Personally I've dressed 'business casual' for work for over a decade now. It's just expected where I work and proved to be the key to getting me away from the first line tech support position I started in. I showed up for the transfer interview in my best button down shirt and slacks, which wasn't all that different from what I wore on a day to day basis. I was later told that was the tie breaker between me and an equally competent tech who'd shown up in a ratty old Metallica shirt and torn up jeans. Which is basically the kind of clothes he continues to wear on a day to day basis now.
But that said suddenly changing the dress code on people is bad juju. Some of them will probably have to go out and invest in a new wardrobe to meet the new code and doubtless it will lead to ill will.