One of fundamental flaws of human beings is our idealistic belief that complex problems can be solved with blunt and simple solutions. Such is the case when I hear bankers talk about employee turnover.
Across all markets in the country, retaining skilled bankers has become one of the fundamental strategic challenges in our industry. This concern surfaces in almost every bank planning session I attend, but oftentimes the issue is errantly identified as something that “the Human Resources department needs to deal with.” Thinking that a staff support group can solve a deep business issue like turnover is akin to thinking that the accounting department can somehow solve a company’s earnings problem.
In our soon-to-be-released 2007 Cornerstone Report: Benchmarks and Best Practices for Mid-Size Banks, we found that the median bank employee turnover rate was 21% at the corporate level and 34.1% for tellers. In less than three years, the average bank turns over the equivalent of its entire front-line teller staff. Certainly these numbers make it hard for banks to pursue their goals of being service-driven, relationship building, financial-service dynamos. The greeters at Wal-Mart seem to stick around longer than the folks at my local branch. So…what can be done, GonzoBankers? Will our industry ever be able to tame the turnover beast?
Here’s my take on the turnover dilemma:
The Gonzo Retention Plan for the HR Director
While the oft-ignored Human Resources department cannot be expected to solve the employee turnover issue, it certainly can be the coordinator and catalyst for going after the problem. Like Ross Perot said, “Be the sand that irritates the oyster and out comes the pearl.” To be honest, I’m tired of all the action-less, academic dribble that comes from the HR profession. It’s time for some common sense to grab management’s attention. Here’s my four-point plan for HR directors to start the revolution:
#1: Create the Turnover Score Card – The first thing HR has to do is make the turnover issue visible and the costs real. So build a scorecard with the following components. For your major functions (e.g. teller, platform, commercial, mortgage, trust, back office, admin), break out the turnover ratio separately on a quarterly basis. Show a reconciliation of budgeted FTE, unfilled positions, new hires, employees who left voluntarily and involuntary turnover. Then, for dramatic effect, show the training, temp and recruiting costs those functions spent for the quarter. This type of visual report will keep management focused quarter to quarter on the issue.
#2: Get Transparent About Exit Interview Fodder – One cool best practice the HR wonks have all agreed upon is to conduct exit interviews with employees to learn “what could we have done better.” The problem: most mangers only hear broad, boring, general summaries of exit interview information. (“We are finding a variety of factors are impacting turnover.”) My solution: create a report that simply lists anonymous quotes from all of the exit interviews for the quarter. A scan of these comments from any manager will reveal patterns and make a company’s issues more real than any summary report.
#3: Analyze Seven Factors that Make ’em Stick – The HR consulting world likes to talk about “Retention Audits” to help reduce turnover. Once again, I think your HR staff could whip one of these up for you. Keep it simple. Build a matrix that summarizes with bullet points and scores the bank Green/Yellow/Red on seven key areas that help keep employees around:
#4: Develop the Resource Budget and Justify with Retention Targets – Once the gonzo HR group has done its analysis, it’s time for management to craft a plan and approve a budget to go after the retention issue. One caveat: HR and management should try to make this thing budget-neutral over time, meaning the costs to reduce turnover (training, incentives and foosball tables) should be offset by accountabilities for actually reducing the turnover number. I admit, this is real tough, but it’s the business mindset we need to take with this HR issue.
Turnover is one of those issues that floats around every year at the bank but never seems to get a groundswell of action to address it. I think it’s because most bankers have wrongfully assumed there’s some mystic practice that HR can follow to address the issue. Going forward, bank managers should jump in feet first and get involved in the business issue of keeping employees, and HR can start this process by making the facts about turnover more visible with senior management.
Fight the good fight!
Mt.gov – is the source
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