Commercial Loan Automation
Small Business Banking
Many banks are becoming less concerned about HR issues. While we all continue to profess that people are our only sustainable competitive advantage, unemployment is still quite high and talent more available than ever. Full practice "lift-outs" are becoming much more common, and employee loyalty and retention has improved considerably given the scarcity of alternative jobs.
These are perfect times to revisit your investment in human capital. What are you doing to acculturate and retain the talent you are hiring today to enhance retention when the job market tightens up? How are you shoring up the existing workforce to strengthen your cultural cohesion and intensify your message?
Below are some thoughts.
Learn from today's "hottest" employers. Google, Twitter, Yahoo and other "hip" employers (and, let's face it, banks are not hip) are doing things for their associates that we don't do. They have great upward potential and options to give out, and yet they are innovating their workspace in ways that improve productivity and retention. We have all heard of the airy work spaces they offer, the vibrant colors, the egalitarian and economical space (no offices for all, often including the CEO; many conference rooms), the awesome food on-site (a major attraction for me snacks of all kinds and persuasions 24/7), child-care etc.
I'm told these perks are good for millennials but not essential for the run-of-the-mill bankers. Not surprisingly, I have not heard of many banks that are doing this, especially in today's cost-containment mode. But those who do are ahead of the curve. First, research shows that ALL employee groups like these perks, not just the young ones. All age groups are looking for job growth, making meaningful contribution with their work, and seeking recognition. Further research shows that the availability of food, cleaning pick-up and other such services reduces absenteeism and enhances productivity.
Banks don't offer these perks because they perceive them to be expensive. They subsidize the cafeteria and stop there. One innovator is Trustmark, whose dynamic HR Director, Becky Vaughn-Furlough, took advantage of a departing tenant to open a Starbucks-cum-sundry shop at the bank's lobby (aptly named "Lobby Express") which serves both the bank employees and outsiders. It operates as a profit center and indeed generates a profit. At the same time it creates a sense of well-being and reduces employees' need to go elsewhere for such basic services.
There are myriads of services you can offer your associates that, at worst, will help you break even. Start considering those changes, including workspace innovation when renovation is inevitable, and pencil out those business propositions to ensure they are additive to your bottom line. The competition for talent will intensify and we will return to the pre-2008 days. Get ready for that battle today.
- Health clinic. Health care providers offer now professional healthcare services on premises for large employers. Most of you are meaningful employers in your town. You can create a critical mass, if you're too small to be one for such a provider, by banding with other major employers in your main location. These providers offer generic drugs at major discounts to the usual channels, and provide on-site healthcare economically and effectively. They will also tell you, based upon your number of employees, how many hours the clinic should be open and how it should be staffed. Of course, not all providers are excellent, but the idea IS. You can handle objections from remote areas where such services are not practical. Don't let those deter you from enhancing the well-being of your staff in main office.
These clinics do not compete with your local specialty doctor practices. They resemble the health care clinics that are popping up everywhere, and become a major source of referrals for the doctor practices which you bank and love.
- Employee onboarding. Many banks have a structured on-boarding for their new employees. It's a great idea. Some even offer retention bonuses to tellers who stay with the bank for over a specific period of time. Another great idea. But manager on-boarding is a new idea whose time has come. We often promote people who excel in their current position without ensuring that they are capable to manage others. They sure know how to get their job done and may even be able to teach others how to do it, but they do not have a structured on-boarding process for the next level. And yet, manager effectiveness is the most important factor in employee retention. What are we thinking?
Develop a manager onboarding process which starts with your culture. Teach them how to acculturate others by clarifying what really matters in your company. Is it building trust they need to work on? How to listen and provide feedback? Or general leadership skills? Whatever it is, build a curriculum that will be specific to your culture underpinnings and teach your new managers those tenets.
Consider doing such onboarding training in a classroom setting. I know it's expensive, but it also creates a "class" of newbie managers who can bond and support each other across the bank, an asset you can build on for years to come to break down silos and bring the entire bank to bear at the point of customer contact.
Another valuable enhancement to new manager education is getting them involved in strategic projects. One of the most difficult things for managers to do is to wear their corporate citizen's hat instead of their local line of business advocate hat. Working on bank-wide strategic projects early on can teach them the value of system-wide thinking. Further, such projects can help you assess these managers' potential and ability to think strategically, a key element for future growth.
- The EQ bank. Many managers and executives are technically extremely competent but they lack emotional intelligence. George Myers of Zions Bank says, "They draw on their EQ bank too often without making deposits, and eventually end up writing checks they can't cover". Teaching your management ranks how to make deposits into their Emotional Quotient bank is essential for many outstanding managers who fall short on the EQ scale. One can develop a discipline to do so, by attending corporate functions that have little content value, remembering people's names and birthdays etc. But this can only happen for many managers if HR sets the expectation and then offers a discipline to go about building EQ balances.
- Retail bank staffing. Every bank's branch network staffing is undergoing evaluation and transition. None of us can afford to maintain branch staffing as transaction volumes plummet and traffic declines, yet none of us can afford to close branches en masse and let many branch staff go. HR can and should take a leadership position in facing this challenge we all struggle with, working with the retail bank to create a path from today's staffing model to 2-3 years' hence. Nothing should stay off the table, but innovative solutions beyond simple branch closures are the ultimate success here.
For example, many are considering a shift from tellers and bankers to universal bankers. HR and Retail together can and should be more thoughtful on finding the right places and setting clear expectations for universal bankers in your organization. If your bankers and tellers are supremely productive and add much value to your customers, perhaps no change is needed. A wholesale, one-size-fits-all approach will undermine your future success. A customized approach, starting with assessing the competency of the current staff, is in order. Ask yourself: How many of my people can sell complex products to our customers? Who can add value through open-ended conversations? Sell treasury management services? etc. Only after such evaluation will you be able to determine how many folks you have on staff today who have the potential to become universal bankers, and then start mapping your transition where appropriate.
- Laying the foundation to break down silos. We all tout the importance of cross-selling, but we promote technical experts and do not typically reward good corporate citizenship visibly and meaningfully. Some banks have started to work on identifying the path to system-wide teamwork. One such bank asks every person on staff the following three questions (rate agreement 1-5):
- I'm on a team works well together; we are on the same page
- Our team is part of a line of business that is also on the same page and has shared beliefs
- There is cooperation between our team and other lines of business; we all work toward the same goals
The answers to these questions will clearly identify those teams that are cohesive, as well as those who feel isolated from the rest of the enterprise (vs. those who are intense collaborators). You can use this platform as a point of departure to establishing public forums for cross-team performance expectations, recognition and rewards. This, in turn, will start a cultural shift toward shared goals and beliefs, which is your ultimate goal.
- Stay Interview (vs. exit interviews). Banks traditionally engage in exit interviews of employees and customers alike. The results are always the same and rarely disclose the root causes for departure. Further, we close the barn door after the horse is gone in both cases, which makes these interviews academic and often non-actionable.
Zions Bank has established "stay" interviews, which I find so much more effective than current practices. They ask all employees three questions:
- Given the right opportunity, how likely are you to go work for another company in the next two years?
- How likely are you to start looking for a new job in the next six months?
- How likely are you to be paid more by doing the same at a similar institution?
What an amazing best practice! The information generated, at both global and departmental levels, is an excellent leading indicator to pay level problems and other systemic issues the organization is facing. One can fix these issues before staff leaves.
I can keep writing, but this article is long enough. People ARE our only competitive advantage, and vigilant management of human capital is at the foundation of future success for any bank!