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Inside in Full: Return to work: The uneasy stand-off

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Topics: Strategy Topical Trends

The pandemic forced a remarkable experiment in re-engineering work and the workplace...

In the initial phase of the pandemic, offices were mandated to close and as a matter of necessity organizations switched overnight to operating with a distributed workforce.

In the succeeding 18 months, as the Covid threat has waxed and waned, the insurance sector has operated half-in, half-out. Offices have been re-opened and closed again. Arrangements have been flexed. Companies, teams and individuals have experimented, looking for the right formula.

The whole thing has had an air of provisionality about it – partly reflecting the pandemic’s propensity to stage a resurgence when it seems to be winding down, as with Delta in summer last year and Omicron in December.

But with confidence increasing that the acute phase of the pandemic is over, insurers and brokers have been seeking to usher in post-pandemic working patterns over the last two months.

Most sector CEOs want their senior and market-facing staff to spend significant amounts of time in the office, although not 100% of the working week.



“Return” to work?

Despite this wish and widespread talk of the “return to work” in March, underwriters and brokers are not heeding the call en masse.

One major sector player said that its firm is struggling to get even a quarter of its staff into the office on a peak day, i.e., Tuesday to Thursday. Most executives refuse to share figures even on background but acknowledge their workforce remains primarily remote.

A carrier CEO said that on its busiest days it was pushing towards 50%, but this is jam-packed compared to what others are talking about.

The phenomenon extends well beyond areas that have shown extreme caution around Covid like New York City and San Francisco, with even southern cities like Atlanta, Charlotte and Houston showing extremely depressed occupancy levels.

It also stands in contrast to major European financial centers like London and Zurich, where many staff are now spending multiple days a week in the office, with majority occupancy achievable.

Given the greater caution that Europeans showed through the pandemic, there can be little doubt that in the aggregate, the key factor keeping Americans away from the office is inconvenience, not fear.

Morgan Stanley CEO James Gorman’s quip that if staff can go to a restaurant, they can come to the office struck the wrong tone but caught the essential point.

Hidden organizational costs

Privately management teams are exasperated.

One segment CEO told this publication that his organization had been able to weather the pandemic because of the social capital, expertise and culture that existed already.

Questioned if their organization had suffered decay during pandemic remote working, another executive answered: “Undoubtedly. There is a hidden organizational cost to running this way.”

Management teams are concerned that without significant amounts of co-location they cannot a) build a winning culture; b) carry out effective training and development; c) foster a true team ethic; and d) innovate.

Another C-suite source said that their company had put the needs of its individual staff first through the pandemic, but that now there needed to be a reset to focus on the needs of the teams and the broader group.

A small number of firms have taken a more muscular stance with staff, with Chubb’s Evan Greenberg famously declaring that his firm was a “work-from-office company”.

But most leadership teams are trying to find ways to persuade their staff of the virtues of the office. So, they lead by example in coming into the office. They set up nudges like free breakfasts, complementary coffee and all-team meetings with drinks afterwards.

They set up frameworks with an emphasis on hybrid working, but with a significant dose of in-the-office. Three days in, two days out. Six days a month in one case.

This seems to have gained relatively little traction.

Fundamentally, senior management and staff are misaligned. Staff have stumbled on a way of working that gives them greater freedom, flexibility and control. It works for individuals.

Senior management are counting the long-term costs to the organization in eroding culture, slower innovation and poorly trained staff. They are looking for a solution that works for the company.

Of course, not all management teams take the same perspective. There are some that have genuinely found religion on flexible work, the virtues of the distributed workforce etc., etc. And others are willing to take the devil’s shilling and trade organizational effectiveness for reduced real estate costs. (A margin-seeking exercise that masquerades as values-driven management is irresistible to some leadership teams.)

But for the most part, CEOs seem worried by the potential impact of having as little co-location in 2022 as they had in 2021.

Eye-wateringly tight labor market

This misalignment is playing out against the backdrop of the tightest labor market in memory, with the macroeconomic factors exacerbated in insurance by the number of businesses looking to grow in the hardening phase of the cycle, and the sector’s weak track record of talent development.

Sources have told this publication that the desperate need for talent in the P&C industry is shifting the power dynamics for workers and job seekers, sending wage demands through the roof and forcing companies to rethink the perks and policies they use to lure new staff and keep their existing people.



And so, although CEOs want to rebalance away from a staff-direct model, they are (rightly) scared to do this right now.

Kinsale CEO Michael Kehoe told this publication last month that his company – a high-performing specialty insurer – has lost staff because of its hardline stance on having people in the office. Companies are also realizing that one way to make an unattractive opportunity attractive is to say that the job can be done wherever and whenever the candidate wants.

With staff power enhanced, management teams that are normally in a position to dictate may need to buy their time and wait for a change in dynamics. In the meantime, they will likely seek to hone their powers of persuasion and dial up the nudges.

Still, this is important to staff, and it is easy to see an uneasy standoff persisting.

But that is not sustainable long term. There may, however, be a deus ex machina for frustrated management teams.



Gallagher, Jamie (US)


A recession later this year looks more likely than not. Job losses, reduced hiring and an atmosphere of fear would swing the pendulum of power back towards management. At that point, they would probably have the scope to become a little more directive around the future of work, with more rules and fewer staff surveys.


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