In March 2023 the world witnessed the collapse of Credit Suisse, one of the world’s most established banking and financial institutions, which was eventually bought out by UBS. An important factor in Credit Suisse’s downfall was its rigid stance on the forced return of staff to the office.
This warning reminds business leaders to adapt to the changing world of work and prioritize the needs and preferences of their workforce.
In contrast to the growing trend of many companies to adopt a flexible hybrid work approach, Credit Suisse adopted a more traditional approach, requiring staff to return to the office three days a week. According to a banker there, "They took away our flexibility,” and he was not feeling well.
Bank executives failed to recognize the fundamental change in employee expectations and leverage the value of flexible work arrangements. Despite several studies and concrete examples showing the benefits of hybrid work, Credit Suisse leaders remained committed to outdated work paradigms, until the bank’s eventual downfall.
By forcing staff to return to the office during summer 2022, on top of demonstrating a lack of empathy for the well-being of its employees, it's estimated that Credit Suisse increased the risk of burnout by up to 43% - according to Future Forum recent study about flexibility at work. Credit Suisse’s decision fueled resentment among its employees, who felt that their preferences and needs were being ignored.
This disregard for employee needs resulted in lower morale and engagement, as well as increased stress and turnover. The bank lost talented people to competitors who embraced hybrid and remote work, weakening its competitive advantage, and ultimately impacting its productivity and results.
Credit Suisse’s insistence on returning to the office reflected an outdated organizational culture that clings to traditional working methods, despite overwhelming evidence supporting the benefits of the more flexible hybrid and remote work. By not adapting to the changing work landscape, Credit Suisse missed out on opportunities for innovation, collaboration and growth.
This stagnant culture eventually played an important role in the bank’s collapse. Its inability to retain and attract top talent, combined with the negative impact on employee morale and productivity, contributed to Credit Suisse’s weakening market position, and ultimate collapse.
Its failure had a ripple effect on the financial sector, and served as a warning to other organizations - a wake-up call for leaders around the world, highlighting the importance of embracing change and prioritizing employee well-being.
UBS’s acquisition of Credit Suisse highlighted the stark contrast between a company that understands the need for change, and a company that stubbornly clung to outdated practices. For example, UBS’s adoption of a much more flexible working model means that some roles within the company are 100% remote, while others align with a more flexible hybrid model. As a result of this approach, a UBS survey found that 86% of its employees felt that more flexibility was needed, including the ability to maintain a remote or hybrid work environment. UBS stated that as technological improvements and the adoption of virtual work continue, it is about “finding new ways to interact with customers and build trusted relationships.” This is the kind of innovation that Credit Suisse lacked.
The collapse of Credit Suisse underscored the importance of adaptability in a changing world of work. By forcing employees to return to the office, the bank ignored the benefits of hybrid work and the varying and changing preferences of its employees.
In recent years, hybrid and remote work has revolutionized how organizations operate, allowing them to tap into global talent pools, reduce operational costs and improve employee satisfaction. Companies that have successfully transitioned to hybrid or remote work have experienced productivity gains and improved work-life balance for their employees.
The collapse of Credit Suisse reminds us of the importance of adaptability and responsiveness in today’s business world. By embracing hybrid work and prioritizing employee well-being, organizations can avoid the pitfalls of a stagnant culture and position themselves to succeed in the ever-changing workplace landscape. Failure to adapt can not only result in the loss of top talent and reduced productivity, but also more serious consequences, as evidenced by the demise of Credit Suisse.
