Chief Investment Officer
Commercial Loan Automation
BirdsEye Viewcareer pathing in retail banking
One of the largest hidden costs in banking is the cost of turnover in the retail business. Teller turnover in particular is painful, and it is considered an integral part of the business. I believe the costs are far higher than the training and recruitment costs involved. New tellers are simply not as effective as tenured peers, and customer retention suffers. Further, sales performance is typically associated with better product knowledge, which, again, can be related to more tenured employees. The same can be said for bankers, branch managers and others.
The teller position is winding down, but its "tail" is very long. Like cash, it won't be eliminated altogether for some time. The investment in human capital across the retail network is, and will continue to be, significant. Yet few banks spend much time and thought on efforts to reduce turnover among the ranks and improve productivity. Career pathing is sorely needed in retail banking.
Some banks have realized this and have developed various approaches to improve employee retention. They have focused on developing retail career pathways to give the associates clear guidance on what skills they will need in order to progress to the next level in their career development. The process, which "graduates" employees from one level to the next through certification, prepares the staff with the knowledge, skills and abilities they will need to be successful in the position they are pursuing. The process also helps the associates serve their clients better and make a greater impact on the bank's bottom line.
Firstmerit has developed an excellent such process:
At the entry level, associates learn about their position and the bank's product line; they become skilled in account maintenance and learn how to profile customers and handle open-ended conversations.
The next level involves training on account opening and greater emphasis on sales. They learn how to maintain ATMs, check balances and overall become more effective. Promotion entails a raise and additional responsibilities.
Once promotion is earned to the next level, an associate can study to become a lead teller. They learn more about the audit process and vault servicing. They become proficient in more complex products and are able to sell them to customers. Once completed, another raise is in store for the successful employee.
The next pathway prepares the banker to become a branch manager. The associate learns the skill set necessary to be a successful branch manager, and also expands their knowledge to lending products. They can now apply to branch manager position openings, and, when successful, get a meaningful salary bump.
Once a branch manager, an employee can study to become a district manager, and, if successful, can move upward with executive shadowing, special projects and other tactics to become eligible to more senior level positions around the bank.
Sounds simple... And yes, too few banks engage in such a process which outlines clearly what it takes to move from one level to the next, and what are the rewards for doing so. Since cost containment is such an important element of bank thinking these days, spending more time on reducing turnover hidden costs around the bank is a wise investment. The non-monetary paybacks, including employee goodwill, stronger culture and improved productivity, are additional benefits that should not be ignored.