3AW Mornings host Neil Mitchell spoke with NAB CEO Ross McEwan about the return to hybrid working following the easing of Covid-19 restrictions. This is a transcript of their conversation on Wednesday 23 February 2022.

Neil Mitchell: One person very anxious to get people back is the Chief Executive of National Australia Bank, Ross McEwan, who has about, well over 10,000 of his own staff working in the city. Ross McEwan, good morning.

Ross McEwan: Good morning Neil. Thank you for having me on.

NM: How are you going to get them to leave home and come to work?

RM: Well, there’s a fair lot of them that actually just want to come back to work. They’re tired of being at home. They want to get back and catch up with their colleagues, get back into the swing of being in an office and all the things that positively it brings for them.

Particularly our younger folk who have joined the bank in the last couple of years. They want to get on with their careers and sitting at home is really giving them some difficulty. They want to be with experienced people.

NM: I’ve heard some estimates that it’s expected that as few as 10 per cent will return, this is across the whole city, as few as 10 per cent will return for five days a week. What percentage of your staff do you expect to go back to five days a week?

RM: I don’t know how many will come back five days a week, but the vast majority are going to come in for a minimum of two, probably a minimum of three. They’ve already indicated that to us. The vast majority actually just want to get back into the office and get back into what should be normality.

But I understand that some are thinking about how much time should I come to the office and how much time should I stay at home given we’ve been at home for two years in Melbourne, less so in other cities.

NM: So, you’re comfortable with that? They’ll be permitted to work two or three days in the office?

RM: It depends on their job. We’ve got a number of jobs that actually need to be in the office and the branch and certain centres five days a week. We’ve got brand new staff that we will expect in here for five days a week while they get trained and developed. But as they get proficient at their job, there will be jobs that we can have them in the office two or three days a week and the rest at home.

But the big piece is I think organisations are failing to acknowledge the cultural development that happens when people are together collaborating. They’re much more innovative when they’re together than they are sitting alone at home. And I think that in five years we might find that ‘it was a great idea to be working from home, but what have we lost?’.

NM: It could create you a problem though. They’ve found in the UK, and we are finding here, that most people if they work (at the office) three days a week, they want to be Tuesday, Wednesday, Thursday. They were tired Friday and Monday – and working from home – for obvious reasons. That means you could have a full staff in the office for those three days, but Monday and Friday you’re half-empty. But you can’t cut back your office space because you need it for Tuesday, Wednesday and Thursday.

RM: Well, I’ve been pretty clear with our team that if they’re going to do two or three days in the office, we can’t have everybody doing, just as you said, Tuesday, Wednesday, Thursday. It’s gotta be spread and that’s up to our leaders to work with their teams to make it work for both the business and for the individual – and I think that’s what we’ll do.

NM: Have you thought about free coffee or something like that to get them in?

RM: Absolutely. And getting them back into Melbourne and Sydney I’m happy to get the free coffees going for the week, absolutely. And Neil, just a thought, I’ve got 15,000 in CBD Melbourne. And this is the impact it has on CBD Melbourne. So let’s say I get the average coming through and we get 10,000 per day, and they all come into town and they spend 10 bucks on a sandwich and a cup of coffee. And you and I know you go down to the sushi bar, you’re going to be paying more than that. But let’s just say it’s $10, there’s $100,000 of income that goes into small businesses underneath my building.

And that’s what we need, desperately need – and then that has the effect of they’ll employ somebody. And on we go, we get this economy moving again, which we desperately need, particularly for small businesses. That’s the multiplying effect.

NM: I’m surprised the Chief Executive of the National Australia Bank goes to the sushi bar, I thought you’d have a corporate dining room.

RM: Stop it Neil, stop it. Those days finished a long time ago. The local sushi bar, good healthy stuff.

NM: Well ,that’s very true. So what do we need to do? I’m back in the office next week, we’re going to have outside broadcasts all around town. We’ve been talking to your people about that. What do we need to do? What does the city need to do? What does the government need to do to encourage people back in to stop the city dying?

RM: Well first off, I think Dan Andrews and the state government have done the first thing that will make the biggest impact, which is say to people ‘you can go back to the workplace’. And no mask. That is the number one thing we want to change because now that people are feeling safer, they’ll come into the office and we’ll get the city moving. And as I’ve said, if I get 10,000 a day spending $10, if every business around town started to do that, we’ll get there.

The other thing is we’re getting our sporting events going, and if people came into town to go to a sporting event, doesn’t matter if it’s rugby union or league, the AFLW, football, netball, it doesn’t matter. Or a show. If everybody just took a little bit of activity of doing that, the foot traffic in the city would increase hugely. And a few dollars here and there make a big difference to these small businesses.

NM: Ok. Do you provide masks and sanitizer and everything for your staff when they come in?

RM: Yeah, we’ve had all of the sanitizing, all of the facilities here in the building. As I’ve said, it’d be safer in here than it would be with 12,000 people packed into a tennis game.

NM: Couple of other quick things, I know you’re busy. It’s reported today that you’re predicting, it’s being predicted, a 25 per cent increase in the cost of a mortgage over the next 18 months. Correct?

RM: Well, we’re saying that as interest rates go up, and let’s say you’re sitting on an interest rate of two and a half per cent, be that a fixed rate or a standard variable, somewhere around that number, and it goes up by 50 basis points, that’s where that 25 per cent increase comes from. Remembering that a lot of people are already overpaying on their mortgage i.e. they’re paying more than they need to on a fortnightly or monthly basis. And we do a calculation when they’re taking out the mortgage that actually has them paying a higher interest rate than what they’re actually paying as a test for us that can they take a bit of stretch.

We think as interest rates go up, as long as people have a job, they’ll modify and be able to be in good shape. And the other thing Neil is get them to ring if there’s a problem. Please do it early. That’s all I’d say to people, ring your bank early if you’re having some difficulty.

NM: The other thing is it looks like war in Ukraine, well almost seems inevitable. The US President is saying there’s going to be a lot of pain, sanctions, gas prices are going up, fuel prices going up. What do you think could be the impact of war in the Ukraine?

RM: Well certainly any war is horrible and we’re starting to see it build up in the borders of Ukraine and coming into Ukraine. It unsettles markets and you will see some prices, particularly around oil and gas prices, they’re global markets and are starting to rise already. War unsettles markets but it’s horrible for people as well, and a lot of innocent people get caught up in it unfortunately.

NM: And in terms of the economic effect, it’s inflationary too, isn’t it? If you’ve got fuel process going up.

RM: Absolutely and we’ve already seen that starting to come through just with the talk of war, and certainly prices will start to move up, which has an impact on every household in Australia.

NM: Thank you for your time and we’ll talk next week, I hope. Ross McEwan Chief Executive of National Australia Bank. 15,000 people in the CBD, one of the biggest employers.