Key highlights
- Credit Suisse’s collapse was due to a combination of factors, including poor risk management, exposure to risky investments, and legal issues.
- Its handling of its human capital and remote work policy was also cited as a reason.
- The bank’s rigid policy of forcing employees back to the office played a big part in its demise. This led to high employee attrition and an inability to retain and attract top talent, which had a detrimental effect on employee morale and productivity.
- HR Execs of Nigerian banks can learn valuable lessons from Credit Suisse’s collapse, including embracing hybrid and remote work arrangements, prioritizing employee well-being, fostering a culture of innovation, utilizing technology, and offering competitive benefits.
- Nigerian banks must prioritize their workforce’s needs and preferences, including adopting a flexible remote work approach, providing mental and physical health support, encouraging innovation, investing in technology, and offering competitive benefits to attract and retain top talent.
Swiss global bank, Credit Suisse, is one of the latest banks that failed in the last few weeks as the global banking system continues to suffer from poor risk management decisions.
According to several online reports, Credit Suisse collapsed due to a series of events that led to significant losses for the bank. Reports indicate that it was due to a combination of factors, including poor risk management, exposure to risky investments, and a lack of oversight.
The bank also faced legal issues related to its role in the collapse of Archegos Capital Management, which caused significant losses for Credit Suisse. In addition, Credit Suisse was also involved in the collapse of Greensill Capital, which was a major supplier of working capital finance.
These events led to significant losses for Credit Suisse and ultimately resulted in the bank’s collapse. One other reason that has been cited for its collapse, is the handling of its human capital, especially its remote working policy.
This led to high employee attrition, and the inability to retain and attract top talent, which had a detrimental effect on employee morale and productivity. The rigid policy of forcing employees back to the office played a big part in Credit Suisse’s demise.
The bank’s rigid HR Policy
Credit Suisse’s recent collapse and eventual acquisition by UBS is a stark reminder for business leaders to prioritize their workforce’s needs and preferences, especially when it comes to remote work policies.
The bank’s rigid stance on returning staff to the office three days a week, rather than embracing the growing trend of hybrid work arrangements, is seen as a significant factor in its downfall.
According to a report from FastCompany, Credit Suisse’s leadership initially supported hybrid work, acknowledging that returning to the office was “not what employees want” and that it would be “counterproductive” to “push too hard” to get them back in, as then-CEO Thomas Gottstein noted in May 2022.
However, the approach changed in July, with staff pressured to return to the office, as a source told E-Financialcareers “Most of it is just about showing senior management that teams are in and are working.” Despite numerous studies and examples highlighting the benefits of remote work, the bank’s leadership remained stubbornly attached to outdated work paradigms.
By forcing staff to return to the office, Credit Suisse demonstrated a lack of empathy for its employees’ well-being and work-life balance. The bank’s missteps, most notably the $5.1 billion loss from a client, created an environment of decreased morale, heightened stress, and increased turnover rates.
- An employee remarked, “We definitely have seen a lot of people leaving. These people [have] been in the bank for decades, and now they’re leaving, and senior managers as well. There’s a level of uncertainty that drives people who [are] very loyal to the brand to actually leave because of their concern about finding themselves without a job.”
This decline in employee engagement and commitment ultimately impacted the bank’s productivity and bottom line. As noted in a report in TheStreet, “There was a clear impact on productivity.
Senior management time was sucked up by fixing things rather than improving things. It was all hands on deck to manage the fallout from the loss.” In the end, Credit Suisse’s reluctance to embrace a flexible approach to remote work may have been one of the factors that led to its collapse.
What HR Execs of Nigerian Banks can learn from this
There are valuable lessons here for HR Execs of Nigerian banks.
Embrace hybrid and remote work arrangements: As evidenced by the Credit Suisse collapse, rigid work policies can lead to decreased morale, increased stress, and higher turnover rates. Nigerian HR Execs should consider adopting a hybrid and remote work approach that offers their employees more flexibility and a better work-life balance.
This can be achieved by allowing employees to work from home a few days a week or by offering flexible hours.
Prioritize employee well-being: The current pandemic has highlighted the importance of empathy for employees’ well-being. Nigerian HR Execs should prioritize the mental and physical health of their employees by offering wellness programs, counseling services, and flexible work arrangements.
This will help retain their best talent and maintain a motivated and productive workforce.
Foster a culture of innovation: Companies that are adaptable and open to change are more likely to remain competitive. Nigerian HR Execs should foster a culture of innovation that encourages employees to suggest new ideas and approaches to work.
This can be achieved by creating a safe space for employees to voice their opinions, providing training and development opportunities, and offering incentives for innovative ideas.
Utilize technology: Technology has revolutionized the way organizations function, and Nigerian banks must keep up with the times to remain competitive. HR Execs should consider investing in technology that makes work more efficient and accessible, such as collaboration tools, video conferencing software, and project management software.
Offer competitive benefits: In addition to offering flexible work arrangements, Nigerian banks should consider offering competitive benefits to attract and retain top talent. This can include health insurance, retirement plans, paid time off, and other perks that improve employee satisfaction and engagement.
Finally, the collapse of Credit Suisse serves as a cautionary tale for Nigerian banks to prioritize their workforce’s needs and preferences.
Embracing a hybrid and remote work approach, prioritizing employee well-being, fostering a culture of innovation, utilizing technology, and offering competitive benefits will be critical to achieving a motivated, engaged, and productive workforce.
Most of the employers here in the industry believe and they demonstrate it to you that by employing you, they have done you a great favour which you should be grateful for. You are not expected to ask for more, irrespective of better HR practices in other climes.