Poor working environment costs financial services £8.5 billion per year

According to global management consultancy Hay Group, 63 per cent of finance industry managers create poor working climates.

Chris Watkin, UK head of talent management at Hay, commented, “Up to 30 per cent of business performance is dependent on a motivational working climate. And in times of economic uncertainty, maximising staff motivation and discretionary effort will be more critical than ever.”

“Yet our research demonstrates that business leaders in the financial sector are struggling to create the right climate to motivate employees and drive high performance.”

The trendily named report, ‘Climate Change?’, is based on research among over 580 financial services managers. The findings are based on a gap analysis of employees’ ideal working environment, compared to that which they actually experience.

The study concludes that just one fifth of finance executives create a high-performance environment according to employees, while less still (17 per cent) manage to generate an energising working atmosphere. By contrast, close to half (46 per cent) create a de-motivating climate for staff.

Leadership styles

Hay Group’s research identifies six main leadership styles managers employ: directive, pacesetting, visionary, affiliative, participative and coaching. It said that the broader the range of styles a leader uses, the more likely he or she is to create a high performance climate.

Chris Watkin commented: “You wouldn’t go round a golf course armed only with a putter. A player needs a whole set of clubs in order to adapt to whatever situation the golf course may throw at him.”

Finance executives who create high performance climates tend to use the more ‘collaborative’ or team-based approaches. By contrast, those generating de-motivating climates tend towards more ‘individualistic’ styles – i.e. directive and pacesetting.