time on average in the office.
As much as employees want to hold on to the ease and convenience of work-from-home practices normalized during the pandemic, the tide is turning. Just weeks into the new year, many major companies are already revisiting their approach to flexibility and RTO policies.
Ad giant WPP demanded that its staff return to work at least four days a week from April—a sharp change from a more flexible policy that allowed some employees to spend as few as one day in the office. The announcement has been met with pushback from employees globally, many of whom have signed an online petition to reverse the mandate.
Meanwhile, JPMorgan invoked pre-pandemic memories late last week when it told its workforce to come into the office all five days from March onwards.
Hybrid work has clear benefits, from productivity gains to better time management. But those are starting to dim as more CEOs suggest in-person presence results in more opportunities.
Debbie Crosbie, the chief of one of the U.K.’s preeminent banks, Nationwide, said that women are impacted by remote work as they opt for it more than men.
“Being seen and then seeing other leaders is a really important part of development,” she said in a BBC radio appearance earlier this month.
