Is Citi the New 'It' Place to Work on Wall Street?

(Bloomberg Opinion) -- Wall Street may not be clued in yet to the undercurrent of cultural change afoot at Citigroup Inc., but you can bet prospective employees are.

Ask any millennial in financial services, and they would probably tell you that Citi wasn't on their list of most desirable banks to work at in New York for the last decade. That reputation squares with a host of internal issues that followed its 2008 government bailout, including committing regulatory lapses, being cited for deficiencies in its risk management, watching online competitors gain steam and underperforming other big banks such as JPMorgan Chase & Co. and Bank of America Corp. People want to work at a firm that's growing, not one bogged down by internal botches, which can be felt in morale and often even in pay.

But with Jane Fraser now at the helm, that image is changing — fast. Even as some of Citi's peers push for a return to the office, the bank is going to allow staff to continue working from home at least part time in a bid to become a more competitive and inclusive employer. And — heads up Jamie Dimon and David Solomon — it just might work. The news article about Citi's flexible-work mandate was the most-read and most e-mailed on the Bloomberg terminal Wednesday.

Fraser's stance is a stark contrast to the tone set at the top of JPMorgan and Goldman Sachs Group Inc., where Dimon and Solomon aren't just summoning workers back to their buildings, they've appeared at times publicly dismissive of the widespread expectation for increased flexibility in the post-pandemic era. “People don't like commuting, but so what?” Dimon said in May. Solomon called work from home “an aberration that we're going to correct as quickly as possible.” The comments had their workers stirring.

Fraser has struck a different tone. In March, when most employees were still working remotely, the newly minted CEO designated “Zoom-free Fridays” to stave off burnout. “We are busier than ever, but please try to limit scheduling calls outside of what had been traditional working hours pre-pandemic and on weekends (remember those?),” she also wrote in a blog post, adding a reminder to take vacations and soliciting more ideas to "help us manage the strain," noting that "it's not a sign of weakness." This is not typical Wall Street CEO-speak.

Fraser has said that her gender doesn't define her management style. But it's hard not to notice that the first woman to lead one of Wall Street's top banks is effecting perhaps the industry's most notable operational and cultural rehabilitation from the inside out. While Fraser has spent her career in banking, she shows the value of bringing a diverse perspective to leadership roles. She's worked across many different divisions of Citi, including as head of its Latin America operations, and she has said that her experience there informs her strategy for making banking more accessible to lower-income Americans. Her appointment also stands in sharp relief to this telling collage in a Bloomberg News article in May about Morgan Stanley CEO James Gorman and the candidates to be his successor:

Citigroup isn't alone in embracing a more relaxed, hybrid model. Zurich-based UBS Group AG said it would permanently allow most of its employees to have that option some days. Deutsche Bank AG, another European lender, is allowing staff to split their time between the office and home as it looks to save money by reducing office space. Other financial-services firms such as asset managers — as well as technology giants and upstarts that are competing with banks for the same staff — are testing similar flexibility in the wake of last year's largely successful mass work-from-home experiment.

Of course, some roles, such as bankers working on mergers and acquisitions, still require a degree of face time and travel, but for the throngs of office workers who sit in front of computers and communicate primarily over e-mail and chat anyway, some employers' stubbornness regarding remote work puzzles them. Meanwhile, Barclays Plc, JPMorgan and Bank of America are increasing pay for junior bankers to combat burnout (how a bigger paycheck does that is unclear).

In many industries, U.S. workers are back in the driver's seat as blue-collar employers grapple with staffing shortages and white-collar firms face a heightened competitiveness for talent, particularly diverse employees. Some are even quitting companies that aren't addressing their frustrations with respect to a work-life balance.

Citi is getting post-pandemic office culture right. In just four months as CEO, Fraser is making job seekers and rivals suddenly pay attention.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Tara Lachapelle is a Bloomberg Opinion columnist covering the business of entertainment and telecommunications, as well as broader deals. She previously wrote an M&A column for Bloomberg News.